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A Port of Seattle audit revealed that Seattle Yellow Cab reported “inaccurate and incomplete” receipts for trips originating from Seattle-Tacoma International Airport for the past four years.

Back in 2010, Puget Sound Dispatch — which does business as Seattle Yellow Cab — inked a five-year contract with the Port for the right to pickup arriving passengers at the airport. Given this, no other taxi companies, including Uber (with its uberX service) and Lyft, were allowed to do so.

Photo via Seattle Yellow Cab.
Photo via Seattle Yellow Cab.

Yellow Cab, which operates Seattle’s largest taxi fleet, was required to pay a minimum of $3.67 million or 13 percent of its annual gross revenues from airport pick-ups to the Port each year of the contract.

The company was instructed to calculate “gross receipts” by multiplying their outbound trip count by the average fare. However, the audit found that the company did not provide accurate receipt information to the Port from November 2011 to August 2015. Specifically, there are no records to support the average fare estimation and there is incomplete information for exact outbound trip count.

The Port also admitted that it did not have adequate management monitoring systems in place.

“Management monitoring controls over the Puget Sound Dispatch Concession Agreement were/are not adequate to ensure accurate and complete reporting of Concession Fees,” the Port wrote in a briefing. “Although PSD mathematically calculated Concession Fees properly and submitted the information timely, PSD-reported Concession Fees were not complete or accurate. Additionally, PSD did not comply with the record retention requirements in the Agreement.”

A Port spokesperson told GeekWire that the audit shows how Yellow Cab’s revenue actually exceeded the minimum annual guarantee for the last two years of the agreement due to increased passenger traffic, but the company did not “accurately document” this. Port officials estimate the unpaid amount to be $880,000 and Yellow Cab has proposed a settlement agreement to pay that to the Port by Jan. 31, the spokesperson said. 

Here’s a statement from Yellow Cab:

At the time the contract began, in 2010, neither PSD nor SeaTac had a fully accurate way to do a full accounting of the trips made. Reports of trips we delivered by paper. Both parties have now made tremendous advances in systems and technology that will allow for a more precise accounting.

PSD takes full responsibility for our piece of this contract and has always paid its invoices on time and in full. PSD will pay any moneys owed the Port in full. PSD did not directly benefit and will not financially benefit from the errors. Our drivers directly benefited from the uptick in Sea-Tac Airport traffic. PSD collects a flat administrative fee each week from drivers, and it has not been raised in several years.

Puget Sound Dispatch would like to thank the Port of Seattle for its professionalism in sorting through issues related to the audit of the airport taxi concession agreement and operation. The auditor spent many hours with our records and staff, including our General Manager, Amin Shifow. The auditor interviewed management, accounting personnel, and the owner/drivers themselves.

The audit, which you can view here, is relevant to Uber and Lyft given that the Port is still figuring out how to allow these transportation network companies (TNCs) to conduct pick-ups at Sea-Tac. Topics yet to be agreed upon between the TNCs and the Port include the per trip fee TNCs will pay the Port; location of TNC pick-up areas; and an environmental requirements for TNC vehicles.

The Port also wants to ensure that Uber and Lyft will be able to share their trip data.

Photo via uberX.
Photo via uberX.

“TNC operating agreements will include stringent terms that require specific methods for the reporting of operational activity with frequent auditing,” notes a memo sent from Aviation Operations to Port of Seattle CEO Ted Fick on Nov. 30.

The Port met in MaySeptember, and December to discuss changes that would allow Uber and Lyft at the airport, but the ban still remains in place today as it develops new rules and also crafts a request-for-proposal for the new exclusive for-hire contracts. The Commission hinted that TNC pick-ups would be approved this past summer, but delayed any final decision.

Before taking RFPs on a new contract — either from Yellow Cab or other for-hire transportation companies — the Port wants to see how TNC pick-ups will affect demand and supply. The contract with Yellow Cab expired in October and the Port is signing month-to-month agreements with the company in the meantime.

The Port will discuss the audit at a meeting today.

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