DENVER – Denver International Airport needs to improve management of parking operations and oversight of transportation companies Uber and Lyft, according to a new audit released today from Denver Auditor Timothy M. O’Brien, CPA.
Auditor O’Brien’s staff found that the airport’s Parking and Transportation System’s lax oversight of public and employee parking, off-airport parking and of general ground transportation operations — which includes revenue agreements with Uber and Lyft — could mean lost revenue for the airport.
“Parking is a huge source of revenue for the airport, and it’s important to manage such a significant revenue stream with strong controls and diligent contract oversight,” Auditor O’Brien said. “Lax checks on enforcement could lead to significant losses for the airport.”
Parking revenue is the second largest revenue source for the airport. In 2016, the airport generated more than $187 million from public parking, employee parking and ground transportation.
According to the audit, under the current system, ground transportation companies such as Uber and Lyft pay monthly fees to the airport based on ride volume. The number of rides is self-reported by the companies. So far, the airport has been unable to use the same electronic tag system in place for other commercial vehicles due to the nature of the ride-sharing industry.
The audit team found airport staff do not verify the accuracy of Uber and Lyft’s self-reported revenue data. Compliance is poorly enforced and therefore, results in a risk of underreporting revenue.
Denver’s airport was one of the first in the country to issue a permit to Uber and later Lyft to allow drop-off and pickup of passengers at specified areas. However, the audit team found the airport has now fallen behind other cities in establishing controls around the collection of fees from Uber and Lyft.
San Francisco and Atlanta’s airports have both started using new tracking systems to verify monthly ride data. In San Francisco, airport officials collected more than $150,000 in additional payments in the first eight months after implementing a tracking system. Airport officials in San Francisco used the tracking system to identify underreporting on nine of 24 monthly reports and underreporting on 39,000 trips.
The risk of unreported transactions and underpaid fees is growing rapidly as the use of Uber and Lyft increases.
Based on the audit team’s assessment, Denver’s airport has failed to prioritize the risk related to unreported Lyft and Uber rides. As a result, Auditor O’Brien recommends the implementation of a tracking system to verify revenue reported by transportation network companies Uber and Lyft. The airport agrees with this recommendation.
The audit also found Denver’s airport does not provide sufficient oversight or management of the airport’s public parking operations. The audit team found several areas where the company operating public parking was not in compliance with its contract and airport officials did not detect the errors. These areas are included in the terms of the agreement covering contractor reimbursements, staffing requirements, budget submittals, employee leave accruals, recordkeeping and documentation, and quarterly incentive awards.
Also, the parking contractor does not ensure daily inspections of parking ticket issuance machines, which are supposed to be checked three times a day.
The audit team also found weaknesses in tracking employee parking, which could be reducing available parking spots and related revenue from travelers. The airport does not have accurate records of employee parking lot assignments. Our audit work also found some employees were breaking rules and parking in paid garage spaces, with some owing between $25 and $2,880 in parking fees. The total amount owed from employees through random audits from 2014 to 2017 for parking in paid spaces was more than $38,000.
“While these totals might be a drop in the bucket for the airport’s overall budget, they are evidence of a bigger problem with sloppy controls and enforcement throughout the parking and transportation systems,” Auditor O’Brien said.
The audit team made 26 recommendations and the agency agreed to implement all but one. Auditor O’Brien hopes the identification of flaws will help tighten up operations and reduce the potential for lost revenue.
“Denver does not track Uber and Lyft rides, opening risk, Denver auditor warns” – Denver Post – February 15, 2018
“DIA Could Be Missing Out on Uber, Lyft Revenue” – CBS 4 Denver – February 15, 2018