Economics of Employees vs. Independent Operators John McCarthy

Go Airport Express City Operation –175 Unionized Employee Drivers Suburban Operation –60 Independent Operators 2

Independent Contractor Driver / Vehicle Owner –Partner –Receives Majority of Revenue –Assumes Majority of Operating Risk 3

Employee Productivity –Number of Passengers Carried On time Performance Number of Trips Operated –Vehicle Maintenance and Repair –Fuel Consumption 4

Employee Compensation and Motivation –Hourly Rate –Commission Formula 5

Employee Costs –Overtime Premium Pay –Fringe Benefits Paid Time Off Health Insurance Pension –Payroll Taxes Social Security, Unemployment, Workmen’s Comp Insurance 6

Employee Unions –Negotiated Wages Rates & Guarantees –Negotiated Work Rules Productivity Flexibility 7

Employee Unions (Continued) –Negotiated Benefits Health Insurance Pension –Underfunded Pension Liability 8

Market Environment Competition –Driver Status, Qualifications and Compensation 9

Market Environment Differentiating from the Competition –Flexibility with Pricing Shared Ride vs Cab Rate 10

Market Environment –Ability to Build a Higher Load Factor Ticket counters & Curb Space –Convenient and Visible Signing – –Highly Visible Directional Signage to Counters and Loading Zones Announcements in Baggage Claim 11

Chicago’s Front Desk

Present Day Shared Ride How can Airport Shared Ride Survive with Employee Drivers? –Create a Market Environment that supports shared ride services. –Have an Airport Fee Structure that supports quality employment and provides a return on investment for the company owners. 13

Shared Ride in 1950s – 1970’s Survived due to the following: –State Regulatory Commissions created a market environment that supported shared ride serivces. Monitored Profits and Return on Investment –Providing protection for both the consumer and company owner. 14

Opportunity for Airports Today Create and Monitor an Economic Environment that Provides: –A Low Cost Transportation Alternative –An Important Green Alternative of Shared Ride Service at the Curb. –Quality Employment with Wages & Benefits –Return on the Capital Invested in the Operation 15