R Sheet on Airport Rental Car Access

Authors

C. Jarrett Dieterle
Resident Senior Fellow, Competition Policy
Nick Zaiac
Former Associate Fellow

Key Points

Governments own airports and control how ground transportation providers access them.

Government-determined airport access is prone to picking winners and losers, creating ad hoc and uneven terms of access.

Transparent regulations and fees can help make access to airport facilities more reflective of consumer demand.

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BACKGROUND

America’s airports are the core infrastructure of the nation’s long-distance passenger transportation market. They’re places where people from large regions meet to travel together to faraway cities before dispersing to their final destinations. The process works, for the most part: About 1 in 10 miles we travel is by air. But getting all these people to and from centralized transportation hubs isn’t so simple, and it has created a large market with specialized firms that must coexist with government airport infrastructure owners.

Land around airports is valuable transportation real estate, both for passengers and airport-using freight businesses. Beyond freight operations, areas immediately adjacent to airport terminals are occupied by a mix of car parking (with shorter-term lots at higher rates in closer proximity), rental car depots, and places for taxis and transportation network company drivers to wait.

Airport access points are limited, and their associated infrastructure is scarce. As the owner and regulator of those access points, airport authorities, in their role as government planners, are empowered by states to decide whether and how to manage the demands of various potential users. Their decisions determine how people get to and from their flights, and whether any particular type of access receives government preferences that safeguard their ground transportation market share. Airport parking is one such market, but one of decreasing importance with the rise of new transportation network companies. A more challenging question is how to regulate access for new types of online-platform-based rental car companies and other developing technologies.

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