Performance and Design of Taxi Services at Airport Passenger Terminals David Carvalho Teixeira da Costa Dissertação para obtenção do Grau de Mestre em Sistemas Complexos de Infraestruturas de Transportes (CTIS) Júri Presidente: Prof. Dr. José Manuel Viegas Coordenador: Prof. Dr. Richard de Neufville Co-coordenador: Prof. Dr. Rosário Macário Vogal: Prof. Dr. João Claro Outubro, 2009
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Performance and Design of Taxi Services at Airport Passenger Terminals
David Carvalho Teixeira da Costa
Dissertação para obtenção do Grau de Mestre em
Sistemas Complexos de Infraestruturas de Transportes (CTIS)
Júri
Presidente: Prof. Dr. José Manuel Viegas
Coordenador: Prof. Dr. Richard de Neufville
Co-coordenador: Prof. Dr. Rosário Macário
Vogal: Prof. Dr. João Claro
Outubro, 2009
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Acknowledgements
Throughout this academic adventure, there were many times when I wondered on the actual
relevance of the result of my work or my ability to finish it. It’s only normal to lose faith at certain
moments during the writing of a thesis, but I never lost mine, fortunately. Self-motivation is a key
instrument for researchers who are forced to semi-isolate themselves and dive into the complex work
they perform, and I’ve learned that very well. Although one should always try to think ahead,
regardless of the difficulties, it was not always easy to identify that line of thought that eventually
drives your work to success, and the help of our supervisors is like a light in the dark. Their role in this
process was fundamental, not only to guide and keep motivation running, but also to teach, and most
certainly to learn as well.
I’d like to thank Professor Richard de Neufville for his rich and enlightening coordination, his
unyielding patience and his faith on my capacity to actually work with him on this topic. For me, it was
an honor to work with such a brilliant academic mind and to be able to tap into several hidden truths of
engineering. Through his classes, through his coordination and teachings and through his own unique
perspective, I have surely become a better engineer, better prepared for my professional life. I’d also
like to thank Professor Rosario Macário, which has co-supervised my thesis and has always been
there whenever I needed closer guidance on several issues, especially regarding the regulation and
institutional parts.
This work implied a substantial effort to plan and execute data gathering initiatives. For several
days, I had to travel to the airport and spend some hours observing how queues behaved. For this I
needed help and help I got. Teixeira’s help in this phase was magnificent and I thank him for the
courage, friendship and sacrifice of standing by my side at the airport, in the middle of August, during
almost a full day. In an environment where the observed people did not like to be observed, a
significant effort had to be made to disguise my presence. Unfortunately, this was not always easy - a
very rich experiment for me. Also, I’d like to thank Mauro, my tireless friend and colleague, who has
spent the last year fighting for the same objectives as myself. For all the sleepless nights spent at IST,
for all the obstacles we’ve overcome…we make a great team and you know I admire you!
To all my friends and family, my ex-colleagues at Engimind and Lisbon Municipality and my
professors at CTIS, my huge thank you. Couldn’t have done it without you!
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Abstract
The main objective of this dissertation is to analyze, through the consideration of a case-study -
Portela Airport - the current operational and regulatory design options in systems of taxi service
provision at airport passenger buildings, and propose, based on its performance levels, alternative
schemes and possible interventions that can improve the existing services.
On the regulatory side, the methodology chosen to pursue these objectives was based on the
systematic analysis of the involved stakeholders, their institutional roles and power-sharing
mechanisms. On the operational side, an extensive data collection effort was performed and used to
calibrate a simulation model which represents system behavior. Both of these analyses were then
subject to a scenario-building process, in order to test different stimulus for both perspectives.
As main conclusions, it must be stated that the current taxi service system at Terminal 1 is not
able to adequately cope with peak-hour solicitations and offer good quality of service to passengers at
these times. Queues are a fundamental part of the problem and their behavior must not be diluted in
average-based analysis that do not expose the frailties of the system at peak-hours, some of them
intensified by seemingly small exogenous factors such as police coordination or taxi maneuvering
needs. They may also be a key part of the solution, as slight physical rearrangement of queues or
service areas can lead to greatly improved service as regards queue length, delays and reliability.
ANA and Lisbon Municipality should thus behave proactively to face this problem.
Key Words:
Taxi Services
Queuing Systems
Airports
Regulation
Simulation
Simul8
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Resumo
O objectivo desta dissertação é analizar, através da consideração dum caso de estudo –
Aeroporto da Portela – as actuais opções de design operacional e regulatório em sistemas de táxi em
Terminais de Aeroportos, e propor, baseado nos níveis de performance, esquemas alternativos e
possíveis intervenções que permitam melhorar os serviços existentes.
Do lado regulatório, a metodologia escolhida para alcançar estes objectivos foi baseada na análise
sistemática dos stakeholders, seus papeis institucionais e mecanismos de partilha de poder. Do lado
operacional, um esforço extensivo de recolha de dados foi efectuado e usado para calibrar um
modelo de simulação que representa o comportamento sistémico. Ambas as análises foram sujeitas a
um processo de construção de cenários, de forma a testar diferentes estímulos.
Como principais conclusões, sublinha-se que o actual serviço de táxis no Terminal 1 não é capaz
de adequadamente lidar com solicitações de período de ponta e oferecer boa qualidade de serviço
aos passageiros. As filas de espera são parte fundamental do problema e o seu comportamento não
deve ser diluído em análises baseadas em médias que não expõem as fragilidades do sistema nos
períodos de ponta, intensificadas por factores aparentemente pequenos e exógenos como
coordenação policial ou necessidade de manobras dos taxis. As filas de espera podem ser parte da
solução, já que ligeiras reorganizações destas ou das áreas de serviço podem levar a grandes
melhorias no que toca à sua dimensão, tempos de espera e fiabilidade. A ANA e o Município de
Lisboa devem comportar-se proactivamente para enfrentar este problema.
Figure 17 – Institutional framework regarding Portela’s taxi service system ......................................... 50
Figure 18 - Schematic classification of taxicab regulatory systems (Schaller, 2007) – Lisbon case, in
blue ........................................................................................................................................................ 51
Figure 37 - SWOT analysis for Policy Action III - Market segmentation and other changes to the
Departures Taxi Stand ........................................................................................................................... 79
Figure 38 – System configuration for Scenario I – Extra Service Lane, 2 extra servers ....................... 80
Figure 39 – Main SIMUL8 results for the Scenario I system configuration ........................................... 81
Figure 40 - System configuration for Scenario II – One service lane, multiple servers ......................... 82
Figure 41 – Main SIMUL8 results for the Scenario II system configurations ......................................... 83
Figure 42 - System configuration for Scenario III – 2 queues, Special Service Type ........................... 84
Figure 43 - Main SIMUL8 results for the Scenario III system configuration .......................................... 85
Figure 44 – Results for the main Queue Size indicators ....................................................................... 86
Figure 45 – Results for the main Queuing Time indicators ................................................................... 86
Figure 46 - Schematic classification of taxicab regulatory systems (Schaller, 2007) .......................... 101
Figure 47 - Key characteristics of entry-related policies - adapted from (Schaller, 2007) ................... 102
Figure 48 – Customer Wait Time versus Number of Taxis (Li, 2006) ................................................. 105
Figure 49 – Mean customer demand by time of the day (Curry, 1977) ............................................... 106
Figure 50 – Collected Inter-Arrival Times ............................................................................................ 114
Figure 51 – Collected Service Times ................................................................................................... 116
Figure 52 – Exponential Theoretical Distribution fitting to the Inter-Arrival Times experimental
distribution ............................................................................................................................................ 117
Figure 53 – Goodness of fit and descriptive statistics summary for the Inter-Arrival Times............... 117
Figure 54 – Lognormal theoretical distribution fitting to the Service Times experimental distribution. 118
Figure 55 - Goodness of fit summary and descriptive statistics for the Service Times ....................... 118
Figure 56 - Lognormal theoretical distribution fitting to the Service Times experimental distribution
Shared-ride services, which include shared-taxis, respond immediately to travel requests made by
phone or street hail and for this they charge a premium. These modes are generally heavily regulated,
but can offer several benefits, such as direct cost savings, peak-load shedding – especially where
congestion charging schemes exist – and off-peak specialized curb-to-curb services to senior citizens,
disabled persons, and the poor. (Cervero, 1992) Dial-a-Ride vans or shuttles are shared-taxis with
greater capacity. These services - such as Super Shuttle or Prime Time in the U.S. - became a fast
growing business in terms of the shared-ride airport ground transportation market, especially in
deregulated environments, with open competition on taxis and buses (Cervero, 1992).
