Why Does Airport Pickup Cost More?

(Photo: Alquiler de Coches)

(Photo: Alquiler de Coches)

We are arranging a car to take us from our flat to Heathrow Airport early Saturday morning, then return us on Monday evening.  The price going to the airport is ₤28, the price returning is ₤38.  Why the difference?

One possibility is cost-based price discrimination: the driver may have to wait at Heathrow, since the plane and retrieving our baggage may be delayed.  Another is that the prices are set to match the differential set by metered taxis to reflect waiting time for fares at Heathrow (although I would think that competition among car services would eliminate that differential).  I don’t see how this differential could arise from demand-based price discrimination; and neither of the other explanations seems very satisfying.

(HT: DA)

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  1. Deviant Ollam says:

    Interestingly, here in Philadelphia the city has a “flat fare” option of $28 (you are free to ask the driver to go by the meter instead if you wish) and that price applies either to or from the airport.

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  2. Jim says:

    Some cities impose a surcharge (i.e., tax) on livery services for pickups at the airport. They can’t effectively charge it going TO the airport because many pickups are not within the city limits. By imposing it at the airport, they can charge both city residents and suburbanites, but they would not want the bad public image associated with charging only city residents for the trip to the airport. Also, since many area residents get dropped off or picked up by friends/family, they are effectively externalizing their tax because it will be paid disproportionately by tourists.

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    • Nathaniel Senff says:

      I came here to say the same thing

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    • meanonsunday says:

      Correct although that is probably only a partial explanation; the pickup charge at Heathrow is ₤2.60 unless they increased it recently. If they catch you trying to pick up in the drop off area it’s a ₤40 fine.

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  3. robbert-john says:

    Normally an airport is away from the city and isolated, therefore it’s a destination for the drivers that doesn’t provide any work other than there. it’s a risk they take, that has to be rewarded. At least that’s my opinion

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  4. mark says:

    This doesn’t really answer the question, but any time I’ve gone to an airport (Los Angeles Intl or the smaller Ontario airport), the price to and from has been identical.

    Perhaps this is a regional/country-specific occurrence?

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  5. Mark says:

    It might be partially explained by the fact that the cab will certainly find its next fare seconds after dropping you off at the airport, while its prospects for getting a new fare after dropping you off at home are uncertain.

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    • Chocolate seller says:

      +1

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    • Stewarth99 says:

      At London airports, non-airport cabs can only pick up if they are booked.
      They cannot sit on the rank and pick up.
      Makes sense really. I can imagine a cab from here (Dorset) picking up at the rank and ending up in Essex

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  6. Roger Wade says:

    I don’t know specifically about London, but airport taxi surcharges are very common all around the world. The taxi company has to pay a fee for picking someone up at the airport, but not for dropping someone off. Still, I’ve never seen an airport tax this high (although UK airport taxes on airline tickets are also among the highest in the world).

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  7. Chicago says:

    Here in Chicago, cab rates are an extra $2.00, for all trips to and from the airport. Interestingly, train rides from the airport incur an extra charge as well (I think it’s $5.00) unless you are an employee. I imagine they would charge extra for going to the airport as well if they had the technology (Chicago currently does not make you swipe transit card on exit).

    Also, anecdotal evidence for demand imbalances between going to or from the airport. My case might be different, but I always take the train to the airport and 90% of the time take a cab back. The reason for this is that I usually fly out in the evening after work, and so it’s more convenient for me to take the train; the train is faster than cab during rush hour; and also it’s an excuse to leave work well in advance of the flight. On the way back, I usually land at odd, non-traffic-jammed times, and I just want to get home as quickly as I can with minimal effort — don’t really want to deal with switching trains. So then I’m willing to pay the extra $$ for the cab just to get home after a tiresome trip.

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  8. Michael Risch says:

    There could just be airport departure taxes.

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