Why the Airport is the Future Hub of Robot Cars
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Autonomous vehicles will eventually make the existing business model of airport parking garages obsolete, something that any taxpayer disinclined toward $100 million annual budget shortfalls should care a great deal about. Ride-hailing services like Uber and Lyft have already put a dent in this critically important source of non-aviation revenue, with many airports reporting soaring passenger numbers and yet flat or declining parking income. This will only get worse when autonomous vehicles eliminate any remaining inclinations to park. But without parking revenue, airports could become a drain on public coffers. And the challenges autonomous vehicles pose to airports isn’t limited to just parking; air traffic itself will also likely be impacted when travelers on short-haul overland routes opt to skip air travel’s pat downs and gate mobs for the freedom and convenience of a robot-driven car, trading speed for a truly point-to-point experience.
Given this existential threat, it’s tempting for airport operators to re-imagine parking garages as all sorts of things, from concert halls and shopping malls to condominiums, marijuana farms, and more. However, there’s a major wrinkle to such ideas: autonomous vehicles won’t show up all at once in some sort of dramatic Day One moment. They’ll arrive gradually, eating away at revenues year-over-year, but imprisoning airport operators with a conundrum: how can you provide some parking if you’ve re-purposed all of your parking? So, any solution will need to be scalable over time.
But this scaled transition problem is actually good news, because it points us back toward the solution staring us in the face. First, let’s remember that these structures are made for vehicles. More specifically, they are made for dynamically storing and moving vehicles every hour and day of the year. So, here it is: instead of autonomous vehicles putting airport parking garages out of business, airport parking garages need to get into the business of autonomous vehicles.
Imagine this future for Seattle-Tacoma International Airport, the 9th busiest airport in the United States: by 2030, the airport’s 13,000-car parking garage is home base for the airport’s fleet of all-electric autonomous vehicles. The vast majority of both enplaned and deplaned passengers—all 60+ million of them—are transported to- and from the airport by these fleet vehicles, providing extraordinary value to passengers, airlines, the airport, and the city itself. Here’s how:
Inexpensive Transfers that Eliminate TSA Lines.
For passengers, the benefit is inexpensive (projected to be a highly affordable $0.35 per mile), hassle-free, point-to-point ground transfers. For disembarking passengers, the autonomous airport vehicle even serves as a secure, mobile TSA station, checking documents and screening passengers on the way to the airport—eliminating the time spent parking and in TSA lines. (This will also liberate valuable real estate inside the terminal currently occupied by screening areas.) For arriving passengers, their checked luggage will be loaded onboard while they make their way from the aircraft through the terminal; this will be possible because the autonomous airport vehicle will be a node on the network and knowing which passengers will be using the vehicle means luggage can be connected with that vehicle directly rather than having the passenger idle at an archaic, space-hogging baggage carousel.
A Share of Transportation Beyond Aircraft.
For airlines, the autonomous airport vehicle will provide a new source of revenue; even just getting $0.02 of that $0.35 per mile as the lead generator will add up to a nice new business for airlines. Also, as part of this arrangement, the airport could operate vehicles that are branded with the airline’s livery, creating a door-to-door travel experience for passengers. Also, by tapping into the airport autonomous vehicle as a node on the network, airlines will have total visibility into where passengers are beyond just the gate, which could even allow them to experiment with different ways of boarding, which is a totally broken process at the moment, and ripe for new thinking.
Readymade Hubs for Robot Cars—and More.
For the airport, operating a fleet of autonomous vehicles will easily replicate, and likely exceed, current parking revenues. With as many as 13,000 autonomous vehicles, Seattle-Tacoma International Airport’s fleet would need to generate around just $6,500 annually per vehicle to replicate current revenues. To put that in perspective, reaching the $6,500 annually threshold at $0.24 per mile would only require each vehicle to complete fewer than three roundtrips between the airport and downtown Seattle each day. That’s not a lot and doesn’t even account for the likelihood of trips going much farther afield. Of course, there’s the capital required to build a fleet that large, and other associated costs, including charging, maintenance, etc. But the math for profitability appears very straightforward. It’s also worth considering that Seattle-Tacoma International Airport’s garage, an 8-story facility comprised of 5 million square feet, has a roof, and that roof could be converted into a “fourth runway” once vertical take-off and landing (VTOL) aircraft—or even Zeppelins—enter service.