Figure 1 – Two examples of Private Service Paratransit services, adapted from (Cervero, 1992)
1.3.2. Literature Review
1.3.2.1. Regulation
Taxi regulation, including airport taxi contractual arrangements, has been a hot topic of discussion
in many developed countries for the better part of the last half of the 20th century. Like with many other
modes of transport, the regulatory environment decisively influences the operational performance
levels, the level of service and the market exploitation degrees of freedom. This aspect is fundamental
in the analysis of any airport taxi service system, since the interactions between the several inter-
dependent actors are complex and sometimes competing. Also, the general aspects of taxi regulation
within cities and regions might sometimes be inadequate to the airport’s operational micro-
environment, due to the specificity of the targeted market – the airport passengers.
Like many discussions on regulation and deregulation of other transport modes and sectors of
economic activity, the taxi market motivates strong disputes on economic and social efficiency, equity
and welfare maximization. On one side, fundamentals of economic theory, supporting free market
benefits such as lower prices, innovation and higher level of service, deriving from increased
competition, supported by relatively good experiences in other sectors and other modes of
transportation. On the other, imperfections in practice that many times lead to market failures, which
call for regulation (Schaller, 2007).
Liberalization supporters base their reasoning on the claim that restrictions on entry to the taxi
industry constitute an unjustified restriction on competition, while also allowing for regulatory capture.
This means that large transfers from consumers to producers might occur, along with associated
economic distortions and corresponding deadweight losses. Furthermore, this perspective defends
that no solid proof exists on the claim that equity is better promoted through the implementation of
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entry restrictions; on the contrary, higher prices and lower availability affect lower income taxi service
consumers (DeVany, 1977) (OECD, 2007).
The availability argument is also very strong on the part of the deregulation supporters. Some
authors go as far as stating that “Studies have found that travelers are more sensitive to the
availability of taxis than they are to travel times, speeds, or almost any other service features. Where
taxis are given unrestricted freedom to ply their trade, the quality of’ urban transportation has generally
improved.” (Cervero, 1985). Numerical limits on taxis are at the center of this argument for risk of low
availability, which also focuses on the excessively high prices for medallions and permits, which have
emerged as a profitable secondary-market, due to the scarcity of new permit issuing initiatives. There
is also a strong belief that there is no economic justification to the restrictions imposed on alternative
service types, such as shared-ride and dial ride, preventing them from competing for parts of the
transit market largely monopolized by other transport operators (Frankena, 1984).
Pro-regulation supporters often point to significant risks of market failure to defend regulatory
measures on market entry access and quality of service. Among the most argued market
imperfections are the significant economies of scale and scope, which distort competition on some taxi
market segments, cross-subsidization between geographical areas and operational periods,
information asymmetry, negative externalities and oversupply (Schaller, 2007) (La Croix, 1986) (La
Croix, 1991). Some of the pro-liberalization supporters also admit to the need for certain regulation,
assuming that some of the potential market failures provide a credible theoretical rationale for certain
types of regulations, including fare ceilings, prohibition of trip refusals and regulations dealing with
vehicle safety and liability insurance (Frankena, 1984). Quality-based regulation is also seen as a
necessary complement to a desirably open entry policy, in order to maintain and support the benefits
that it generates. Competing interests between producers and users and diversity of demand patterns
across cities are also often recognized as significant issues of regulation (OECD, 2007).
A third perspective has also emerged, based on the idea that, instead of a simple choice between
regulation and deregulation, a spectrum of entry policies should be adopted. This relates to the
contextual dependence of the taxi sector regarding regulatory and operational conditions, which differ
from country to country and even between regions, as can be seen from (Gallick, 1987), (Cairns,
1996) and (Flath, 2006). According to this perspective entry restrictions and policies have different
impacts on different regulatory and economic environments and thus should be analyzed case by
case (Schaller, 2007).
Airport taxi arrangements specifically are also subject to many of the abovementioned
considerations. The contractual types present at airport taxi stand concessions are a relevant issue,
since different arrangements can lead to different impacts on service access and efficiency.
Categorization is usually defined into three types: Exclusive Contract, where a single taxi company is
granted the privilege to solicit passengers leaving the airport; Permit System, when a government
agency issues a limited number of permits to selected taxi operators to provide service and Open
System, in which any licensed taxicab in the metropolitan area is allowed to solicit passengers at the
airport. There seems to be no optimal arrangement for all situations, because there are significant
trade-offs between the criteria that airport authorities or government entities find relevant, as possible
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concessionaires. Political and economic conditions are not geographically homogenous and often
dictate the weights of each of these criteria. (La Croix, 1986) (La Croix, 1991)
1.3.2.2. Modeling, Queuing Theory and Simulation
One of the key aspects of this study is the modeling of a taxi service stand at an airport terminal, as
a way to test the performance of several design alternatives – more information on the reviewed
studies regarding modeling, queuing and simulation can be found in Annex I. Queuing Theory is a
fundamental piece of the knowledge background of this thesis, so a first look at the basic queuing
concepts is fundamental for contextualization. The main structure of a queuing system is composed of
three basic elements, each characterized by a set of attributes (Valadares Tavares, et al., 1996):
Source or Population – which generates clients arriving to the system, and is characterized by:
Population Dimension – infinite or finite. Infinite population - when the probability of
occurrence of a new arrival on a certain time interval is not influenced by the current number
of clients already in the system. Finite population - when the current number of clients in the
system can be a significant part of the population.
Arrival Dimension – usually divided into Individual arrivals or Group arrivals.
Arrival Control – Controllable or Incontrollable arrivals. Controllable arrivals – when the
arrival process can be limited and predicted through some mechanism (such as different days
for posting an application for the university). Uncontrollable when there is no obvious way of
limiting or predicting the arrival flows (arrivals at a Hospital).
Arrival Distribution – Usually described through the inter-arrival times distribution, which can
be constant, with pre-defined time intervals or random, following experimental-based or
probabilistic distributions.
Arrival Rate – Usually represented through the symbol λ, indicates the average number of
clients that arrived per unit of time. When the arrival rate does not vary, it can be considered
independent of the system state. On other situations, the arrival rate may vary according to the
current number of clients in the system, assuming the symbol λn.
Client Attitude – Usually classified as Patient and Impatient. Patient clients wait in queue until
entering service, whichever queue length or waiting time they experience. Impatient clients
give up and leave the queue after some waiting time or do not join at all from perception of
long waiting times and queuing.
Queue – Intermediate “storage space” element that is characterized by:
Number of Queues – There can be a Single Queue – when there is only one queue for all
servers, or a Multiple Queue – when there is at least one queue per server.
Queue Capacity – can be Infinite, when the maximum capacity is very large, when compared
to the number of elements that usually constitute it; Finite, when the queue can only contain a
smaller, limited number of clients.
Queue Discipline – The most frequent type of queue discipline is called FIFO (First In First
Out), in which clients enter service by the order at which they arrived in queue. There are
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other situations where queue discipline is based on some relevant attribute of the clients,
randomly or in a LIFO (Last In First Out), for example.
Service – is the system element in which a client is processed, and is characterized by:
Service Configuration – translates the way service is organized, as a function of the number
of servers (or channels) in parallel or the number of service stages. Several combinations of
these two factors can exist. In the case of multiple service stages, each originating a queue,
the system can be considered as a Queuing Network.
Service Dimension – Simple or Multiple. Similarly to Arrivals, with individual or group service.
Service Time Distribution – Similarly to the Arrival Distribution, service time can be
described by a distribution of service times or number of clients served per time unit. It can
also be constant or random, just like the Arrival case.
Service Rate – is usually represented by the symbol µ, and represents the average number of
clients that can be serviced per server and time unit. Similarly, if the service rate is dependent
of the system state (number of clients in the system), then it is usually represented as µn.
The classification of queues is usually based on the following criteria:
X / Y / Z / W
X – Inter-Arrival Times Distribution
Y – Service Times Distribution
Z – Number of parallel servers
W – Other system characteristics such as limited queue capacity (K) or finite population (N) –
when these are left blank or have the ∾ symbol, the system has no additional restrictions.
