May 12, 2006
Still no go on airport shuttles

City Council has put off the vote on airport shuttles after complaints from cab companies.

The five-year contract has come under fire because it would go to only one vendor, a SuperShuttle franchise in partnership with Yellow Cab. That would create an unfair monopoly that would put taxi drivers out of business, some cab company representatives say.

"In America, everything's based on competition. And when something is monopolized, the service becomes very poor," said Joni Jones, a service representative with Liberty Cab who was one of a dozen people who expressed the grievances of cabdrivers at the City Council's public session this week.

Mayor Bill White said he sympathizes with taxi drivers and would prefer to contract with more than one company, but he's not sure the market would support that.

"It's a service we were convinced was risky enough so that we needed to start with one vendor," White said.

Let's clear one thing up right away: Having only one vendor doing the shuttles is not a monopoly because the market isn't "airport shuttles". The market is "airport transportation", and that includes shuttles, taxis, limousines, city buses, driving yourself, getting a ride, and maybe someday a rail line. I discussed some of the factors that might lead someone to choose one option over another. How many shuttle companies there are isn't really a factor - price, convenience, and time are. The lack of choice for shuttles specifically will only really matter if the shuttle company does an exceptionally good or exceptionally poor job.

I do have sympathy for the argument that the process for deciding which company gets the exclusive contract was not fair. I'm happy to review that and to give City Council enough time to go over the details, ask questions, and make changes as necessary. Maybe we shouldn't allow an exclusive contract, and maybe the market really can't support more than one. I don't know, but I don't object to more study on the issue. Let's just keep this moving, because in the end, having a shuttle option will make the airport transportation market a broader and more competitive one. As Joni Jones points out, that's the American way.

Posted by Charles Kuffner on May 12, 2006 to Planes, Trains, and Automobiles | TrackBack

This is odd reporting, since the complaints came from the cab companies AND from Texans Shuttle, which has successfully operated airport shuttles in Houston for years. Yet the reporter mostly frames the monopoly criticism as coming from cab companies (the reporting may be confused though -- it may be that cab companies other than Yellow Cab were complaining that Yellow Cab's getting an exclusive shuttle contract gives them an unfair leg up on all the other competition).

As I pointed out on blogHOUSTON last night, the Mayor's position that allowing more than one shuttle service to expand to door-to-door is too "risky" is not convincing, since Texans Shuttle is already an airport shuttle operator, and would love to expand their operation door to door. It's not much of a business risk to them to do so.

Posted by: Kevin Whited on May 12, 2006 9:11 AM

Agreed on the point that having only one vendor does not a monopoly make, but my question is why have limit it to one vendor in the first place? Accept all comers to the shuttle business, and let the ones that have the best service and prices survive.

Posted by: Joe White on May 12, 2006 10:04 AM