The Martha’s Vineyard Airport Commission last Thursday afternoon decided to stay out of the ride-sharing tussle and authorize Lyft to operate at the terminal in the same manner that taxi companies now operate. The annual fee will be $1,700, which Lyft has agreed to pay.
Lyft, a transportation network company (TNC) similar to Uber, offers rides to patrons based on a phone application request. The company recently approached airport manager Ann Crook to request authorization to operate at the airport. Ms. Crook also received a complaint from a taxicab company that TNCs were not being required to obtain authorization.
Island taxi companies are charged an annual fee of $1,500 to operate and pick up passengers at the airport. “We give them permission to come stand and park and do what they have to do to be ready for passengers as they’re coming off the plane,” airport commission chairman Myron Garfinkle said. “We haven’t really had any formal agreements with a TNC before, because last year was Uber’s first year, and they did what they wanted to do.”
Last summer, the arrival of Uber on the Island was a hot topic, stirring up criticism from taxi company owners and proposed town regulations. Thursday, Mr. Garfinkle said it is not in the airport’s interest to step into the debate, but rather to focus on the financial implications.
“Our taxi fellows on the Island, many of them feel — as taxi drivers around the country do — that TNCs are a threat for various reasons,” he said. “In discussion with management, it’s our position that it’s not up to us to decide the qualifications of licensing or the qualifications of insurance and those things. That’s up to MassDOT, that’s up to the Registry, that’s up to the West Tisbury and Edgartown police departments to make those determinations.”
Commissioner Kristin Zern said airports around the country are authorizing TNCs.
“The reason they’re doing it is because that’s what consumers want … It’s a different thing — you can look on your phone and you know exactly where the car is, and it’s going to be there in five minutes,” she said. “It’s just very consumer-driven, and that’s why it’s so successful, because the consumers really want it.”
On the other hand, some airports are not allowing TNC services at all, Ms. Crook said.
“The challenge in my mind is if we say, ‘We’re not going to allow you’ — how are we going to enforce that?” she said. “Once again I go back to the FAA grant assurances that if there’s a company making money as a result of the airport, then we need to get a portion of that.”
Ms. Crook said it’s possible the ride companies have already been serving the airport at no cost. She proposed charging TNCs, such as Lyft and Uber, an annual fee of $1,700, which the commission approved unanimously.
No more discounts
Also Thursday, based on a recent Federal Aviation Administration (FAA) seminar, the commission agreed to changes in business practices that will result in hikes for airport business park (ABP) tenants.
Mr. Garfinkle said the Oak Bluffs water department currently bills the airport about $160,000 annually, which is primarily to service the airport business park, but the airport only recoups about half of the that from tenants. The commissioners agreed to begin charging based on metered water usage starting this billing cycle, which began on June 1. Mr. Garfinkle said on average it would add about $2,000 to $4,000 to tenant costs annually.
He said it will be an immediate solution to cover costs while the commission looks into the water and wastewater operations and finances more thoroughly, and explores options such as using an old well, creating a new well, or getting water from another town. “When I found out that we weren’t charging the cost of water, not to mention our wastewater facility, not to mention our engineering department, not to mention all the other things that are involved, I thought we should at least start with this,” Mr. Garfinkle said.
Additionally, Mr. Garfinkle proposed a new rate-setting policy for tenant leases. Currently, the airport policy sets lease rates based on the appraised land-use value, but includes a discount. In a phone conversation Friday, Mr. Garfinkle said he believed the discount was implemented several years ago as a way to incentivize tenants to update to a new lease structure.
“In the past, fair market value was discounted to tenants who use our current lease language,” Mr. Garfinkle said.
The issue came up after an FAA seminar a few weeks ago, Mr. Garfinkle said, where representatives stressed utilizing fair market value.
“They frown strongly on discounting fair market value, and that was the main incentive,” he said. In order to get funding from the FAA and the Massachusetts Department of Transportation, the airport must sign grant assurances, which stipulate a number of things that the airport must do in order to obtain and retain the funding.
“The first responsibility is to make sure that we don’t take funds out of the airport, so that it can be strong,” Mr. Garfinkle said.
The FAA will conduct an audit next month, and will look specifically at the airport’s lease structure. Thursday, Mr. Garfinkle proposed discontinuing the discount practice, effective June 1. After very little discussion, the motion was approved by the commission unanimously.
In other business Thursday, finance subcommittee chairman Don Ogilvie presented the final numbers for the fiscal year 2016 (FY16) budget. What was originally forecast to be a $486,000 deficit before capital costs, largely due to personnel turnover and legal fees following a lengthy lawsuit battle, actually resulted in a $447,000 surplus.
“Most spending except for necessities was stopped,” airport financial administrator Joan Shemit said. Other changes, such as upgrading all the parking lot lights to LED, also cut costs. Additionally, revenue surpassed the projected numbers by about $492,000.
The commission approved the proposed FY17 budget, which projects a $346,000 profit prior to capital expenses. “It’s a good trend,” Mr. Garfinkle said.