Among the most common measures of performance are (Valadares Tavares, et al., 1996):
Average Queue Length (Lq)
Average Number of Clients in the System (L)
Average Waiting Time in Queue (Wq)
Average Waiting Time in the System (W)
Average Occupation Rate of the Service (% of time service is occupied)
Other indicators can also provide detailed information on the functioning of the system:
Pn = probability of n elements existing in the system (queue+service)
P(n ≥ k) = ∑ ��∾��� = probability of k or more elements existing in the system
P(Wq=0) = probability of Queue Waiting Time being zero
Nomenclature on the main measures of performance is usually based on the following symbols:
λ – Arrival Rate
1 / λ – Average inter-arrival time
µ – Service Rate
M – Negative Exponential Distribution
G – Unspecified Distribution
D - Deterministic
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1 / µ – Average Service Time of a server
ρ = λ / mµ – Utilization Ratio, m = number of servers in the queuing system
Characterization of Arrival and Service distributions is usually done through a sequence of tasks:
1. Collect and describe information through histograms and sample parameters;
2. Infer the population parameters from the sample parameters;
3. Adjust a theoretical distribution to the experimental histogram, choosing it in order to
adequately describing the phenomenon.
Most Queuing Theory focuses on the stationary analytical methodologies for calculating values for
many of the abovementioned variables and measures of performance. The term Stationary or
Equilibrium is used when the system oscillates around an average situation, with the distribution of the
queue length being independent of time. It thus considers that arrival and service rates are relatively
regular and/or constant. Also, a queuing system will be able to reach a long-term equilibrium - “steady
state” - in its operation, only if ρ < 1 remains true, on the long run. The dynamic behavior of queues
(see example of Figure 2) is characterized by the following aspects (Odoni, 2007):
Expected delay changes non-linearly with changes in the arrival rate or the service capacity;
The closer the arrival rate is to service capacity, the more sensitive expected delay becomes to
changes in the arrival rate or the service capacity;
The time when peaks in expected delay occur may lag behind the time when demand peaks;
The expected delay at any given time depends on the “history” of the queue prior to that time;
The variance (variability) of delay also increases when the arrival rate is close to capacity.
Figure 2 - Expected delay for four different levels of service capacity at an Airport: R1= capacity is 80 movements per hour; R2 = 90; R3 = 100; R4 = 110 (Odoni, 2007)
Situations where the queue length tends to be infinite, because the arrival rate exceeds service
capacity or where arrival rates significantly vary according to the time of day (such as in many
transportation systems with traditionally high peak-hour demands), correspond to Transient States.
These situations cannot be modeled through the normal Stationary Equilibrium Equations and are
19
analytically complex. Such cases are often dealt with through the use of Simulation such as in (Curry,
1977), (Días Esteban, 2008) and (Cao, 2003). Simulation methodologies can effectively deal with the
peaks in arrival patterns; offer the freedom of using arbitrary distributions for the service time and
arrival patterns; dynamically test alternative schemes, quantifying the changes and offer animation to
support the communication at both management and operational levels (Joustra, 2001).
The fundamental relations that compose of the Stationary Equilibrium Equations are (Valadares
Tavares, et al., 1996):
L = λ . W
Lq = λ . Wq
W = Wq + 1 / µ
L = Lq + λ / µ
From the main equilibrium relationships one can deduct several expressions for the several types
of queuing systems, based on the birth and death processes. For queuing systems with Negative
Exponentially distributed inter-arrival times, any type of service time, one server and infinite queuing
capacity - M/G/1 system (Odoni, 2007):
Figure 3 - Delay versus Utilization ratio (ρ) and confidence limits evolution (left) and Dependence on Variability (Variance) of Inter-Arrival Times and of Service Times (right), adapted from (Odoni, 2007)
For queuing systems that reach steady state the expected queue length, expected delay and the
corresponding standard deviation are proportional to: 1 / (1 - ρ). Thus, as the arrival rate approaches
the service rate the average queue length, average delay and corresponding variability increase
rapidly - a large standard deviation implies unpredictability of delays. As can be seen from Figure 3,
there is a high sensitivity of delay at high levels of utilization, close to the maximum capacity (ρ = 1).
Expected delay increases at lower levels of utilization, in presence of high variability. (Odoni, 2007)
Expected delay is not the only factor that increases exponentially as the utilization ratio approaches
1. Unreliability is also a key issue concerning queuing systems and is equally affected by this ratio. By
Variability increases
σt – standard deviation of service times
E(t) = expected value for service times
Confidence Limits Confidence Interval
20
considering that most Arrival and/or Service rates may usually be described as Poissonian processes,
where variance is equal to the mean (E(X) = Var(X) = λ), then as average delays increase, so does
the variance of delays. Variance is an important measure of variability, which decisively influences the
confidence limits of the mean, greatly increasing the size of the interval of possible values as ρ
approaches 1. This means that as ρ increases, the unreliability also increases and the mere
occurrence of the higher limit values can jeopardize the entire functioning of the system due to
intolerable delays. When congestion occurs (ρ ≈ 1), delays can be tolerable (lower limit), or severe,
causing a complete breakdown of the system (upper limit), theoretically making waiting time infinite.
Although traditional queuing theory, which mainly focuses on stationary queuing processes, is
useful for conceptual contextualization and background, a different approach must be followed for the
case of Transportation Systems such as the Taxi. The Taxi demand at the airport is similar to that of
other transportation modes, conditioned by sudden peak-period increases, thus effectively making the
arrival rate be dependent on the time factor – Transient behavior. To measure, analyze and model
transient behavior, one must focus on the peak-hour evolution of queues using specific
methodologies, such as the ones described in (Newell, 1982), for example.
This method requires a lot of field data, for which at least two observers should exist, in the case of
the simplest situation with one queue and one service point. One of the observers should be placed
upstream of the service point to record the arrival times and identity of each customer that passes him.
The second observer is placed at the server to record the times and identity of the customers entering
the server and possibly a third observer just downstream of the server to record the times at which the
identified customers leave the server. Assuming an initial empty system, the arrival and departure
times of each individual customer are recorded and, if represented sequentially on a graph, can form
cumulative arrivals and departures curves (Newell, 1982). Having:
tj = Arrival time of customer number j
A(t) = cumulative quantity to arrive by time t, with tj ≤ t ; A-1
(x) = tj , for j-1 < x < j
tqj* = time customer number j leaves the queue and enters the service
tqj = time of the jth departure from queue (independently of queue discipline)
Dq(t) = cumulative quantity to leave the queue by time t
Dq*(t) = cumulative quantity to leave the queue by time t considering queuing discipline
Figure 4 – Graphical representation of cumulative arrivals and departures from a queue (Newell, 1982)
21
If one draws both A(t) and Dq(t) on the same graph (Figure 4), the curves cannot cross because,
for any t, the number of customers which have left cannot exceed the number which have arrived. The
vertical distance between the two curves at any time, representing the number of customers who have
arrived but have not yet left the queue, is Q(t).
Q(t) = A(t) – Dq(t) = quantity in the queue (Queue Length)
Assuming a FIFO discipline, tqj = tqj* and Dq*(t)=Dq(t), because customers will be sequentially
served according to the order they have arrived. If we draw A(t) and Dq* on the same graph (Figure 5),
the horizontal distance from A(t) to Dq* is the time which the jth
customer spends in queue:
Wj = tqj*- tj ≥ 0 = in-queue waiting time for customer j (this is also equal to the area of the
rectangular strip between A(t) and Dq*).
Figure 5 – Graphical representation of departure times (Newell, 1982)
If we were to place a third observer downstream of the server, he could record the times at which
customers left the server. From this we can define:
tsj = ordered time at which customer j leaves the service (in FIFO tsj = tsj *);
Ds(t) = cumulative number of customers to leave (in FIFO Ds(t) = Ds*(t))
A description of the server should at least define a relation between the curves Dq* and Ds*, i.e.,
between the tqj* and tsj*. The times each customer will be in service are given,
sj = tsj *- tqj*, for all j
The iterative process of finding Dq* and Ds* can easily be followed for most service systems in
queuing applications. If, for example, the server is a single-channel server, and for a given arrival time
distribution A(t), service times sj and queue discipline:
1. tsj *= tqj*+ sj
2. If the queue discipline is FIFO: tqj + 1 = max (tj + 1 ; tsj) = max (tj + 1; tqj + sj)
3. Within the conditions of points 1. and 2., wj +1 = max (0; wj + sj – (tj + 1 –tj))
The two main gross proprieties one may wish to calculate for queuing systems are the average
waiting time in queue for a set of n customers or the average queue length over some period of time.
