Uber to drop Ontario airport over fee hikes
Service will halt on Sept. 13; Lyft will keep going there
Uber said it’s stopping its service at Ontario International Airport next month because of fee increases.
The airport east of Los Angeles now charges ride-hailing companies such as Uber and Lyft $4 for a drop-off or pickup, up from $3. The new fees went into effect July 1.
San Francisco-based Uber has called the charges unfair, saying taxicabs and limousines are assessed a single $3 fee that covers both a drop-off and a pickup. It plans to halt service to the airport starting Sept. 13.
Atif Elkadi, the Ontario airport’s deputy chief executive, said that limousines are charged $3 each for a drop-off or a pickup, and that taxis — which do face only a $3 fee for a pickup and no fee for a drop-off — pay for a medallion with the city of Ontario and bear other expenses Uber and Lyft do not have.
The fee increase came after a nearly two-year evaluation of all of the airport’s transportation partners, in which the airport compared its ride-hailing and parking prices with those at other airports in South
ern California, Elkadi said. For example, Los Angeles International Airport charges ride-hailing companies $4 per drop-off or pickup.
In an Aug. 8 letter addressed to Elkadi, an Uber executive said that the company had “no other option but to terminate at this time” and that the Ontario airport’s new fee for ridehailing companies was the highest in the U.S. for an airport of its size.
Elkadi said in an interview that the airport’s size was irrelevant and that Ontario airport officials didn’t believe a fee increase was “completely out of bounds.”
“It happens at airports across the entire country,” he said. “This is not some random thing that happened. For us, it’s just a matter of looking at our business and how we are continuously going to improve our airport ... and what investments are going to be made.”
Uber and Lyft began serving the Ontario airport in July 2017. That fiscal year, which ended in June 2018, the ride-hailing companies paid the airport a combined $807,000 in fees. (The same year, they paid LAX $44.3 million in fees.) In the year that ended this June, they paid the Ontario airport about $1.3 million in fees, Elkadi said.
Uber said in its letter to Elkadi that it wanted to have a “meaningful dialogue” with airport officials and come to a “mutually beneficial agreement.”
Ontario airport officials reached out to Uber on Friday to request a meeting but had not gotten a response as of Monday morning, Elkadi said. In the meantime, operations at the airport will “continue as planned” without the ride-hailing giant, he said. Lyft, Uber’s main competitor, will continue to offer rides there, he said.
Lyft may try to capitalize on the situation by seizing some of Uber’s abandoned market share there, said Brad Erickson, a senior research analyst at Needham & Co.
But in Uber’s case, “if they find the economics of this new arrangement to be onerous, there was probably a reason behind it,” he said.
The Ontario airport would probably suffer more from Uber’s absence than Uber would — but Erickson said he didn’t see the rift between the ride-hailing giant and the airport as “a permanent type of situation.”