Landlords and Ridesharing Companies Pursue Synergies

Expect to see more partnerships between ridesharing companies and shopping center landlords. In the past, these parties have teamed up to promote discounted or free rides, often during the holiday season or for special events — but only temporarily. Today they are entering into longer-lasting agreements for designated drop-off and pickup locations, typically highly visible through signage. And they are offering riders promotions or discounts as well as introducing lounges and driver hubs into the properties.

Vestar provides an outdoor rideshare drop-off and pickup lounge at its 1 million-square-foot District at Tustin Legacy, in Southern California

These arrangements frequently provide landlords with revenue, and the partners expect to explore additional marketing opportunities and synergies to leverage one another’s brands. For shopping center landlords, the appeal includes providing better service and tracking the percentage of shoppers who use ridesharing services.

In December Toronto-based Cadillac Fairview and Lyft formed just such an arrangement at the 1.2 million-square-foot CF Toronto Eaton Centre, which is undergoing a $500 million redevelopment. The partnership establishes a dedicated pickup and drop-off zone. The venture also furnishes an enhanced Lyft app and some special offers for Lyft riders traveling to and from the center. But the partners say they hope these innovations will be merely a beginning. Ridesharing services bring hundreds of customers to the mall each day, and that number is growing, says Craig Flannagan, vice president of marketing at Toronto-based Cadillac Fairview, which owns and manages a $30 billion retail portfolio across North America, Brazil and Colombia. “This is an area that’s evolving quickly, so we wanted to take an approach that not only allowed us to act fast, but to also test different ideas to see how we can help each other’s brands,” said Flannagan. “From the first conversation we had with Lyft, we could see that our interests were aligned and that we were really focused on elevating experience and experimenting.”

Tempe (Ariz.) Marketplace

Similarly, Phoenix-based retail-and-entertainment destination developer Vestar, which owns and manages roughly 30 million square feet across the Southwest and the West, worked with Lyft late last year. That venture has established about 60 “pinned” drop-off and pickup locations that appear on the Lyft app, spread between two properties in Arizona: the 1.2 million-square-foot Desert Ridge Marketplace, in Phoenix, and the 1.3 million-square-foot Tempe Marketplace.

Among other provisions, the agreement provides for Vestar to share in Lyft ride revenues and to provide promotional rates to or from the properties, says Rachel Forman, Vestar’s vice president of marketing. As the program moves forward, Forman says, she anticipates receiving rider traffic counts and information about where shoppers are requesting to be dropped off or picked up. “It’s very new but has been very successful,” she said. “The pinned locations just make ridesharing so much easier for our customers.”

As the ridesharing companies have grown, it is perhaps only natural that they would connect to local land users, says David Fields, a board member of the American Planning Association, a Chicago-based organization that advocates for “great communities.” Fields suggests that these “transportation network companies” (TNCs, in the parlance) will continue to influence the way people travel to and from all commercial properties.

“We’re seeing a big shift to people using TNCs all across the country,” said Fields, who is a principal at transportation-systems developer Nelson\Nygaard Consulting Associates, in San Francisco. “People are more interested in paying to be dropped off at the curb and not having to deal with their own car or deal with parking. So the conversation is shifting to how best to access that curb.”

Cognizant of this trend, many shopping center owners are focused on accommodating Uber and Lyft riders, particularly given the potential for additional income. In some cases these efforts are part of fledgling strategies to address a growing number of transportation choices that are either available to consumers today or are expected sometime within the next few years, including autonomous vehicles and driverless cars.

While declining to share specific deal economics, Santa Monica, Calif.–based regional mall landlord Macerich, which owns some 52 million square feet in the U.S., noted in a statement that competition among ridesharing companies had served to heighten interest in its own properties. “We have structured deals with rideshare companies in multiple ways, including monthly rent and revenue sharing,” said Macerich, which has a mix of designated drop-off and pickup zones or pinned locations at several of its centers. “Some deals include the opportunity to offer shoppers our rideshare promo codes.”

Macerich also realizes that ridesharing and other crowd-sourcing apps have become a part of everyday life for its shoppers, so the firm wants to make its properties more accessible, according to the written statement.

Meanwhile, Unibail-Rodamco-Westfield launched a partnership with Uber in late 2017, and about 30 of its centers in the U.S. now have as many as 10 pinned pickup and drop-off locations, according to a company statement. And last fall Uber introduced its Uber Lounge at the 1.3 million-square-foot Westfield Century City, in Los Angeles. The lounge provides waiting riders with “sleek seating” and other amenities. Marketing promotions between the partners are becoming more common too, including special vouchers that give Century City shoppers a complimentary roundtrip to and from the Uber Lounge.

Uber’s initiatives go beyond merely working with retail landlords, however. Last year the company opened the 8,200-square-foot Greenlight Hub, at Cedar Realty Trust’s 150,000-square-foot East River Park shopping center, in  Washington, D.C.’s Ward 7. The Greenlight Hub sites serve as central support locations for drivers and driver prospects, and Uber anticipated that the East River Park hub would be assisting thousands of drivers each week. Ward 7, for years an underserved, impoverished neighborhood, is experiencing some revitalization.

“Not only can the Greenlight Hub increase activity around the center, but it can also boost economic opportunities for those who live, work and shop in the community,” said Cedar Realty Trust COO Robin McBride Zeigler.

“Simon has embedded an Uber ‘button’ into its property websites and apps that enables shoppers to hail a ride to a particular center with one click”

Another landlord pursuing rideshare strategies is Simon, which owns about 200 malls and shopping centers across the U.S. Simon has embedded an Uber “button” into its property websites and apps that enables shoppers to hail a ride to a particular center with one click. The technology went live in 2017 and has generated upwards of 442,000 clicks to the ridesharing service.

But shopping center owners are not just waiting around for a partnership before they establish pickup and drop-off locations. Taubman Centers, for one, is placing two general ridesharing stations in the valet areas of its newly redesigned, tech-enhanced garage at Beverly Center, in Los Angeles. That 793,000-square-foot property recently underwent a $500 million renovation.

And Vestar provides an outdoor rideshare drop-off and pickup lounge at its 1 million-square-foot District at Tustin Legacy, in Southern California, that it initially set up a year ago, for St. Patrick’s Day. Among other amenities, this covered lounge offers Uber and Lyft customers bottled water and even provides entertainment on the weekends, according to Forman. But the landlord is hoping to establish a more formal relationship with a ridesharing company at that property, as well as at its shopping centers in Fort Worth, Texas; Salt Lake City; and Seattle.

“A lot of our customers are looking at alternative forms of transportation, because a lot of our properties are in urban areas, where parking can be more challenging,” said Forman. “We see incredible benefits tying into brands like Uber and Lyft.”