Dynamic pricing, frequent parking programs coming to O’Hare Airport

The days of searching O’Hare Airport’s main parking garage and remote lots for an elusive space may finally be coming to an end — at least for those motorists willing to pay a premium price.

Mayor Rahm Emanuel’s administration has issued a “request for proposals” (RFP) for the management and operation of public parking and ground transportation at O’Hare that raises the specter of higher prices for better service.

Interested bidders for the ten-year contract were asked to present a plan to “maximize revenues” that includes the use of “dynamic pricing, frequent-parking programs, cross-promotional initiatives and additional services” to entice motorists to park at O’Hare instead of choosing cheaper, off-site garages operated by Inter-Park and Wally Parking.

Sources said the RFP is expected to generate “a variety of different business models” to drive “higher usage rates.” That includes using “new technology through an app” or “dynamic pricing models” to improve parking lot utilization rates and revenue.

“Dynamic pricing models are just one example of a strategy for attracting additional customers who otherwise may not pay to use airport lots, and to incentive use on the weekends,” the source said.

The ten-year contract will have an “expanded scope to match the increased services and traffic” expected to be generated by a multi-modal facility scheduled to open this fall.

The Department of Aviation plans to purchase fourteen “green/environmentally-friendly buses to provide shuttle service to two economy parking lots, as well as the new multi-modal facility” at the new consolidated rental car campus.

“The scope of this latest RFP reflects both the addition of 2,400 parking spots at the new integrated transit center, including the busing, maintenance and other services required to operate it,” Aviation Department spokesperson Lauren Huffman wrote in an email.

“It is our goal…to make all of our ground transportation facilities more efficient and easily accessible for passengers traveling through O’Hare.”

O’Hare currently has 21,319 revenue-generating parking spaces, 9,302 of them at an indoor parking garage located in the terminal core.

The rest of the spaces are located in surface lots. An additional 2,676 indoor garage spaces are under construction at the consolidated rental car campus.

The inter-modal facility – served by an extension of the O’Hare people mover system – is expected to ease congestion in the terminal core by eliminating an estimated 1.3 million vehicle trips each year.

For decades, O’Hare parking and ground transportation has been the exclusive purview of Standard Parking. The company has received $360 million in city contracts since 2002, $53.2 million of it since 2013.

Three years ago, the City Council slapped a tax of “not less than ten percent of gross revenues” on parking companies that have set up shop just outside O’Hare – in some cases outside the city to avoid the city’s parking tax.

Without an “airport access agreement” that includes the ten percent fee, off-airport parking service providers were no longer permitted to use airport roadways and facilities to pick up drop off and service passengers.

For air travelers and loved ones who chose to pay more for the convenience of parking on the grounds of O’Hare, the ordinance authorized a “parking reservation program” with a fee of no less than “$10-per-day plus applicable taxes” in addition to parking rates.

Aviation Commissioner Ginger Evans was further authorized to establish an incentive-laden “frequent parker program” that went beyond valet services to include car washing, detailing and “light maintenance services” for business travelers and frequent fliers.

It’s not clear whether any of those services have ever been offered. But there’s more coming in the new parking contract.

The reservation system and dynamic pricing programs have the potential to alleviate an O’Hare parking crunch that has been known to close the world’s largest parking garage during busy, mid-week travel days.

The winning bidder must also manage traffic, oversee taxicab staging areas and supply at least a dozen cab “starters” whose primary responsibility is to collect “airport departure tax stamps from commercial vehicles” that move through the terminal core.

The contractor is further charged with staffing and maintaining O’Hare’s “license plate inventory system.”

The system captures plate images upon entry and exit and cross-checks those images with the revenue control system. It’s used to prevent fraud, locate lost vehicles and help city crews identify vehicles belonging to scofflaws parked at O’Hare so the Denver boot can be applied.

Standard Parking has made $201,718 in political contributions in recent years. That includes $21,500 to political funds controlled by Ald. Edward Burke (14th), chairman of the City Council’s Finance Committee.