At Minneapolis-St. Paul International Airport, there are 23,600 public parking spaces, most serving the main Terminal 1 (nee Lindbergh) and often crammed to capacity there. Air travelers pay $16 to $40 a day to leave their cars, generating $73 million a year in net revenue for the Metropolitan Airports Commission (MAC). Meanwhile, 11 rent-a-car agencies at or near the airport send out thousands of their autos with arriving air passengers.
Alternatives exist to this wasteful, resource-intensive system, but they all involve leaving the family car at home when heading to the airport: taxis, limousines, vans, shuttles, light rail and bus transit, even Jefferson Lines buses. For some drivers, that’s a non-starter.
But what if the cars now stacked up in MSP parking ramps by departing passengers could be rented to airport arrivals? Travelers in both directions would save significant money, and the MAC could slowly shed its mantle as one of Minnesota’s largest parking providers.
This kind of peer-to-peer rental system has been launched at a few airports around the country, but not in Minnesota. The pioneers of this innovation have run into stern opposition from entrenched forces, sometimes abetted by government.
A California startup, FlightCar, offers free parking, shuttles to San Francisco International Airport, a car wash and a share of rental proceeds. The city has filed suit to regulate its pickups and dropoffs and collect $20 per rental transaction plus 10 percent of profits, which established rental agencies cough up. FlightCar recently expanded to Boston’s Logan International Airport, where officials have voiced concerns about its “safety, security and customer service.” Another upstart, RelayRides, had to suspend operations in New York over insurance issues raised by the state.
Left unfettered, airport car-sharing could, in the words of one of FlightCar’s teenage founders, “revolutionize the airport parking and rental car industries one car at a time.”
According to the Christian Science Monitor, FlightCar accepts any car less than 14 years old and worth less than $60,000 and pays the owner up to $10 a day when it’s rented. On the other side of the transaction, car renters save up to 50 percent compared with traditional rental agencies and get free insurance, GPS and curbside pickup and dropoff services.
‘No queues, no counters …’
Transactions are done online. “No queues, no counters and no salespeople loading you up with useless insurance!” wrote Boston Globe columnist Tom Keane in an opinion piece headlined “How industry enlists government to thwart change” in the Star Tribune.
“There are three companies — Enterprise Global, Avis Budget Group and Hertz — that control the vast majority of this market, and they’ve been doing it the same way for decades,” FlightCar CEO Rujul Zaparde told the Monitor. “We have a new, more efficient model that’s disrupting this industry … so we only expect to face opposition.”
Governments’ claims of protecting consumers from car-sharing should “be greeted with skepticism,” Keane said. “More likely, it’s just about the money … Rather than fighting car-sharing, states and localities should be getting out of the way, letting free markets do their stuff.”
Airports’ budget pressures
Saying “it’s just about the money” minimizes the budget pressures on airports. For better or worse, they invested hundreds of millions in on-site parking and rental car infrastructure when alternatives like FlightCar weren’t even dreamed of. Now add in all of the other structural costs associated with operating a major airport. It’s an airport’s right to protect that investment and help spread operational costs among all of the businesses that count on passengers, but not to the point of unfairly squelching cost-saving innovation.
Here in Minnesota, the MAC seems to respect that balance. It would regulate a car-sharing enterprise only in regards to its airport shuttle operations, said spokesman Patrick Hogan. A FlightCar here would have to pay $5.10 for each dropoff or pickup, he said. “But there’s nothing around here like that yet,” he added.
The closest thing might be Uber Minneapolis-St. Paul, an online taxi dispatch service new in the Twin Cities. It offers airport rides from owner-operators for up to seven people at rates ranging from $45 to $75 per trip, tipping discouraged. Other trips have minimum fares of $12 to $20.
It might work here
But there’s a chance something like FlightCar could work here. Revenue estimates for the U.S. car-sharing industry range as high as $10 billion a year by 2016, and FlightCar has raised millions in venture capital since its launch in February.
The light-fingered approach to car-sharing fees that the MAC has signaled, charging only for operations on airport property, could speed the day when MSP travelers can benefit from an exciting new business model.
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