Los Angeles officials voted Thursday to allow ride services such as Uber and Lyft to pick up passengers at LAX, the largest U.S. city to grant full airport access to the rapidly growing app-based companies.
The move could significantly alter the way thousands of Southern Californians and tourists navigate the nation's third-busiest airport, long criticized for traffic congestion and lack of a direct connection to the region's rail system. If the companies can quickly comply with the airport's rules, Lyft and Uber services — some offering lower fares than taxis — could be available by September, officials said.
The victory is particularly important for Uber, the largest of the tech-based transportation companies, as it continues to wage legal and regulatory battles in California and around the world. Earlier this week, a California administrative law judge recommended that the state fine the company $7.3 million and suspend its operations for failing to provide required data showing that it provides equal access to all customers.
The vote by city airport commissioners was a major blow for Southern California shuttle and limousine drivers and Los Angeles' 2,361 licensed cabdrivers. They have fought to exclude Uber and similar services from LAX, one of the last and most lucrative strongholds of a legacy industry that has seen a significant share of its business siphoned off by Silicon Valley competitors.
Business leaders and Uber and Lyft said Thursday's action is a win for travelers. Airport officials noted that about 8% of passengers arrive by taxi, while about 6% arrive by Uber-type services.
“Customers want them,” Ruben Gonzalez, a senior vice president at the Los Angeles Area Chamber of Commerce, told the commission before he was interrupted by a ripple of boos from taxi drivers in the audience. “These are all realities,” he continued.
But William Rouse, the general manager of Yellow Cab of Los Angeles and the president of the Taxicab, Limousine & Paratransit Assn., said the commission's action missed “a major opportunity to protect the public and level the playing field.” The airport's limited entrance points give city regulators a unique opportunity to enforce strict background checks and insurance policies, which he said the commission failed to address.
More than a dozen airports in the U.S. and three in California allow low-cost services such as UberX to make pickups, including San Francisco International Airport and Orange County's John Wayne.
Currently, ride share services can drop off a passenger at LAX but only licensed livery drivers, shuttles and cabdrivers can pick up someone. Travelers can use their mobile apps to request a luxury Uber or Lyft car service, operated by a licensed livery driver, but the companies' low-cost services have been banned.
Standing under signs for long-distance shuttles and vans at LAX on Thursday, Renee Daboo of Nashville said taking UberX from her hometown airport is now normal. Last year, Nashville International Airport
became the first major U.S. airport to allow those pickups.
The service is “cheaper than a taxi, and usually quite a bit nicer,” she said.
The typical taxi trip from LAX to downtown Los Angeles is more than $50, not including tip. In periods of low demand, Uber or Lyft rides are closer to $30, but that can rise sharply during peak periods.
Some argue that dynamic pricing has put cabdrivers at a disadvantage because taxi fares are set by city officials and do not fluctuate. A dozen taxi drivers rallied outside the commission's meeting at LAX on Thursday, wearing yellow shirts with a picture of a man's menacing eyes reflected in a rearview mirror, and the words, “Uber Driver or Convicted felon? BOTH.”
“The playing field has been unfair from the beginning,” said Greg Inks, 63, who said he's been a Checker Cab driver for 23 years. “We have our fingerprints at City Hall. We have to pass a test. It's hard to get a license.”
Inside, dozens of taxi, shuttle and limo drivers warned the commission that UberX and Lyft would eat away at already diminished revenue. Others said the city would increase safety risks by allowing drivers not vetted by the city to carry passengers.
Los Angeles Councilman Paul Koretz, who has received at least $5,700 in campaign contributions from taxi companies, said the airport should take heed of this week's state ruling to fine and suspend Uber for not following state laws. Instead, he said, L.A. is about to “invite them to LAX.”
One commissioner who had criticized increased airport access for ride-share companies was Jackie Goldberg, who did not attend Thursday's meeting. She wanted stricter background screening requirements and more comprehensive insurance policies.
Uber and Lyft representatives welcomed the commission's action, but noted that some details of the licensing agreements with the city need to be worked out. A Lyft representative said the company would prefer drivers only be barred from LAX if their license has been suspended in the last three years, not the last seven.
The regulations would require Uber and Lyft to link their mobile apps with a digital “geofence” that would alert the airport when a driver entered the terminal area, dropped someone off, picked someone up and left again. The proposed system, similar to one in place at San Francisco International Airport, would also record some basic data on drivers.
The companies will have to prove that their apps provide the information the airport is requiring, such license plate numbers, Chief Operating Officer Stephen Martin said.
“We have total control,” Martin said, telling commissioners that the city could suspend companies not meeting reporting requirements. “It may be the nuclear option is what we have to go to, because fines may not work.”
The permits would require Uber and Lyft to pay $4 for each drop-off and $4 for each pickup. In both cases, the fee, collected by the airport agency and added to its general operating revenue, would probably be passed on to the passenger. The ride-hailing companies would be required to pay the airport at least $25,000 per month for the right to pick up at LAX.
Unlike taxis, Uber and Lyft drivers would drop off and pick up passengers only on the upper departure level, a requirement that the companies opposed. They would be required to wait in a holding area until receiving a request for a ride. No more than 40 ride-hail drivers would be allowed in the holding area at one time.
Lyft driver Brandon Bailey, 25, said he will start working nearby more frequently. “If you pick someone up from the airport, it's a longer trip and you make more money,” said the West Hollywood resident. “This is good news.”