The average time in queue for customers j+1 to j+n inclusive is defined as:
< Wk > = 1 / n * (∑ ����� ), with Wk = tqk*- tk
The average queue length is defined as (Newell, 1982):
< Q(t) > = (1 / (b-a)) * � ����. ���
� , for some time interval (a,b)
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Chapter 2 – Problem definition and methodology
2.1. Regulatory and Institutional Issues
2.1.1. Problem definition
There are several issues beyond the purely operational context which influence the ability of an
airport taxi service system to perform according to certain standards of quality. These are mostly
related to the regulatory and institutional framework that encompasses the operation.
Airport taxi stands are often under the responsibility of airport authorities or local government
branches, who concession the service to one or more companies under different types of contractual
arrangements, according to specific interests – collect rents and limiting rent-seeking by taxi
operators, provide good quality of service to its clients and be politically balanced. (La Croix, 1991)
The regulatory environment conditions the way these are designed and structured, sometimes
imposing significant restrictions on the level of customization that these contracts may require.
Regulation can also exclude the possibility of introducing alternative service types, such as shared-
Also relevant is the construction of the New Lisbon Airport (NAL), in the area of Alcochete (Figure
15) on the south bank of the river, which has recently been approved and is currently in the tendering
process. It will replace Portela airport in 2017, as the main aeronautical infrastructure of the country,
with capacity to handle up to 100 aircraft movements/hour, located at about 48 km from Lisbon. This
airport will also be served by a TGV link and standard trains in addition to taxis and buses. Portela’s
survival as an airport infrastructure after the inauguration of the NAL is still under discussion.
Figure 15 – Blueprints of the future New Lisbon Airport at Alcochete (Source: www.naer.pt)
There are a few well-known and traditional tourism destinations in the Lisbon Metropolitan Area
(see Figure 16). The main ones are the downtown and historical part of the city, located at about 7 km
from the airport, such as: Marquês do Pombal (17 minutes away - source: Google Maps), Chiado (21
minutes) and Belém (24 minutes); new cosmopolitan areas such as Parque das Nações (12 minutes);
Terminal 1
Terminal 2
39
and two places outside of the Lisbon Municipality: Sintra (34 minutes) and Cascais (37 minutes), both
to the West. One interesting fact is that most of these destinations, including the last two, are
approximately within 30 minutes and 35 km drive of the airport, unlike many European and U.S.
airports, which are sometimes located significantly far from the city center.
Figure 16 – Three of the main Tourism destinations from Portela Airport (marker A), in the Lisbon Metropolitan Area, upper left: Chiado, upper right: Belém, bottom: Cascais (Source: Google Maps)
Currently, Terminal 1 is directly served by six Carris (Lisbon’s main Bus and Light metro
transportation company) bus routes - buses nº 5, 22, 44, 83, 208 and 745 - with a ticket price of 1,4 €
per trip; the Aerobus route, which connects the airport to the city center every 20 minutes with a valid
daily ticket in all of Carris network for 3,5 €; the Aeroshuttle, which connects the airport to several main
multimodal transport stations in the city (Entrecampos, Oriente and Sete Rios), also costing 3,5 €, and
a taxi service, which has a minimum flag price of 2 € and outside of the city has a price of 0,46 €/km;
luggage or animal transport is charged at 1,6 € extra.
There is also a special pre-paid taxi service in Lisbon called Taxi Voucher. This service is available
to passengers arriving at Portela Airport who wish to travel by taxi. The service operates with vouchers
on sale at the Turismo de Lisboa counter, located in the Arrivals Hall of Terminal 1. The price of the
voucher depends on the distance of the trip and on the type of service required: normal or
personalized (in the latter, the driver is trained to speak foreign languages and acts as tourist guide).
The client pays a fixed fee according to the destination area. Prices for normal service of this type
range from 14,61 € to 25,36 € for trips within Lisbon and 48,60 € to Sintra and Cascais.
40
Regarding Terminal 2, there are only three ways for a passenger to get there: taxi, free shuttle from
Terminal 1 or private vehicle (paying for parking). This represents a risk if, for example, the passenger
has very little time to get to Terminal 2 and wishes to quickly pick up a taxi at Terminal 1. This
becomes a problem because of two factors: Long queuing at the Taxi Stand - if on peak hours - and
taxi driver’s resistance to making the trip. Excessive queuing is a common problem to all taxi
passengers at Portela during peak hours. Taxi drivers at the airport stand also wait, sometimes for
several hours, for a service they perceive as lucrative because of typically longer trips downtown. This
makes short trips such as from Terminal 1 to Terminal 2 undesirable and taxi drivers might pose
serious problems to this request – complaints about trip refusals or rudeness of drivers regarding short
trips are frequently heard among taxi passengers.
3.2. Analysis of the Taxi Service at Terminal 1
3.2.1. Regulatory and Institutional Context
The taxi service at Terminal 1 is the central point of analysis of this thesis. There are several
aspects to mention regarding the status quo of this service, from basic queuing elements to the higher
hierarchy of institutions responsible for the adequate functioning of the system. In this section, a
systematic analysis of the regulatory and institutional context is performed, according to Chapter 2’s
proposed methodology:
1. Analysis of the general market characteristics and regulatory environment, namely the
types of existing and possible contractual arrangements and access to profession.
2. Identification of the main stakeholders and their specific interests and bargaining power.
3. Identification of the hierarchical relationships between the involved institutional agents and
the sharing of responsibility and power among institutions.
The purpose of this section of the thesis is not to do a full in-depth analysis of regulations and
legislation concerning taxi services in Lisbon or to create a whole new institutional design, but rather to
highlight the main restrictions and variables that integrate the system overarching the operational
environment. The analysis of licensing requisites, regulations, hierarchies and power-sharing
mechanisms among participating entities allows for the identification of eventual incoherencies and
redundancies in the system, possibly opening the window for the testing of options for improvement.
Although the aspects involving institutions and other participating agents are a key aspect in this
context, they can assume a degree of complexity that goes beyond simple considerations of hierarchy
and power-share, due to some of their inherent opacity. An effort to listen to every actor’s position
pertaining to this taxi service’s performance was made, from the side of the Airport Authority, the Taxi
drivers and the Municipality technicians. Several of these informal inputs are present in the author’s
perspective and criticism of the whole institutional network of relationships, from what was perceived
of the logic of confronting the several collected views.
41
3.2.1.1. General Market Characteristics
As mentioned earlier, airport taxi stands are often seen by taxi companies and owners/drivers as
profitable service locations. In Lisbon, and despite the proximity of the airport to the city center, this
seems to be no exception. Distance, and to a certain degree, time, although always considered as
crucial income factors for drivers at the airport, are often accompanied by the luggage factor, which
allows for the charging of an extra fee of 1,60 €, and tips, which tourists are known to give, traditionally
more often than regular city locals. Another crucial element, that apparently makes long waiting times
in the taxi queue at Portela worthwhile, is the presence of a large supply of customers, mainly at peak
hours. Many of these customers, due to their high value of time and comfort needs, do not even
consider using other alternatives to the taxi, and often face the waiting time in the taxi passenger
queue as annoying, but unavoidable, compared to the perspective of taking a crowded bus downtown.
The main tourist destinations - and many other main passenger destinations - have been identified
(see section 3.1.2) but the core of this apparently profitable market is contained on the arriving flows of
passengers at the terminal, not so much on disperse demand for trips back to the airport. The size of
the market is closely related to the flows of deplaning passengers at Portela and the share of these
passengers that usually choose the taxi service as their primary transportation mode.
As previously mentioned, in 2000, a survey concluded that about 42% of passengers were tourists
and 28% traveled due to business motives (FCG-Parsons, 2002), while another source, in 2006,
states that 56% of the passengers of this airport had traditionally middle-high income professions.
(ANA, 2006) Also, in 2008, Portela processed about 13,6 million passengers, 1,5% more than in 2007,
following a steady but slow growth trend, since 2003. (ANA, 2008) The percentage of taxi users at
Terminal 1 was 38%, in 2000 (FCG-Parsons, 2002), later estimated at 30% in a 2006 study, by ANA.
These percentages, coupled with the fact that air passenger flows at Portela have not diminished
for a long time, means that Demand is not only relatively high and constant, mainly at peak times,
during certain periods of the day and of the year, but also that the customer characteristics themselves
are adequate for the transportation segment under analysis. It is common to associate taxi services to
middle-high income professions, business travelers and tourists, since it is a more direct, comfortable
(and expensive) way of travel, which obviously correlates with many airport passenger profiles.
