Item No. 8a_supp Meeting Date: May 28, 2019 Sea-Tac Airport On-Demand Contract Alternatives Port of Seattle Commission Briefing May 28, 2019 1 Presentation Outline • • • • • • Schedule Guiding Principles and GTAP Policy Evaluation of Alternatives Matrix Outreach and Feedback Recommendation Next Steps Outline 2 Schedule • September 25, 2018: Commission briefing on ground transportation framework and GTAP study (COMPLETED) • October 2, 2018: Aviation Committee briefing regarding on-demand options (COMPLETED) • October 25, 2018: Stakeholder outreach sessions at Sea-Tac Airport (COMPLETED) • December 2018: Commission 2-2-1's regarding on-demand service options (COMPLETED) • February 15 and 28, 2019: 2nd stakeholder outreach sessions at Sea-Tac Airport • February and March 2019: Follow-up Commission 2-2-1's (COMPLETED) • March 26, 2019: Commission authorization for execution of curb management contract after competitive procurement (COMPLETED) • May 28, 2019: Public Commission briefing and motion regarding on-demand service options • September 30, 2019: ESFH contract expires (COMPLETED) Coordinated schedule to move forward with multiple initiatives 3 Ground Transportation Framework Guiding Principles • Reduce environmental impact • Reduce roadway congestion • Support customer choice • Social equity • Generate revenue for sustainable airport Goals • 50% scope 3 reduction • 15 minutes tower to curb • 30% private vehicle pick-up/drop-off • Social Equity • Financial sustainability Strategies and Tactics SAMP e.g. roadway relocation, Widen Arrivals Approach GTAP e.g. first/last mile, access fees, express bus Operational e.g. rematch, TNCs on Arrivals, garage utilization Contracts Taxi, TNC, other GT e.g. e-KPIs, driver income, guaranteed min. wait time Port policies provide guidance in all categories 4 4 Policy Evaluation Matrix Customer Experience/Choice Environmental Effects Living Wage Jobs/Equity Revenue Generation Alternative 1 Open System Alternative 2a Capped - Exclusive Metered or Flat Rate Key: = Positive Impact = Neutral / Unknown = Negative Impact Alternative 2b Capped- Exclusive Metered and Flat Rate Alternative 3 Capped- Hybrid Overall performance, but further refinement of options is needed 5 Further Refinement: Stakeholder Outreach Sessions • Outreach conducted in support of earlier GT work in 2015 and 2017 • Three facilitated presentations held October 25, 2018 • Three additional facilitated sessions on February 15 (two) and February 28, 2019 • Representation included multiple owner-operators, drivers, TNCs, dispatch companies, Teamsters representatives Stakeholder feedback from October 25, February 15 and 28 6 Further Refinement: Outreach Feedback Job Security: • Port issues permits directly to current owners/operators • Lottery system for any openings that occur Living Wages: • Limit per-trip fees to cost recovery, including curb management • Weekly fees paid directly to the Port • Manage fleet size every 2 years or less based on customer demand Feedback summary 7 Further Refinement: Outreach Feedback - continued Driver Voice: • Port establishes Labor Harmony Agreement • Worker-led non-profit organization of drivers: o Establishes process for adjudication of disputes o Process for input in day-to-day operations o Facilitates driver training and education Environmental input: • Port incentivizes electric vehicles through 1) low cost loans, 2) lower fees, 3) permit extensions for electric vehicle owners Feedback summary 8 Recommendation - Initiate Two-year Pilot Program 10/1/19 • Retain current fleet of 405 vehicles • Port directly issues non-transferable permits to every vehicle/owner combination • Two-year pilot term (through 9/30/2021) • Allow owners to associate with any dispatch company and any driver • Set a per-trip fee of $6/pick-up based on Port's costs • Port contracts separately with curb management company • Quarterly engagement with owners and drivers Contract recommendation 9 Next Steps May - June 2019: • Finalize operation details, technology and owner permit for new services • Initiate agreement renewal discussions with TNCs • Initiate procurement for curbside management services, with costs paid by Port July - September 2019: • Curb management provider selection and negotiation • Transition period for new on-demand service • Negotiate TNC agreement provisions September 30, 2019: Current agreement with ESFH expires October 1, 2019: New on-demand service commences December 2019: New TNC agreement in place Steps to transition in late 2019 10 Alternative 1 - Open System • Key Features - Airport issues access permits to all licensed providers - Similar to Boston, San Francisco, Houston, Portland, Minneapolis and others • Pros - Access is provided without a pre-determined supply restriction • Cons - - - - - Results in inconsistent customer service Increased congestion Increased greenhouse gas emissions Potentially lower average driver take-home income Difficult to enforce Open taxi system allows for more access, but at the cost of other policy priorities 11 Alternative 2a - Capped/Metered or Flat Rate Contract • Key Features - Port's former contracts with STITA and Yellow followed this model (with metered operator) - Single type of provider (meter) and 1-3 different companies (Port has had one provider) - Airports with this system include Denver, Dulles, Phoenix and others • Pros - - - - Improved customer service and Port's ability to impose requirements Potentially higher driver income for owners/operators in fleet Ability to adjust fleet to customer demand Competitive and transparent process • Cons - No on-demand access for other operators - Competitive process and capped system creates winners and losers Allows for more Port control, but limits access to one type and one (or more) company 12 Alternative 2b - Capped/Metered and Flat Rate Contract • Key Features - Two types of providers (metered and flat rate) and typically 1-3 different companies - Similar to closed systems in Denver, Dulles, and Phoenix • Pros - - - - Airport maintains ability to impose requirements and standards Potentially higher driver income for owners/operators in fleet Ability to adjust fleet to customer demand Competitive and transparent selection process • Cons - Potential increase in customer confusion with two separate types of providers - Competitive process and capped system creates winners and losers Allows for more Port control, has both types of providers 13 Alternative 3 - Capped Hybrid Contract • Key Features - Similar to capped contract with managed fleet size, but owners are allowed to affiliate with any taxi association - Airport hires independent 3rd party to manage fleet and curb operations - Unique model - no other known airports utilize this model • Pros - Owners can choose their preferred taxi association - Potentially higher driver income for owners/operators in fleet - Ability to adjust fleet to customer demand • Cons - 3rd party management expense may affect Port income - Airport's ability to enforce requirements is reduced due to multiple taxi associations participating in fleet Owners are allowed to freely associate, but Airport loses some control 14