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             California Public Utilities Commission
505 Van Ness Avenue, Room 5301            San Francisco, CA 94102
CONTACT: Dianne Dienstein           September 20, 1996  CPUC - 74
         415-703-2423                               (A.95-06-015)

  CPUC APPROVES SUPERSHUTTLE/SACRAMENTO AIRPORT AGREEMENT BUT
           REVOKES SUPERSHUTTLE ZONE OF RATE FREEDOM

    The California Public Utilities Commission (CPUC) today
granted SuperShuttle permanent authority to provide service
between Sacramento International Airport (SIA) and all points in
the surrounding 10 counties.  The Airport has an agreement with
SuperShuttle allowing the company to be the sole airport shuttle
provider for passengers who have not made advance arrangements
with another shuttle.
    However, the Commission revoked authority it gave
SuperShuttle to change rates, without Commission approval, within
a specified rate range or 'zone of rate freedom' contending the
company does not have sufficient competition to justify retaining
rate flexibility.
    State law allows airports to enter into exclusive contracts
for airport shuttle services and to govern shuttle operations on
airport premises.  The Commission, however, retains authority
over licensing, fares, and regulation of airport shuttles on
public roads and property to ensure public safety, public
convenience, and quality of service.  The Commission can deny or
revoke operating authority of any airport shuttle service with an
exclusive airport contract if that company does not have
sufficient technical capabilities or financial resources, or is
otherwise judged unfit to serve the public - and this would
prevent an unfit company from operating outside of an airport
regardless of airport approval for it to operate on airport
property.
    The Commission will work with airports entering into
exclusive ground transportation contracts to monitor shuttle
                            - more -
operations to make sure neither public safety nor quality of
service is compromised.
    The fact that the Airport made the exclusive agreement with
SuperShuttle would appear to conflict with Commission policy to
encourage competition to produce the best rates and service for
consumers.  State law, however, supports this exclusive contract
for the same reason - to ensure good service.  The SIA/
SuperShuttle agreement includes standards of service relating to
safety and the maximum time passengers wait for transportation
which SuperShuttle must continue to meet to maintain the
agreement.  The Commission granted permanent operating authority
to SuperShuttle in this instance because it found the company fit
to provide the service called for in the SIA contract, and found
the contract designed to improve passenger transportation between
the Airport and surrounding counties and thus consistent with
both state law and Commission policy.
    Because SuperShuttle's rates are generally higher than it
previously charged, suggesting that diminished competition as a
result of its exclusive contract with the Airport enables it to
charge higher rates than it would if it faced more competition
from other airport shuttle companies, the Commission revoked the
company's zone of rate freedom.  The impact on SuperShuttle of
revoking this rate flexibility should be minimal because the
company has stated it has no plans to raise rates.  If
SuperShuttle does decide to make rate changes, it must first
obtain Commission approval of them.


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