On the supply side, taxis are highly abundant at the airport, gathering at the taxi parking facility,
about fifty meters from the terminal and queuing along the access road, on a segregated lane,
sometimes for several hours, according to some taxi drivers. The taxi queues are long and constant
throughout the active daily operational period of the airport. There are two taxi stands at Portela, one
in front of the Arrivals hall and another at the Departures hall. This secondary stand has long been a
topic of some discussion among some taxi drivers with respect to fairness of competition.
External competition for passengers is also present, mainly in the form of buses, special pre-
booked car services and rent-a-car companies. The first service type is mainly provided by Carris,
through the existence of six normal bus routes and two shuttle-like service routes. Special pre-booked
42
car transportation services are available for passengers who make reservations prior to boarding for
Lisbon or have a company agreement or business endeavor which allows them to access this type of
service. Rent-a-car companies, also abundant at Portela are an option for those wishing to travel from
the airport to the city, with increased freedom and immediate availability. The share of the market for
buses was, in 2000, about 7% (FCG-Parsons, 2002) while the share for rental cars was 10%.
Access to the Lisbon airport taxi stand is free to any licensed taxi, company and/or taxi driver in
Lisbon. The only two restrictions on service access are the maximum parking capacity of the stand
and the need to be a licensed taxi operator of a licensed taxi vehicle, the latter by the Lisbon
Municipality. Lisbon Municipality is the regulator of this service, determining the location of the stands,
their dimension and parking capacity and controlling the total number of issued licenses. There is a
regulation document (see 3.2.1.3), issued by the Municipality regarding all taxi services within city
limits, which defines service types, market access rules, vehicle requisites, etc. We can thus say that
the type of arrangement present in Lisbon is a kind of mix between an open system and a wider permit
system, in the sense that it is open to any licensed driver, but only Lisbon-registered taxis may solicit
service within city limits. There is no known specific contractual arrangement between the City, the
Airport and/or the sector-related associations/companies for the imposition of any other service access
restrictions; therefore, there is no actual permit system at the Airport.
3.2.1.2. General Licensing
Licensing of Taxi companies and individual entrepreneurs
Taxi services in Portugal can only be supplied by registered commercial companies or individual
entrepreneurs – in case of using a single vehicle in their fleet. These entities are subject to licensing
requirements, demanded by IMTT (Instituto da Mobilidade e dos Transportes Terrestres – Institute for
Mobility and Land Transportation). (IMTT, 2009)
Registration requires mandatory licensing, issued and renewable, with a maximum validity of five
years, constrained to the fulfillment of the following requisites:
Competence and ethical integrity of the administrators, managers or directors, in case of
companies and the license owner, in case of individual entrepreneurs;
Professional capacity, same as above;
Financial capacity: 5.000 € in the beginning of the activity and 1.000 € per licensed vehicle, at
renewal.
Legal framework consists of Decree-Law n.º 251/98, 11th of August, altered by Law n.º 156/99,
19th of September, Law n.º 106/2001, 31
st of August and Decree-Law n.º 41/2003, 11
th of March;
Order n.º 8894/99, 5th of May.
43
Licensing of Taxi drivers
The professional exercise of taxi driving and transportation services is restricted to the ownership
of a Professional Aptitude Certificate (CAP – Certificado de Aptidão Profissional), issued by the IMTT,
which also certifies the corresponding professional training courses. This renewable certificate is valid
for five years. Requisites for issuing of the certificate are:
Age between 18 and 65 years, minimum education level, Portuguese language mastership,
and drivers license (type B);
Having successfully concluded a Type I professional training course (minimum 17 years
old), certified by the IMTT (550 hours) - through training, or;
Having successfully concluded a Type II continuous training course (need to have 2 years
of experience in driving automobiles), certified by the IMTT (200 hours) - through
Professional Experience complemented by training, or;
Ownership of a license that enables the exercise of the taxi driver profession, issued less
than five years ago, in the European Union, or another country in case of reciprocity
agreements, just as long as the professional training is equivalent to the requisites of
Portuguese Law – through Title Equivalency.
Requisites for the renewal of the certificate are:
Having concluded a continuous training course of minimum 20 hours, if the person
exercised the profession for at least 36 months during the CAP’s period of validity;
If the previous condition is not verified, the minimum training duration is 50 hours.
Legal framework consists of Decree-Law n.º 263/98, 19th of August, republished by Decree-Law n.º
298/2003, 21st of November; Portaria n.º 788/98, 21
st of September, republished by Portaria n.º
121/2004, 3rd
of February.
Licensing of taxi service vehicles
The companies that are licensed by the IMTT to provide taxi services can register vehicles for taxi
transportation. These vehicle licenses are issued by the municipalities, restricted to public tendering,
within fixed contingents (numerical limits) with a periodicity of 2 years, and cease to be valid with the
end of the commercial license’s validity. They are sequentially numbered and identified with the
corresponding municipality, and then fixed to the vehicle through small plates. If the vehicle is
replaced or the ownership of the vehicle is changed by license transfer, the number of the license will
remain the same, even if there is a new issuing of the license. Once issued, the owner contacts the
IMTT, in order to integrate that vehicle in the global company license.
Legal framework consists of Portaria n.º 277-A/99, 15th of April, altered by Portaria n.º 1318/2001,
29th of November, by Portaria n.º 1522/2002, 19
th of December, and by Portaria n.º 2/2004, 5
th of
January; Order n.º 8894/99, 5th of May.
44
3.2.1.3. Regulation
Regulation of Lisbon’s Taxi services is the responsibility of the Lisbon Municipality, which has
created, in 2002 the “Regulation for the Exercise of the Activity of Taxi Services in the Municipality of
Lisbon” (CML, 2003). There are some interesting articles in this document, worthy of highlight.
Article 5th (Chapter III, Section I) of this regulation states that taxi services can only be performed
by vehicles with national plates, with a maximum capacity of 9 seats, including the driver’s, equipped
with a taximeter and driven by licensed drivers with a professional aptitude certificate (CAP).
Regarding Market Organization (Chapter III, Section II), article 7th mentions the types of services
allowed, namely that taxi services are a function of the travelled distance and waiting times or:
a) By the hour, as a function of Service Duration;
b) According to the itinerary, as a function of established prices for certain origin-destination trips;
c) By contract, as a function of a written agreement with a duration of more than 30 days.
The parking regime (Article 8th) speaks of the permission to solicit and pick up passengers
anywhere in the public road circulation network, except at less than fifty meters of a taxi stand, as long
as there is a visible vehicle parked there. It also states that the utilization of taxis within a taxi stand is
made according to the order in which these are parked (First-In First-Out). There is also the possibility
of the Municipality altering the locations of the stands, in the context of its traffic ordnance
competencies.
The fixation of contingents, numerical limits on the number of taxis serving the city, is defined by
the Lisbon Municipality for the whole Municipal area, according to article 9th. This will be periodically
reviewed with a frequency not less than two years and preceded by a consultation of the
representative sector-related entities. For this procedure, the global needs of taxi services in the
municipal area will be taken into consideration.
Article 11th (Chapter IV) states that the attribution of taxi service licenses is done through an open
public tendering process, where IMTT-licensed companies or individual entrepreneurs can participate.
The different criteria for this attribution are explicit in the article 19th of this regulation, where the
following factors are considered, by decreasing order of importance and preference:
a) Location of the Social Headquarters is in the Lisbon Municipality;
b) Number of years without having been awarded a license in a tender;
c) Number of years of sector-related activity;
d) Age of the Social Headquarters.
Article 28th (Chapter V) speaks about the mandatory service provision. It states that taxis should be
at the disposal of the general public, in accordance to the parking regime that is attributed to them,
and they cannot refuse service, except when:
45
a) Service requires the circulation on very difficult or inaccessible terrain and/or places where the
driver perceives significant danger to himself, the vehicle or the passengers;
b) Services solicited by people with dangerous-like suspicious behavior.
Article 35th (Chapter VI) states that the monitoring entities, regarding the respect for the regulations
present in this document, are the IMTT, the Lisbon Municipality and the general Police forces.
Finally, article 37th identifies the main fines to be applied in case of failure to comply with the
refereed regulation (offenses) – generally monitored by police - attributes the processing of these
offenses to the Municipality and the application of fines to the Mayor of Lisbon. These infractions and
sanctions are then communicated to the IMTT.
