SUBJECT: ANNUAL AIRPORT GROUND DATE: April 18,2016 TRANSPORTATION (AIRPORT)

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1 CITY OF Er 3 SAN JOSE CAPITAL OF SILICON VALLEY T&E AGENDA: 05/02/2016 ITEM: d (6) Memorandum TO: TRANSPORTATION AND ENVIRONMENT COMMITTEE FROM: Kimberly J. Becker SUBJECT: ANNUAL AIRPORT GROUND DATE: April 18,2016 TRANSPORTATION (AIRPORT) Approved tn OS,, L ^ Date //c. RECOMMENDATION Accept the annual status report for the Airport Ground Transportation Program. BACKGROUND At the November 10, 2015 City Council meeting, City Council approved the permitting and operational requirements for Transportation Network Companies (TNC) to operate with further direction included in a memorandum signed by Mayor Liccardo, Vice Mayor Herrera, and Councilmembers Peralez, Rocha, and IChamis dated November 6, 2015, Councilmember Peralez' memorandum dated November 10, 2015 and the assurance that all TNC fines be paid before being allowed to operate at the Airport. Staff was requested to continue to research the availability of data related to accidents and/or incidents occurring at the Airport, whether predatory pricing/permitting was violated and to determine driver's requirement to have business licenses visible and available for inspection At the November 17, 2015 City Council Meeting multiple actions related to the taxicab industry were approved in an attempt to level the playing field between the taxi industry and other ground transportation operators, including TNC's. Staff recommendations, including restating the agreement with Taxi San Jose for Dispatch Services, and additional direction included in a joint memorandum from Mayor Liccardo, Vice Mayor Herrera, and Councilmembers Peralez, Rocha, and Khamis dated November 13, 2015 were approved. Staff was directed to move forward with the approved direction and to bring back the necessary revisions to the Municipal Code. Staff was directed to return to the Transportation and Environment Committee in six months to update the Committee on the actions taken, the effect of TNC operations on the taxis and the status of the Airport Access Permit allocations during the annual update on the Airport Ground Transportation Program. Three TNC companies met all requirements and were permitted to operate at the Airport. Wingz began operation on November 19, Lyft on December 11 and Uber on December 18, 2015.

2 April 18,2016 Page 2 of 6 Taxi San Jose's restated Agreement to perform On-Demand Dispatch Services commenced on February 1, 2016, allowing the Airport to reduce the On-Demand Cost Recovery Fee from $1.95 to $1.55 as of that date. At the March 22, 2016 City Council Meeting, the revisions to Title 6 and Title 25 of the Municipal Code related to the November 17, 2015 actions were approved by City Council. ANALYSIS: TNC operations are still relatively new to the Airport environment, however appear to be having an impact on customer service, curbside activity and to taxi and commercial shuttle trip volumes. Trends are just being established and it is too early to tell what the long term impacts will be. Customer service issues and complaints have been reduced dramatically with the start-up of TNC operations. The many people who complained about lack of service now have the opportunity to use the service of their choice and beyond early concerns with way finding signage there is little comment regarding TNCs coming through the Airport's customer service section. Staff has not seen any activity related to predatory pricing schemes, nor have there been any increases in accidents or incidents due to the increased volume of the TNC operations. The increased volume at the curbsides is being studied to determine whether their pick-up locations need to be relocated to prevent congestion with other operators and to assist passengers in finding their rides. The charts below show January through March 2016 data for taxis, shuttles and TNCs, including 2015 data for taxis and shuttles. Taxi Trips 2015 vs January February March Total Trips ,173 24,735 27,514 78, ,986 23,375 24,366 72,727 Variance # < 1,187 > < 1,360 > < 3,148 > < 5,695 > % Change < 4.5% > < 5.5% > <11.4% > < 7.3% > Commercial Shuttle Trips 2015 vs January February March Total Trips ,337 1,234 1,302 3, ,269 1, ,325 Variance # < 68 > < 175 > < 305 > < 548 > % Change <5.1% > < 14.2% > < 23.4% > < 14.1% >

3 April 18, 2016 Page 3 of 6 TNC Trips January February March Total Trips to Date ,652 27,696 32,092 89,440 Overall staff is starting to see changes in customer decision making regarding their use of ground transportation to and from the Airport. Again, three months is not long enough to complete a full analysis or to determine long term trends, however, staff estimates that there is at least a 20,000 trip per month increase in GT trips from the Airport over the first three months of this calendar year. While passenger growth for January and February have increased by 8.9%, parking exits have only increased by 2.5%, so there may be some slippage in parking operations due to customer choice towards using GT operators rather than friends, family or themselves driving to and from the Airport. Staff will continue to monitor these activities. Audits During the past six months staff has monitored the taxi and TNC operating conditions at the Airport. Airport staff has coordinated with SJPD and performed six curbside audits of TNC drivers and plan two additional audits between the submission of this memo and the T&E Committee meeting on May 2 nd. These audits have been frequent at the start-up of TNC operations to ensure compliance and will continue into the future in coordination with the major full GT audit program discussed later in this memo. During curbside audits, Airport staff has checked TNCs for the presence and visibility of required trade dress and whether TNC drivers have a City of San Jose Business License in their possession. SJPD checks each driver's license, registration and insurance paperwork. If documentation is not in order, the police are prepared to run a fingerprint check on the driver. If all paperwork and documentation is in order, fingerprint checks are not performed. SJPD must find a valid reason to run a fingerprint check and do not perform fingerprint checks randomly on drivers when all documentation is in order per SJPD and California Vehicle Code (CVC) standards. As a result of the curbside TNC audits, a total of 513 TNC drivers have been checked to date. All drivers were able to satisfy SJPD requirements on documentation with the exception of one driver who had an outstanding warrant against him. During the first audit on February 24, 2016, Airport staff found that none (0% percent) of the TNC drivers had a business license in their possession. Staff immediately sent notifications to each TNC company stating our findings and directed each TNC company to firmly inform their drivers of the requirement to obtain a San Jose Business License. This notification was quickly followed up with formal letters to each company. Subsequent audits saw the number of drivers with a business license in their possession improve. The percent of drivers with Business Licenses in their possession during this audit process has fluctuated but is getting better over time. Airport staff has communicated with the City Finance

