Uber and Lyft Prepare to Enter DFW Airport, Yellow Cab's Last Stronghold

Uber and Lyft have been legally operating in Dallas for almost three months now. Uber was already dominating cabs in the competition for business trips, a trend that has only continued since the City Council's new transportation-for-hire ordinance went into effect on April 30. Data on personal trips are harder to come by, but anecdotal evidence suggests a similar trend. In other words, the local taxi industry has been disrupted, with one major exception: Dallas-Fort Worth International Airport, where cabs and other old-line transportation companies (e.g. limos and shuttles) still enjoy the same competition-squelching protections they have always had. While illicit workarounds exist — Uber users have been known to change their location on the app from DFW airport proper, where it won't let them hail a ride, to one of the offsite park-and-ride lots, where it will, then telling the driver to meet them at the terminal — the rules have made things difficult.

That's set to change on August 1 when DFW rolls out new regulations that will allow ride-sharing apps to compete for airport passengers. The new vehicle-for-hire companies have been salivating at the prospect since they first moved into Dallas. "DFW is a very important piece of the Dallas market for us, and, on the whole, we're really, really looking forward to moving forward" with the new rules, says Chelsea Wilson, a Lyft spokeswoman.

There's ample reason for them to be excited. DFW is like the region's taxi Eden, a place with 63 million annual airline passengers, many of whom need rides. Because the airport was built in the no-man's-land between Dallas and Fort Worth and is thus far from whatever place those travelers need a ride to, the fares are guaranteed to be handsome. Data on taxi arrivals and departures aren't available on DFW's website, but the airport's total take is. In 2013, it collected more than $8 million in fees from taxi companies, which suggests that the taxi companies themselves are making at least in the tens of millions. (Update: Airport spokesman David Magana says about 876,000 cab rides originate from DFW each year; DFW does not track the number of cab rides to the airport.)

Until the spring, the airport had been taking a wait-and-see approach to vehicle-for-hire regulation. The city of Dallas, which co-owns the airport with Fort Worth, was in the midst of a remarkably messy and protracted process of crafting regulations that put legacy players like Yellow Cab and upstarts like Uber and Lyft on a relatively even playing field. DFW officials, probably wisely, let that process play out.

In early May, the DFW Airport Board approved a framework for new transportation-for-hire rules that would, in broad terms, allow any automobile licensed to operate as a vehicle-for-hire in either Dallas or Fort Worth to operate at the airport, so long as the company obtained a separate operating authority from the airport. DFW would no longer issue driver permits, leaving that job to the cities. It would also abolish its cap on the number of taxi companies that could operate at the airport.

Since then, airport staff have turned to crafting specific regulations, most of which are relatively banal. The Central Queue, where taxis line up to be dispatched as passengers at the terminal request them, will remain but will be supplemented by a "Hold Lot" where Uber, Lyft and other "pre-arranged taxicab services" will wait to be hailed. If regulators find them driving in other parts of the airport, they will have to prove documentation showing the details of the trip. The taxis and ride-share vehicles will also be segregated at the terminal, with taxis picking up in the yellow section of curb and Uber and Lyft picking up in the green. The $600 fee to obtain operating authority would remain.

Less benign, at least from Lyft's perspective, is the surprise requirement that each driver will have to pay $20 for a DFW Airport decal to place on their windshield. The problem, says Wilson, is threefold. First, most Lyft drivers are part-time, with 80 percent driving 20 or fewer hours per week. The other 148 hours per week their car reverts to being a personal vehicle. Requiring them to place a permanent decal on their windshield is a step toward professionalization that is at odds with how Lyft operates. In addition, one of the explicit objectives of the framework approved by the DFW board and later ratified by the Dallas and Fort Worth city councils was to "Eliminate redundant permitting fees and administration." Both Dallas and Fort Worth already require windshield decals; requiring an additional decal for DFW would seem to be the definition of redundant. "Anything that's duplicative is really not in line with what the [Dallas City] Council was hoping to achieve," Wilson says. Thirdly, it was sprung on operators within the past month or so, just a few weeks before the rules was to go into effect.

Dallas City Council member Scott Griggs is also bothered by the decal requirement. Vehicle-for-hire operators were supposed to have only one hoop to jump through. But requiring the decal DFW has set up a second hoop. "The goal was to avoid all this," Griggs says.

Airport spokesman David Magaña said the decal was part of early discussions with Uber, Lyft, and other parties. "The rules and the windshield decal was covered extensively with the companies in mid-April, so it should not have been a surprise...The reason for the decal is so that DFW personnel have an easy visual cue that the vehicle is authorized to operate and pick-up customers at the Airport. It also provides a level playing field for all ground transportation service providers. Whether the driver works 4 hours or 40 hours a week, it is DFW’s intent to provide the customer with assurance that the vehicle they ride in has been approved for use at the Airport."

Griggs also forwarded his email correspondence with DFW CEO Sean Donohue, who explained that the airport decided to retain the $600 operating authority fee to recoup costs for managing transportation-for-hire at the airport, "similar to how we charge airlines to recover the cost of airfield operations." He also took issue with Griggs' characterization of the decal as a permit that was not in line with the guidelines agreed to by the city of Dallas.

"This is not a permit, but our visual cue that a transportation for hire vehicle has been entered into our system and is familiar with the operating complexities of DFW," Donohue continues. "Illegal vehicle for hire solicitation is one of the major challenges that all large airports need to manage and the DFW decal provides our DPS and Operations team the ability to ensure a level playing field for legitimate vehicle for hire operators. The continuation of this $20 annual fee covers our enforcement costs for the program."

In a followup email Donohue explains that not requiring the decal would encourage drivers to ignore the $4-per-trip access fee and instead pay the cheaper short-term parking rate charged to pass-through traffic.

Wilson says Lyft hopes to convince the airport to do away with the decal. At the very least she hopes to reach a compromise similar to what they've reached with airports in San Francisco or Nashville in which Lyft drivers display some non-permanent placard, or perhaps the company's signature glow-in-the-dark pink mustache, to demonstrate their right to operate. Regardless of whether that happens, however, she expects the company will be prepared to begin operating when the rules — and the taxi game — at DFW change on August 1.Send your story tips to the author, Eric Nicholson.