NFTA expects $2M loss from ride-hailing at airport

Jul 7, 2017

The arrival of ride-hailing is apparently upsetting the airport finances of the Niagara Frontier Transportation Authority and potentially upsetting finances of the overall authority.

Upset Erie County legislators asked the authority to explain its planned fees for ride-hailing drivers using its airports, especially Buffalo Niagara International Airport, since the authority receives significant revenue from its cut of sales tax and from a mortgage recording tax.

Legislature Majority Leader Joseph Lorigo said he resents the authority doing things without checking with the county.

"What I don't like is the way that these state authorities act without any accountability or oversight," he said. "I don't like that I first heard about the fee a week before ride-sharing was about to start. Giving a level playing field for all services accessing the airport is something that's worth discussing."

The fee the majority leader talked about was the NFTA's initial $3 fee for each ride-hailing passenger picked up at the airport and a $5,000 start-up fee for each ride-hailing company.

After some negative pushback, the NFTA re-negotiated deals with Uber and Lyft. Lyft agreed to the $3-per-ride fee, while Uber agreed to a $180,000 first-year fee, according to Airport Director William Vanacek.

"We're still expecting us to be put in a negative position," he said. "So the $180,000 is for a one-year period. It's based on an estimate of rides that Uber provided to us, which they say they think they are going to do about 60,000 trips a year, which is $3. And now we have something to measure that against. They can do more this year. If they can, they win. If they don't, then we get a little more net profit on that. But, again, our number is fixed at $180,000."

Based upon what has happened at other airports, authority officials say ride-hailing could cost airport finances a loss of up to $2 million. Speaking before legislators Thursday, NFTA Executive Director Kimberley Minkel said Uber and Lyft are not a perfect substitute for the current extensive taxi service, at least over the first holiday of the service.
          
"It's too early for us to have any data," she said. "One thing we did hear from someone who came back late, I think it was on the Fourth of July. Their plane arrived at 1:30. They found it difficult. They couldn't find Uber or Lyft. They were nowhere to be found. So that's why keeping the taxicab service for those late night arrivals is important."

Minkel told legislators the authority expects ride-hailing to hit into its revenues from parking, taxi service and car rentals, as well as costing several hundred-thousand dollars to monitor the ride-hailing services. Out-of-town airports reported major hits in revenues from the ride-hailing cars going to and from airports.