retail news in context, analysis with attitude

by Kevin Coupe

Fair to say, I think, that even though “disruption” may have become an overused word, it continues to occur, affecting almost every company … and a New York Times story points to how it can hit entities from unexpected angles.

The use of ride-hailing services such as Uber and Lyft clearly has had a major impact on the traditional taxi business. But it also seems to be affecting airport profitability.

According to the story, airports “depend on fees from parking lots, rental car companies and taxis as their biggest source of revenue other than the fees paid by the airlines.” As more and more people use Lyft or Uber, it means that they’re not driving their own cars to the airport, renting cars or taking taxis. And the money airports “currently collect from ride-hailing services do not compensate for the lower revenues from the other sources. (Expectations are that this is temporary … but it is current reality.)

“At the same time, some airports have had to add staff to oversee the operations of the ride-hailing companies, the report said. And with more ride-hailing vehicles on the roads outside terminals, there’s more congestion.”

What the Times story makes clear is that airports are having to change the ways in which they do business in order to make up for lost revenue. In some cases, this has meant developing premium parking lots for fliers that gives them faster, more convenient access to terminals. In others, it has required a heightened focus on food and retail that can generate higher fees. (The Times has another story about how Pittsburgh International - which has long been aggressive in its retail offerings - now offers a pass that allows non-fliers to access terminals so they can eat and shop there.)

The larger, Eye-Opening point, I believe, is that nobody is safe from disruptive influences, and everybody has to be open to the possibility that they have to change the way they do business if they are going to continue to be relevant … resonant … profitable … sustainable … and viable.
KC's View: