Small Shuttle Firms Accuse Airport of Favoritism

The success of Shuttle Express, a new airport shuttle service, has come at the expense of smaller competitors, who complain of as much as a 65% drop in business and charge that airport and hotel officials have given the giant transportation company preferential treatment.

Shuttle Express, a licensee of Super Shuttle, a national company that provides transportation to several airports throughout California and the United States, began operating at Lindbergh Field in November with 35 vans.

In the two months that Shuttle Express has been in San Diego, the 12 other shuttle companies working the airport said, it has made deep penetrations into their operations and replaced some of them in the lucrative hotel-transportation market.

Smaller owners such as Lloyd Gregware of Gregware Limos complained that revenues and riders are shrinking as costs mount.

“Business used to go up and down, depending on the season,” Gregware said. “Now it’s been snatched away. It’s dead. The other day, I had a driver work the airport all day, seven hours, and he came back with $12. . . . I was making a living until about a month ago, but my business has gone down by at least 50% since Shuttle Express came to town,” said Gregware, who began his airport shuttle company nine years ago and operates three vans.

Gerry Reas, transportation specialist for the San Diego Unified Port District, which runs the airport, said he is not surprised that smaller companies are being affected by Shuttle Express. He said he expects three to six companies to go out of business in the next 24 months.

But Coleen Stroup, owner of Aero Express, which operates six vans, is convinced that Reas and other airport officials are contributing to their troubles by showing favoritism to Shuttle Express. Her feelings were echoed by other local operators.

Stroup said her business, which began in September, 1988, has gone down 65% since Shuttle Express arrived.

If the port is not favoring Shuttle Express, “how do you explain the two-page promotion that the airport did for Shuttle Express in its December flight schedule book?” she asked. “I didn’t get that kind of promotion when I came to town with my business.”

Reas denied that airport officials are favoring Shuttle Express.

“If you’re a small van operator, you must have some way to attract passengers other than just driving to the airport. You do this through advertising. A good many of the small operators don’t have the marketing sophistication to advertise or to know how to go about it,” he said.

Since its arrival in San Diego, Shuttle Express has advertised extensively.

“I’ve discussed these areas of concern with the people involved,” Reas said. “I told them it would become increasingly difficult for these folks to survive by their current methods of operations.”

The two-page promotion, which was done without cost to Shuttle Express, shows a picture of a Super Shuttle van and is titled “Super Shuttle Arrives.”

Reas called the promotion an “announcement.” He said similar announcements are done for any new service that begins at Lindbergh Field.

“It wasn’t a promotion of Shuttle Express and Super Shuttle but an announcement that the service was here. Our viewpoint is that Super Shuttle is a generic term for airport shuttle services. They have become so large and successful that their advertising serves to promote all shuttle services,” he said.

Meanwhile, as riders and revenue go down, costs, particularly, insurance, continue to rise, operators said. Gregware said he pays more than $11,000 a year in insurance for his three vehicles, and Stroup said she pays almost $20,000. Insurance premiums increased in 1988 when the state required operators to carry a minimum of $1.5 million in liability insurance per vehicle, Gregware said.

Meanwhile, both he and Stroup claim that many of the better San Diego hotels “have aced us out of the airport transportation business.” Hotels such as the Town & Country and the San Diego Princess Resort are now calling only Shuttle Express, Stroup said.

Tom Vincent, general manager of the San Diego Princess, said his hotel does not have an exclusive contract with Shuttle Express, but called the company “the preferred carrier in and out of our hotel.”

“We don’t have an exclusive contract with them, and to my knowledge we have not refused any of the other companies or pushed them out,” he said. “But we felt that we get a higher level of service (with Shuttle Express) for our guests than previously provided by other independent operators.”

Reas said the smaller shuttle companies can survive only if they form a cooperative to compete effectively.

“The smaller companies don’t have the resources to advertise. Their only chance is to band together into an association, like the cabs have done. By grouping under one common sign, they could maintain their identity, but they would also cooperate in dispatching and advertising. Only then can they compete” with Shuttle Express, he said.

Taxi companies apparently have not been significantly affected by Shuttle Express. Unlike vans, which are not allowed any waiting time, cabs can park at taxi islands to wait for passengers. There is no limit to the number of cabs a company can have at the island, but only two vans from each shuttle company are allowed to pick up passengers at the shuttle island at a time. Because they are not allowed to wait, vans must keep circling the airport until a passenger flags them down. Vans are not allowed to pick up at the terminal curbs.

Airport rules allow cab drivers to solicit passengers, but shuttle drivers cannot.

“The port can make it more equitable for smaller shuttle companies if they allowed the vans to wait at the shuttle island like they do cabs,” Stroup said. “They should allow us enough waiting time so customers can approach us and inquire about our fares. This would allow us smaller operators to compete better with Shuttle Express.”