4 April 18, 2016 Page 4 of 6 Department and will provide information to them in order for their staff to pursue individual drivers who have not met their obligation to obtain a City of San Jose Business License. The City Finance Department has the authority to charge misdemeanor violations and levy fines against drivers who do not comply. Airport staff however, is not authorized to issue Administrative Citations for this offense but have been handing out warnings and pamphlets to drivers providing the details on how to obtain the mandated requirement of having a Business License to operate in San Jose. Citations issued by Airport staff during the early inspection processes for lack of business licenses have been or are being rescinded. In addition to the curbside audits, Airport staff coordinated and performed one multi-agency major audit of all Ground Transportation (GT) operators, which included TNCs. Another multi - agency major audit of all GT operators is scheduled before the end of April. These major audits are a collaborative effort between a number of regulatory agencies that include Airport personnel, SJPD, the California Public Utilities Commission (CPUC), California Highway Patrol (CHP) (who physically check vehicles capable of carrying over 10 passengers), and County Weights and Measures who inspect taxis to ensure on-board meters are calibrated properly and are accurately recording mileage and associated fares. Results of this multi-agency major audit are listed below. Airport Curbside Audit Activity: 6 audits performed on TNCs only 2 additional curbside audits (TNC only) are scheduled in April Total TNC drivers checked during curbside audits to date = 513 drivers First Inspections 0% had business licenses, most recent inspections 37% had business licenses 27 drivers were cited for not having the appropriate trade dress visible on their vehicle Multi-Agency Major Audit - March 11, 2015 Weights & Measures: 76 taxis checked with 13 violations issued CPUC: 90 GT operators checked overall with 21 violations issued CHP: 5 vehicles checked with 4 citations and 2 verbal warnings issued Airport: 111 TNC drivers audited, only 6 had business licenses Additionally, the GT permit for TNCs requires added background checks, shown below. Enhanced Background Checks (1 % of total number of drivers performing pick-up at Airport): # of drivers checked in January # of drivers checked in February # of drivers checked in March In process of submitting and awaiting results % of Passed Background Checks to Date 100%

5 April 18,2016 Page 5 of 6 Taxi San Jose Taxi San Jose, the Airport On-Demand Dispatch Company is getting close to deploying new technology and software that will create a more dynamic and flexible dispatching system. This should help Taxi San Jose manage taxis at the Airport more efficiently. The software provides similar functionality to that of the TNC software where drivers can be more 'on call' versus waiting an excessive amount of time in the Staging Area. This software is also a step towards the taxi industry being able to move into a more flexible fare structure recently approved by DOT (outside of the Airport On-Demand System) that allows for a more competitive market with TNCs on flexible fare pricing. Airport Access Permit Allocations As directed, Staff reallocated the Company Airport Access Permits in April. Staff has been redistributing the returned Driver Airport Access Permits with 50% to Drivers and 50% to Companies to work towards attaining the approved 60/40 driver to company ratio. As of April 18 th there are 183 driver permits and 117 company permits issued with the goal to be 180 driver and 120 company permits. Staff will continue to distribute returned permits on a 50/50 basis until the goal is attained. The pre-existing waiting list for drivers has been used for driver permit allocations and will be used going forward for all driver allocations. PUBLIC OUTREACH Since TNCs were authorized and issued ground transportation permits to operate at the airport, staff has made themselves available to all GT operators and TNC company management to receive phone calls and s to discuss ongoing operating conditions, answer questions, and provide information on the activities described in this memo. Additionally, the Airport's Deputy Director of Operations, Bob Lockhart, traveled to Sacramento on February 17, 2016 to testify before a joint oversight hearing consisting of the Senate Committee on Energy, Utilities, and Communications and the Senate Committee on Transportation and Housing. The focus of the hearing was for the Senate Committees to gather information on 'Ride-hailing Disruption' and 'Establishing a Level Playing Field in the Transportation for Hire Marked. Liane M. Randolph, Commissioner, California Public Utilities Commission, and staff from SFO and the San Francisco MTA were members of the panel with Mr. Lockhart. Incorporating direction from City Council to address issues regarding TNCs within our legislative priorities, Mr. Lockhart testified in support of encouraging CPUC regulations to require the use of California licensed mechanics for vehicle inspections, the use of biometrics/fingerprints in background investigations and for the CPUC to take efforts to level the playing field among all ground transportation operators within the state. The CPUC will be holding meetings at the end of April on their latest rulemaking processes regarding TNCs. Airport staff has also joined and will actively participate in newly formed group initiated by the San Francisco MTA (SFMTA) called 'Big City Partners'. The group will hold monthly

6 April 18,2016 Page 6 of 6 conference calls to maintain an on-going dialogue and focus on identifying and developing a common platform to manage TNCs. COORDINATION The drafting of this memorandum was coordinated with the City Attorney's Office. CEOA Not a Project, File No. PP10-068(c), Municipal Code or Policy that involves no changes to the physical environment. Kimberly J. Becker Director of Aviation If there are questions or any need for follow-up, please contact Bob Swensen, Landside Operations Manager at (408)