3.2.1.4. Main Stakeholders and bargaining power
When analyzing the spatial, operational, commercial and institutional influence of a taxi stand at
an airport, there are many stakeholders to account for. Taxi services in this context are often viewed
as more than just another road transportation mode. They are the preferred mode of transportation of
many traditional airport passengers and a critical intermodal link that allows the completion of an also
critical last segment of a long trip. Sometimes the taxi stands - important interfaces between air
transport and a fast, door-to-door, comfortable mobility service - are under the direct or indirect
responsibility of more than one institution. This may cause serious problems of coordination and
hierarchy definition, resulting in conflicts over liability, regulatory power, responsibility, funding,
implementation, monitoring, etc. It is important to analyze these several stakeholders and their
perceivable specific interests, because any proposal of policy/regulatory change will impact them in
different ways, to which each will react with proportional determination.
Because of the importance and scope of this service on a city-level context, there are many actors
other than the ones that actually complete the main transaction of this system: the taxi
drivers/companies and the airport passengers/visitors/employees. The third main stakeholder in this
process is the Airport itself, namely the airport authority or the airport manager/operator company,
which is interested in an effective, comfortable and reliable way of offering connectivity to its
passengers. By ensuring good quality of service for taxis at their terminals, the airport is also
improving its capacity to attract customers, to increase interest in its services/commercial concessions
and to improve efficiency in the processing of passenger flows within the terminal itself and at its
curbside. There are many other actors in this context, such as the Municipalities, National Transport
Regulators, Land Transport Competition, Hotels, Police forces, Tourism Associations, etc. All of these
entities and their specific interests will now be analyzed in further detail.
At Portela, there are some aspects that, as mentioned before, are related to the specificity of the
location and market context. Some of the stakeholders might differ from airport to airport according to
the market structure, the importance of the airport, the size of the city and of the taxi service supply,
regulations, etc. In order to clarify this important list of interested parties to this service, the following
stakeholders were identified:
46
Taxi companies, who usually hire or are composed of a collective of taxi drivers, and individual
entrepreneurs (which are often the drivers also), offer an individualized road transportation
service, with customizable choice of destination and route.
Interests: Taxi drivers want to maximize the profit on their service by transporting
passengers going to distant locations, preferably with luggage and, if possible, awarding
generous tips. They also want to minimize the waiting time in queue or “empty time” and be
assured of having customers when it is their time to pick up passengers.
Influence: The bargaining power and influence in the political decision making process of
the taxi sector in Lisbon is, similarly to other cities, perceived as relevant and significant. The
image of taxis blocking the city’s main roads in protest is a politician’s nightmare and
lobbying to stop or delay competition from the Metro at the airport has been frequently
rumored to have been exercised by the taxi sector somewhere in the past.
Inter-stakeholder relationships: The taxi sector, its associations, taxi federation,
companies and drivers are often criticized by passengers, because of alleged low quality of
service and price gauging. ANA, assuming its passengers perspective, also seems to
somewhat agree that quality of service and overall reputation of Lisbon (and Portuguese)
taxi drivers is not what it should be, and thus thinks taxi services at its terminal should be
significantly improved.
Taxi passengers, who are usually deplaning airport passengers, but can also be airport
employees or visitors, solicit transportation services that best adapt to their traditionally high
value-of-time, and thus choose the taxi as the transportation mode to complete their journey.
Interests: Taxi passengers want a reliable, fast, door-to-door and comfortable transportation
mode. They also want taxi drivers to be knowledgeable, friendly and professional, driving
clean, comfortable and safe vehicles. High prices are, of course, always the center of a lot of
complaints, as passengers obviously want to minimize the cost of their trip. Time and
availability is also an important factor for taxi passengers, who wish to minimize the waiting
time in queue and to have an empty taxi, ready to serve them.
Influence: Passengers are always influential in any transportation context, because they
constitute the demand for trips, which generates revenues through tariffs. Airport taxi
passengers are common customers to the airlines, airports, taxi companies and secondary
city businesses such as hotels, museums, shopping malls, etc, thus highly influential, both
with the politicians and the companies that serve them.
Inter-stakeholder relationships: Passengers often complain about taxi drivers, mainly
because of lack of vehicle hygiene and comfort, driver’s friendliness, geographical
knowledge, price gauging and even trip refusals. Recent studies made by the Portuguese
Consumer’s Defense Association (DECO) concluded that there are many taxi drivers at the
Arrivals stand that fool tourists into paying extra fees for trips, among other very serious
47
accusations and behaviors. (Pereira, 2009) This and many other statements made by
customers show that there is a feeling of general distrust between passengers and taxis.
The Airport Manager, in this case, ANA – Aeroportos de Portugal, which is the entity responsible
for the management of the entire airport infrastructure. This company, similarly to many other
airport operators, has concessions to commercial, logistic and service companies within the limits
of the airport, and especially at its terminals.
Interests: As the airport manager and looking at the specific situation of the curbside
operations, this entity wishes to efficiently process passenger flows, promote or offer good
connectivity options to its clients and minimize passenger complaints, which are often
directed at ANA itself, despite its weak intervention power. It also wishes to increase its
influence and participation on the management and planning process of such a critical
curbside service at its own terminal, currently very limited.
Influence: ANA is an important public-owned company, and politically influential, namely at
the central government level. The perception is that this significant influence does not
extend at the same degree to the municipal level, namely with the regulator, the Lisbon
Municipality. This influence also does not seem to extend to the taxi sector.
Inter-stakeholder relationships: There are some conflicts between ANA and the taxi
sector, as seen for example, with the taxi parking issue, which was moved to a different
location by pressure from ANA, some years ago, and caused protests and strikes from the
taxi drivers. ANA is also the target of some criticism from its customers because
passengers sometimes attribute some of the responsibility of bad taxi service to the airport
manager.
The Lisbon Municipality, which, in Portela’s case, is the market regulator for all taxi services
within the administrative limits of Lisbon. It is also responsible, like many other municipalities, for
most of the general urban planning aspects, from land use to transport planning. This includes
the responsibility to plan the location and capacity of all taxi stands, including at the Airport.
Interests: As a major public administration entity at the municipal level, the interests of
Lisbon Municipality are that the general public has access to transportation both in quality
and quantity of options – right to mobility - and that business thrives with responsibility
within city boundaries – economic development. This means that as a regulator of a market
such as the taxi service, it has to balance the rights and duties from agents on both the
supply and demand sides. Politically, satisfying passengers and taxi drivers without
ostracizing too much any of them is the main objective, which will eventually translate into
more votes for the political party in power.
Influence: As the main regulator and planning entity, the Lisbon Municipality’s influence in
the context of this service is naturally very high, although this point is more important to
48
other stakeholders, who pressure the municipality for decisions or interventions in their
favor.
Inter-stakeholder relationships: The Lisbon Municipality has assumed a role of pivoting
and managing of different interests. The weighted combination of those interests and the
alignment with the City’s own interests are always a priority, therefore, the several issues
that may come up should be dealt with diplomacy and a conflict-avoidance attitude. The
Lisbon Municipality is often criticized for having a heavy bureaucratic structure that
sometimes does not allow it to decide and intervene in due time.
Competition, for example, under the form of buses, rent-a-car companies, and in a near future,
the metro, is also a constant presence around Terminal 1, offering alternative mobility services to
airport passengers, based on other market segments and service type preferences.
Interests: All of these alternative modes of transportation are interested in maintaining
and increasing their share of the large flows of the typically high value-of-time passengers
that airlines usually transport. For this they also try to influence the Lisbon Municipality
and government transportation-related entities to allow them to keep or earn the right to
operate and compete with the taxi companies at the airport.
Influence: Carris is a very well-known and influential company in Lisbon’s public
transport context as the main incumbent company for surface transportation in the city. It
has a strong social impact and reputation, as well as strong political leverage. The metro
only recently approved the construction of the expansion of the red line from Oriente to
the airport, despite relative general consensus on its usefulness in the past. It is seen as
a very efficient, reliable and fast transportation mode, and will surely be a very strong
competition for taxis, if Portela is to keep its aeronautical infrastructure after the NAL.
Inter-stakeholder relationships: Not much is known about the real degree of
competition among taxis and other public transportation, but Carris – the main current
competition – has a very close relationship with the Lisbon Municipality and with most
Lisbon citizens. Tourists often travel on Carris as well, although recently, standard Carris
buses have ceased to allow the transport of typical air-travel hand luggage in their
vehicles. Carris is also seen by ANA as a partner for the improvement of curbside
transportation options, but their service quality is currently considered as insufficient, for
the passenger segment that usually travels to and from the airport.
