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CALIFORNIA / News and Insight on Business in the Golden
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L.A. Council OKs Shuttle Plan for LAX

Transportation: But hurdles, which include a fight by a consortium of 14 small firms, are likely to delay the overhaul of airport van service.

November 14, 1998|MARLA DICKERSON | TIMES STAFF WRITER

The Los Angeles City Council pushed mom-and-pop van shuttle owners closer to the exits of Los Angeles International Airport on Friday by approving a controversial plan to slash from 38 to three the number of full-service firms operating at LAX.

Unanimously and without discussion, council members gave a thumbs up to a plan by LAX officials to grant SuperShuttle, Prime Time Shuttle and Xpress Shuttle near-exclusive rights to pick up passengers in exchange for a minimum annual payment of $1 million each.

But the long-delayed overhaul of passenger van service at LAX could be stalled several more months by regulatory and legal hurdles, including a pending lawsuit filed by small carriers who say they'll be destroyed by the three-company plan.

"We're going to continue to fight," said Mike Kohsari, a member of Shuttle 2000, a consortium of 14 small shuttle firms that is suing the city and the airport to reopen the bidding process.

Friday's vote is just the latest development in what has been a long and contentious fight to overhaul shuttle service at LAX. Concerned about traffic-choked curbs and consumer complaints about lousy service, airport officials want to chuck the current system of freewheeling competition for a concession system similar to those operating at other major U.S. airports.

After a lengthy bidding process, LAX officials initially selected the airport's two largest carriers, SuperShuttle and Prime Time, as winners of the coveted contracts. Howls of protest from the mom-and-pop operators led to the selection of an additional competitor, a five-company consortium called Xpress Shuttle.

Airport officials had hoped to have the new, three-company system up and running by early September. But they've been slowed by the lawsuit as well as state regulations requiring contract winners to obtain an extra level of California Public Utilities Commission licensing before beginning the new operation. Airport officials initially had planned to forge ahead and let the winners obtain this licensing after the fact, but they reconsidered at the urging of their own attorneys.

To date, none of the three companies has obtained those licenses. PUC officials say SuperShuttle could be the first, perhaps as soon as mid-December. But it could take longer for Prime Time and Xpress to get the PUC's blessing. Smaller competitors have protested the license applications of those two carriers, alleging a host of infractions that PUC officials say will take a few months to investigate.

That presents airport officials with yet another complication. Do they wait for all three contract winners to obtain PUC licensing before launching the new shuttle plan? Or do they launch the program as soon as even one of the companies obtains its licensing?

"Right now, it's uncertain how we're going to implement it," said Assistant City Atty. Tim Hogan. "We'll be making a decision within a few weeks."

Under the new concession system, only SuperShuttle, Prime Time and Xpress will be given permanent space at the curbs around LAX. Other shuttle companies will be allowed to drop off passengers and pick up reservation customers, but they'll be shut out of the lucrative walk-up business that is the bread-and-butter of many small operators.

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