Traveling to or from Los Angeles International Airport using a ride-hailing or limousine service could be getting more expensive as city leaders Tuesday approved a hike in fees such companies pay for airport access.
In a unanimous vote, the Los Angeles Board of Police Commissioners agreed to increase the $4 fee to $6 for all companies providing passenger pick-ups and drop-offs at the airport, either within the terminal area or at the LAX-It lot.
That fee is expected to jump to $12 for pickups or drop-offs within the central terminal area.
According to Los Angeles World Airports (LAWA) staff, the fee structure is designed to encourage people to use the SkyLink system when it opens later this year or next year, and thus ease traffic within the central terminal area. The board on Tuesday also unanimously approved a separate proposal to require taxi and ride-hailing services to limit the percentage of passengers they pick up and drop off within the central terminal area.
Currently, ride-hailing companies such as Uber and Lyft pay a roughly $4 fee to pick up or drop off passengers at LAX. Taxi companies pay $4 to pick up passengers, while limousines and similar services pay $5. Taxis and limos do not pay any fees for passenger drop-offs.
Such fees are traditionally passed on to passengers.
“Airports are among the most complex transportation hubs in the world, and nowhere is that complexity more visible than in LAX’s own central terminal area,” David Reich, LAWA deputy executive director of mobility planning and strategy, said.
“Everyday, 80,000 to 100,000 private vehicles, ride share trips, taxis, shuttles and buses compete for limited curb space designed decades ago for a very different travel environment,” Reich added. “Concentrating all of this activity in a single, two-level terminal loop is no longer sustainable, and it hasn’t been for a long time.”
Reich reiterated the fees Los Angeles World Airports charges to FHVs (for-hire vehicles) have not changed in 10 years and no longer reflect the value of the airport market, especially given the multibillion-dollar investments in LAX landside access, terminals, and other facilities and amenities.
The increase in fees will also align LAX’s prices with other airports such as San Francisco International Airport, Boston Logan International Airport, Seattle-Tacoma International Airport, Chicago O’Hare International Airport, and others.
In addition, the current fee structure needs to be adjusted in order to ensure that some providers not currently paying any drop-off fees begin to do so, according to Reich.
“The proposed base access fee establishes a clear, uniform framework under which all low-occupancy FHVs contribute proportionately to the value of operating at one of the world’s most significant aviation gateways,” according to the staff report. “This approach aligns with longstanding airport industry practice and ensures that the financial responsibility for maintaining and enhancing airport access is shared fairly among the private businesses that rely on it.”
The proposed fee hikes not surprisingly are being opposed by the transportation companies.
“A 140% fee hike with no transparency or public process is indefensible,” Danielle Lam, Uber’s head of local California policy, told the Southern California News Group in a statement.
Lam said hiking the fee to as high as $12 “would punish travelers, working families, and seniors who depend on affordable, reliable transportation. Uber supports improving LAX, but not on the backs of the people who keep it running.”
Reich emphasized that ride share companies independently determine their fares.
“I said that before LAX charges the company for commercial access, ride share fares vary widely depending on time of day, destination, surge pricing and other factors,” Reich said. “These companies can choose to absorb the airport fee themselves or include it in the price customers pay. That’s their choice.”
Reich noted that of several companies LAX spoke with, Uber was the most critical of the fee increase.
“The proportion of each fare that ride shares companies keep, known as the take rate, has grown significantly over time. According to its own financials, Uber’s reported revenue as percentage of gross booking and its mobility segment is now 30% up…” Reich said. “It would be unconscionable for the driver or the rider to pay any of the $2 fee difference that we’re proposing, give and take rates like these.”
Margarita Penalosa, who has been a driver for Uber and Lyft for more than eight years, and a member of California Gig Workers Union, called on the board to protect the pay of drivers like herself.
“I drive full time for Uber and Lyft, and over the years, I have to drive more and more hours to make sure to make the same amount of money I was making when I first started driving for the companies,” Penalosa said. “Please, find a way to make sure drivers like myself can continue providing rides to and from LAX without taking a hit on our pockets.”