The IMTT (Institute for Mobility and Land Transportation) is the main land transportation
regulator in Portugal. It is responsible for the licensing of transportation activities and service
providers, such as transportation companies or individual entrepreneurs. Its interests are mainly
those of a general transportation regulator such as promoting mobility to people all over the
country within certain quality, safety and price standards. Its influence in the taxi sector in Lisbon,
especially at the airport taxi stand is limited, as this is mostly responsibility of the municipalities. It
49
may have some influence on the licensing requirements of companies and drivers in general, but
it theoretically does not have the power of intervening in specific situations, such as this one.
The Police is, in this case, more than just the traditional main security force at an airport terminal.
It is responsible for the monitoring of the taxi service conditions, from the respect of the driver’s
behavior code to the vehicle’s safety requirements, according to the regulations of both Lisbon
municipality and general road regulations. It represents the main monitoring entity in this process,
although many consider ASAE (Food and Economic Safety Authority) eligible for monitoring
duties as well. The police have also given a significant coordination contribution to the operational
context, by persuading taxi drivers to avoid entering conflicts, resolving disputes and making an
effort to enforce the First-In First-Out discipline, near the passenger queue.
Other economic activities, such as Hotels, Convention Centers, Museums, traditional
commerce, shopping malls, and even business companies also benefit from an efficient and
reliable taxi service at the airport terminal. This is a direct feeder system for hotels and can
indirectly benefit other activities such as tourism and leisure, but also provide quicker connections
for travelling business employees, coming from abroad. Among the secondary interested parties
in a respectable taxi system at Portela is the Lisbon Tourism Association (ATL), a private but
publicly-managed company, which has the function of promoting tourism in Lisbon. The influence
of these entities is not as big as the ones directly involved, but it is, nonetheless, very real.
3.2.1.5. Institutional framework
After defining the main stakeholders involved in this context, it is important to know who is
responsible for which main basic functions, such as regulation, licensing, etc. and if those entities
have the conditions to exercise those roles efficiently and effectively. This last aspect is very important
to understanding the system, namely if the involved agents are prepared to perform these functions in
terms of independence, competence and intervening power. If overlapping of duties exists, this can
also pose a serious problem of coordination and significantly increase bureaucracy. The main roles of
the entities involved in the institutional framework of this system are relatively well defined (Figure 17),
with the exception of the planning process, where there are questions on the degree of participation
that ANA should have on the planning process of the taxi stands at Portela.
The regulator is the Municipality of Lisbon, empowered by law to define market access rules,
licensing requirements for vehicles, allowed service types, numerical limitations on parking regimes
and licenses for taxis, and stand location and general planning. The sharing of the licensing power is
clearly defined, with vehicle registration being the responsibility of the Municipality and the general
driver/company licensing belonging to the IMTT. On a financing perspective, the Lisbon Municipality
seems to be able to maintain good levels of independence from the main actors (passengers, taxis
and airport) and the national transport regulator, IMTT since it does not directly depend on neither of
them.
The main planning entity is also the
ANA. This aspect is important, since it
of inadequate planning or slow interven
This is in fact assumed by ANA as one
able to have a much faster and sig
operation of taxis at the curbside of its
The conceding entity is the Lisbon
service, taxi companies and drivers,
transport operators. ANA does not col
fees the City collects from taxi drivers
values for the valid licensing period of
The supervising and monitoring a
Municipality of Lisbon, who processe
overarching entity, which registers the
relevant behaviors of taxi drivers servi
end of the journey. This is usually
exchanged on account of provided ser
should this transaction be manipulated
accused of price gauging to extract gre
Figure 17 – Institutional
3.2.1.6. Overview sum
After the systematic analysis of the
at Lisbon Airport, it may be useful to
the perspective of the three basic elem
Regulator
Licensing Entity
Planning Entity
Conceding Entity
Operator(s)
50
the Lisbon Municipality, with the participation and co
it is mainly the airport manager who will suffer the d
entions from the Lisbon Municipality on the taxi stand
ne of the major downsides of the current framework. I
ignificant participation in the management and pla
ts Terminal.
n Municipality, which opens the taxi stands to the ope
, which are financially independent also, unlike
ollect any rents from this concession and the taxes
rs are not enforced by passenger or trip, but rather
f time.
authorities are mainly police, on a more operation
es the witnessed offenses to regulations and the
ese offenses at a central level. Currently it is not ea
ving at the airport, in the most critical segment of the
ly the moment when the transaction is made, an
ervice and only with some luck will there be a police
ted. This is also where most complaints focus, with
reater profits from gullible tourists and out-of-town pa
al framework regarding Portela’s taxi service system
ummary
e regulatory and institutional framework of the airpor
o summarize the main factors that might generate d
ments of transport policy: equity, sustainability and e
Passenger
ss
Lisbon City Municipalit
IMTT – Institute for Mobili
Land Transportation and Li
Municipality (vehicles)
Planning Department of
Lisbon City Municipality a
ANA – Aeroportos de Port
Lisbon City Municipalit
Licensed individual drivers
Lisbon Taxi companies
collaboration of
direct impacts
nds at Portela.
. It wants to be
lanning of the
perators of the
e many public
s and licensing
r through fixed
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e IMTT, as an
asy to monitor
he taxi trip: the
and money is
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h drivers being
passengers.
ort taxi service
discussion on
efficiency.
pality
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51
There is an open system-like arrangement at Lisbon airport for taxis wanting to solicit service at
Terminal 1’s stands. This system has only two main basic restrictions, besides the mandatory IMTT
professional licensing of companies and drivers: the taxis that want to service the airport must be
Lisbon-registered, licensed vehicles and the maximum number of taxis serving any taxi stand is limited
to the corresponding parking regime (street hail or dispatch service) and spaces available. There is
also a global numerical limit to the contingent serving the municipal area of Lisbon. Thus, Lisbon’s
system can be qualified as Type C in Schaller’s classification of taxi regulatory systems (Figure 18).
Figure 18 - Schematic classification of taxicab regulatory systems (Schaller, 2007) – Lisbon case, in blue
This system has promoted sufficient demand for the airport and simultaneously ensured relatively
balanced taxi services in the city. The restriction to the parking capacity is an important measure to
avoid oversupply at certain stands and the open nature of the access to the airport stand also serves
to politically balance the taxi sector, creating competition and equal access rights. The fact that
demand is relatively stable at Portela - being the main airport in Portugal and Lisbon, and slowly
growing in annual traffic flows – also allows for this system to keep providing reasonably steady
results in terms of service request. It is seen by taxi drivers as a profitable and reliable market, for
which they are willing to wait several hours to enter. Although prices are set for the whole municipality
and taxi drivers and companies have little incentive to innovate or improve on regular service, there is
room for alternative service types and exploitation of different market segments.
The secondary taxi queue in front of Portela’s Departures Hall has been target to some criticism on
behalf of some of the traditional Arrivals taxi drivers, on account of the less waiting times in queue of
their colleagues and the possible demand-reducing effect that this has on the Arrivals stand,
prolonging their own waiting time for service. The existence of this stand can be seen as a diminishing
element of equity and efficiency, at first glance and based on some of these claims. But is just one
stand really better than two? Without more data on this second stand, it’s hard to be definite in taking
conclusions, but there are some system behaviors that might give a clue on what the answer might be.
If viewed from a homogenous service type perspective, one of the stands seems to be taking a
share of the other’s demand, basically competing against each other, but the long and persistent
queuing at the Arrivals seems to show, especially at peak times, that waiting times for taxis at the
Arrivals are more related to the service area configuration than to lack of demand. Since both stands
show similar behavior during the day and the Departures stand has about 25% of the Arrivals demand
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(as we will see further ahead), transferring this demand would not significantly speed up the service at
the Arrivals, only increase the size of queues of passengers, which would take longer to serve. As a
whole, and looking from an efficiency point of view, closing down the Departures stand would probably
lead to the substantial increase of peak-hour passenger traffic at the Arrivals, while also increasing the
in-queue waiting time for passengers. This would allow for additional demand to exist, so more taxis at
the Arrivals would be serving, but it would be at the expense of the waiting time for passengers.
