As airline baggage fees cause travelers to pack less and wheeled suitcases reduce the need for luggage carts, Smarte Carte is set to get lower rent in a new contract at the Atlanta airport.
Luggage cart company Smarte Carte used to pay Hartsfield-Jackson International minimum rent of $238,000 annually.
But in 2012, the city reduced the minimum rent to $100,000, acknowledging that “revenue for baggage services has been in steady decline over recent years due to airline policies.”
It’s one of a number of areas where airport revenue is declining or at risk of shrinking as technology reduces the need for some services. The airport has seen declines in contracts for pay phones and ATMs, as people increasingly depend on cell phones, credit cards and online banking.
Airports are also wary of a decline in parking revenue over time, as more travelers use Uber and Lyft to get to the airport and with the prospect of self-driving cars reducing the need to park at the airport.
In 2017, as Smarte Carte’s contract was nearing expiration, the airport started a contracting process for a new luggage cart deal.
Smarte Carte was the only company that threw its hat into the ring, but proposed less than the minimum $100,000 required based on its revenue from the $5 fee per cart. So its proposal was disqualified and the airport rebid the contract last year with revised requirements.
Again, Smarte Carte was the only company to compete for the contract.
This time, Smarte Carte proposed to pay a minimum of $87,000 annually, according to a legislative summary submitted to city council -- and the airport accepted the offer.
While the previous contracting process required the company to provide 1,000 new luggage carts, the new one called for 900 luggage carts to be deployed.
The Atlanta City Council transportation committee voted Wednesday in favor of a five-year contract with Smarte Carte with an option for a five-year renewal term. It now goes to the full council for approval.
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