Intermodal Infrastructure that Brings Airports and Cities Closer Together.
For the city itself, there’s an enormous benefit in integrating intermodally with the airport. In the potential futures presented by autonomous vehicles, there’s the capacity for the airport to become essentially estranged from the city, a faraway piece of infrastructure relegated to long-haul travel, which wouldn’t be a future at all for many regional, non-coastal airports. Having the airport serve as one of the city’s core intermodal hubs draws the airport and city closer together functionally and emotionally. Plus, as cities get bigger and bigger, and cities respond to soaring populations and even the effects of climate change by declaring more and more of their downtowns as car-free zones, the airport is a logical home base for large fleets of autonomous vehicles serving greater metropolitan areas. Airport parking garages are ready-made infrastructure, with spaces made for cars—and lots of them.
For airport operators unconvinced about the merits of getting into the autonomous car business, there is another way: decreasing labor costs to offset decreasing parking income. In the case of Seattle-Tacoma International Airport, a 29% reduction of current wages and salaries balances out a total loss of parking revenue. This shouldn’t sound that provocative; in the future, decreasing labor costs should be expected as more and more airport operations—from check-in and baggage handling to security screening and gate management—are handled, at least in some capacity, by robots. So, for an airport, autonomous cars can be seen as just one part of a larger trend of autonomous everything.
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An interesting idea. I suppose it raises the question on what happens to the car rental companies. Does autonomous vehicles at the airport simply replace them? Or would there be certain types of trips that the autonomous vehicle fleet covers while there are other trips covered by car rental companies? Another question is how this impacts public transport. Would the light rail system from Sea-Tac still be able to maintain a sufficient market share to be financially sustainable?
Hi Lloyd:
Both are fantastic questions. My sense at the moment is that car rental companies are likely losers in a landscape transformed by on-demand autonomous transportation, unless they re-invent themselves to deliver those services. Your question about public transport is spot-on. How do light rail systems—that run on fixed, hub-and-spoke networks—compete with point-to-point services? New York and other areas are already wrestling with this very issue. I believe that, in a perfect world, public transport will evolve to work intermodally with these other services, meaning you might take a big part of the trip on light rail, but then an autonomous car or even shared scooter might take you that last portion of the trip. That will require these systems to collaborate on everything from payment systems to UX coordination; so far, all the players are saying the right things about such collaborations.
Devin
Interesting article. I think you are correct that airlines and airports have a big opportunity to extend their mobility service to ground transportation.
Hi Stephen –
Thanks for your comment. I’m optimistic on this front. Airports could play a big role in stitching together all the modalities, from the scooter you might take to the local Starbucks, to the airport shuttle you catch there, to the waiting wide-body aircraft or aerial taxi.
Devin
AVs will spur the most profound changes in landside mobility in our lifetimes. Rental car companies will have to become the fleet maintenance providers for those companies that own fleets of AVs. The biggest losers could be the TNCs like Uber and Lyft as the auto makers establish their own AV fleets. The bigger question is who or what will stop the auto makers from monopolizing the AV industry? They make the vehicles and they are either buying or partnering with the providers of AV technology such as Waymo (owned by Alphabet) or Cruise (owned by GM). So, if the auto makers and the behemoth corps like Alphabet establish a business agreement, will they control all AVs in the future?
Hi Laurence –
Great comment. That scenario is certainly a possibility, and a likelihood if one assumes that automotive OEMs will need to finance significant R&D efforts through the development of their own TNCs. However, another possibility is that the likes of Uber and Lyft outmaneuver the OEMs (which are used to designing and manufacturing, after all) by owning the thin user interface that links the TNCs with consumers in the everyday. In that scenario, the OEMs essentially become box makers to brands that want to use vehicles for whatever purpose they envision. That is the biggest fork in the road, in my opinion, when envisioning the future of automotive. Another possibility, by the way, though less likely, is that cities get into the TNC business. There is some precedent for this already, though there’s less momentum than there should be. But, cities could come to see AVs as an essential part of in-city transit and shift away from just hub and spoke models (buses, light rail) toward a more integrated mix, including point-to-point AV service.
Devin