Equity is also questioned, but in the author’s opinion, with unfounded arguments. There is no real
restriction on where and when a taxi driver can park, waiting for service, other than driving a Lisbon
licensed taxi and having a free parking space at the waiting area. This means that the market’s
alleged hotspots, such as the Departure Stand, are accessible to everyone, everywhere, just as long
as they get there first, and the decision to wait more at the airport than in any other city taxi stand is
entirely up to the drivers, based on their own business perspective. Another key element to disarm this
claim is that the Departures stand is, based on the perception from many of the gathered opinions,
relatively unknown to most airport passengers. This means that there is a good possibility that a big
share of the demand at the Departures stand is based on the market segments that are more
familiarized with the airport, namely airport employees and frequent Lisbon Airport passengers, such
as businessmen and Lisbon citizens. These experienced passengers are arguably less lucrative than
the Arrivals clients, because they usually have little to no luggage, are probably travelling to nearby
destinations, such as the city center (business) and Lisbon suburbs (returning home), and some of
them are known by taxi drivers to be traditionally less generous on the tip, unlike occasional tourists.
Sustainability of the service and current regulatory and institutional design is threatened by the
certain future introduction of extra land transport competition for airport passengers, namely the Metro,
which is due to begin operation in December 2010 (source: Metropolitano de Lisboa). This is
somewhat offset by the fact that a new airport is going to be built, with the inauguration date foreseen
for 2017, which means Portela will receive less passengers (if any at all) and the taxi companies will
transfer their business focus to the new airport, avoiding this competition.
Regarding regulation and taking into account the usual complaints about price gauging, lack of
driver friendliness, professionalism and hygiene made by airport passengers, stronger and more
persuasive monitoring and penalty systems should be implemented. Recently, sector-related
associations have met to discuss possible changes to the airport service system, namely to improve
the image tourists and Lisbon citizens have of the taxi service in Portugal. Some of these changes are
focused on the creation of a local monitoring commission, formed by ANA and the taxi associations, in
order to better manage and control the stands at Portela and quickly resolve conflicts and other
issues. These proposals are still currently under review by state and municipal entities.
ANA wishes to be an active and influential actor in the planning of the airport stands, not only on a
spatial perspective, as to how the stand interacts with the other Terminal functions, but also on the
flexibility of the service to handle peak-hour passenger traffic, the stand size and mechanisms by
which taxis pick up passengers, interaction with police and taxi drivers, etc. It also argues it should
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have more intervention power when certain changes are justified by low quality of service conditions.
Waiting for the Lisbon Municipality to listen and to act might cause significant nuisance to ANA as an
airport operator, responsible for maintaining efficient curbside operations.
The taxi drivers and companies usually do not have an easy relationship with customers, in the
sense that general mistrust is installed on account of certain past and recurrent behaviors and
problems. ANA mostly takes the passenger perspective as their own, looking at current taxi services
as insufficient and problematic, mainly because it is one of the main recipients of complaints made by
airport passengers. The Lisbon Municipality is considered to be a highly bureaucratic entity, with a
very heavy institutional structure, which often slows the decision making process and blocks
immediate changes. Although this is recognized as a problem, mainly by ANA, the Municipality’s role
of regulator is not questioned, as this responsibility is, by law, theirs to bear.
The taxi stands are made accessible for operation by the Lisbon Municipality to all licensed drivers
and companies who wish to service the Lisbon area - ANA does not collect rents from the taxi
companies and drivers. This means that every taxi stand is under the direct responsibility of the
municipality, including the special airport taxi stand. Inefficiencies and lack of perspective may emerge
from this situation because a large, bureaucratic and multi-function entity, in charge of managing and
planning of dozens of taxi stands might not pay sufficient attention the specificity of the airport stand.
There are several aspects about Portela’s taxi stands that differ from those of regular stands
downtown, and “normalizing” these stands can be very prejudicial to the system.
One very important actor in this context is the Police, which has mainly been seen as a security
force, at airports. In Portela’s case, the Police forces are also in charge of coordinating the taxis
towards their service spots, at the Arrival stands. They persuade taxi drivers to avoid conflicts and
respect the first-in first-out regime, integrated in every taxi stand in Lisbon. This role could arguably be
performed by another entity, one which could be internalized into ANA’s structure with a strong taxi
association contribution or even co-management, releasing the Police for more important duties.
3.2.2. Operational Context
After looking at the institutional and regulatory context, a closer look at the operational mechanisms
is necessary, to be able to better sustain the arguments for possible changes and base new proposals
on concrete quantitative data and measurable impacts. The study of the operational context is based
on the several steps of the methodology presented in Chapter 2:
1. Identification of the problem of queuing at Airport Taxi Stands ;
2. Literature review and general queuing theory research ;
3. Identification of a suitable and real case-study ;
4. Preliminary in situ observations of system behavior ;
5. Elaboration of a Data Collection Plan ;
6. Test data collection procedures ;
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7. Collect relevant data ;
8. Compile and analyze the collected data ;
9. Build basic queuing simulation model ;
10. Test and validate the basic simulation model based on the collected data ;
11. Perform scenario building and testing ;
12. Results analysis and conclusions.
Some of these steps have already been inherently addressed at specific points throughout this
document, integrated in the framework definition of the problem and in the research effort that
preceded this more detailed analysis on the subject. Step 1 - Identification of the problem of queuing
at Airport Taxi Stands, has been discussed both on the regulatory and operational perspectives in
Sections 2.1.1 and 2.2.1 of Chapter 2, immediately before the methodology sequence proposals. Step
2 - Literature review and general queuing theory research, is present in Chapter 1, where some
important bibliographical sources are reviewed as the basis for the theoretical background and on the
state-of-the-art of this subject. Step 3 - Identification of a suitable and real case-study is addressed in
the introductory section of this Chapter, where the main reasons for choosing Portela as the focus of
analysis are presented and justified. Steps 4 through 7, related to the data collection procedures were
also subject of detailed analysis in the Field Data Collection Plan, present in Section 2.2.3 of Chapter
2. The analysis of this topic is therefore developed from Step 8 - Compile and analyze the collected
data onwards, preceded by a spatial description of the system, for contextualization.
3.2.2.1. Spatial description of the system
As mentioned earlier, Terminal 1 has not one, but two taxi stands, which for a terminal of its size,
can be strange to most foreign – and also many domestic - passengers, who normally have no
information on the existence of this secondary taxi stand. This stand is located on the lateral side of
the Terminal, in front of the Departures entrance (see Figure 19). This taxi stand, according to a study
by ANA, in 2006, during Easter week, has about 25% of the demand registered at the Arrivals Taxi
Stand and a lower average occupancy rate of 1,69 passengers/taxi, compared to the 2,06
passengers/taxi at the Arrivals. This study, conducted in order to determine the operational needs in
terms of space and taxi numbers, also shows similar distribution of passenger demand during the day.
This taxi stand is known to serve mainly airport/airline employees and the few people who know of its
existence and regularly use the airport. This secondary supply point has been a topic of discussion
and some turmoil among some taxi drivers, related to fairness of competing for the same type and
source of passengers, while having to wait less time in queue.
Initially, this secondary stand was considered as a possible case study, parallel to the Arrivals
stand, which is clearly the most relevant and problematic, in terms of queuing lengths and waiting
times. The time and resources needed for the field data collection and the effort involved in analyzing
this data, coupled with the need - and choice - to do a more in-depth analysis on the Arrivals stand
lead to a less detailed analysis of the operational characteristics of this stand. Regardless of not
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focusing on its specific system mechanics, its influence and impacts on global taxi service at the
terminal are still considered in a wider context.
The taxi stand for the Arrivals has also been subject to measurements in 2006, included in the
previously referred ANA study. This study concluded that about 30% of the deplaning passengers
used the taxi service, an average of 87 taxis/hour were present and the maximum solicitations
occurred at peak hours during the morning (9-11 a.m.), afternoon (3-5 p.m.) and night (10-11 p.m.).
This stand will be the main focus of analysis due to its size and relevance on Terminal 1’s curbside
operations context and due to the well known problems of excessive queuing, price gauging, trip
refusals and other related complaints usually made by taxi passengers, at Lisbon Airport. This stand
processed, on Easter week of 2006, a total of about 22.500 passengers, with an average of
approximately 3.200 passengers/day and 180 passengers/hour.
Finally, there is an exclusive taxi parking lot, free of charge, built in 2003, about fifty meters from
the Terminal, where taxis form long queues waiting for service at the main Arrivals stand. It has a
capacity for about 150 to 200 taxis, a leisure/waiting room, food and drink machines, bathrooms and a
security system, ensured by police. This capacity plus the maximum queue length from the parking
facility to the Terminal restricts the number of taxis that can serve the airport at any given moment.
Initially taxis waited for service at P1, a large parking facility located next to the Arrivals Stand. This
transfer to the new parking lot was faced, at the time, with protests and even strikes by the taxi drivers.
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