Transforming the parking landscape one revolution at a time
Some interesting features about parking:
- Typically, car owners spend an average of 10-15 min looking for parking on the street
- While parking is free or cheap in most places (at least in India), there is a cost in terms of lost time and uncertainty of finding a suitable parking space
- As in most informal fragmented markets, ‘jugaad’ (workaround) solutions exist at the local level – e.g. many offices lease space from empty or unused properties OR buildings with offices and commercial spaces use the available parking at complementary timings etc.
So, why is parking seen as a fundamental challenge in the urban landscape?
Scourge of free parking – The perception that parking should be mandatorily provided and for free is regarded by most experts as the biggest challenge to reforming the parking sector. Ironically, free or highly subsidised parking is free only for the immediate user of the service. There are significant social costs to the neighbourhood, to commercial establishments in the vicinity – both direct (having to pay for their own private parking) and indirect (lost business from customers who never visited due to lack of parking), the city (congestion, lost productivity and loss of economic activity) and of course the general chaos that impacts all of us as we find our way to an office meeting, to the store, or to a restaurant.
Alternatives that could address this issue:
The most obvious solution is public transport. However, public transport is unlikely to fully curb the aspirations of an emerging middle class to own their own vehicle. Auto sales projections for the coming decade bear this out. Owning a vehicle is not just about aspiration; it has utility in providing greater control over one’s mobility and privacy. Another rapidly emerging alternative in recent years has been organised cab aggregators. The emergence of alternative forms of mobility will change the usage of a personal vehicle but is unlikely to stop the growth of private vehicle ownership for the foreseeable future. With a private owned car remaining stationary for 90% of the time and space a major constraint, parking remains a growing challenge across the urban landscape.
What will it take to organise the parking sector?
In a scenario of increased vehicle ownership and inability of cities to cope with increased supply of vehicles, addressing the parking challenge will move up the priority list. At the same time, the rise of ‘not in my backyard’ (NIMBY) from local communities (both residential and commercial) that we see emerging over the course of our own work shows the growing barriers to the indiscriminate use of on-street parking. While the potential opportunity appears straightforward, there are high barriers to overcome in building an effective infrastructure solution. Any presumption that a centralised solution by government fiat – especially in terms of providing infrastructure – will address the problem fails to fully comprehend the diffused nature of the problem. We see the path to addressing the parking challenge through tackling three key factors that influence the sector:
Parking inventory supply: Lack of quality and timely inventory
The most significant challenge faced by parking users is the non-availability of adequate appropriately priced inventory. Bridging information asymmetry on parking availability would bring about market driven pricing and allow the introduction of features such as advance booking. The opportunity to make money from parking on under-utilised real estate for short periods provides incentives to bring on board additional supply, creating a dynamic market and brings in greater efficiency in the way we manage our urban spaces.
Making the economic case with users: Competing with free
The clearest way to competing against ‘free’ parking is through superior customer experience, high quality products, and a compelling range of product/service offerings. The greater opportunity in the long term is to transform parking from a capital asset to a pay-per-use model. This lowers lease rental costs for businesses while for home owners this could mean that they no longer need to incur the huge upfront cost of purchasing car parks and instead rent for as long as they need it. This model also helps in better revenue realisation for the inventory holder.
Addressing the dual challenge: Localized density and scalable network
In densely packed and parking space constrained cities, there is a need to innovate on creating additional parking inventory. At ValetEZ, we envision a decentralised network model of parking lots, bringing new (and dynamic) inventory onto the market and manage them through the effective use of technology. This model will address the core concerns of security and reliability to develop a scalable network. With the right economics, property owners with spare spaces and inventory can participate on a platform similar to a managed marketplace.
Use of technology to manage parking spaces has largely focused on smart parking solutions in private parking spaces or aggregating existing parking inventory. However, countries with major space constraints and growing automobile markets pose a different parking challenge and require a solution more suited to their unique needs.
A parking solution that is scalable and replicable can be built on the base of a Parking Technology Stack – a series of technology driven tools and processes that help in the creating an ecosystem for both inventory holders and customers. Such a tech stack would comprise of several layers of solutions and toolkits for inventory development, space management, security, pricing and billing systems, add-on services all integrated on a open platform. This parking technology stack would help provide an ecosystem with common standards and tools to manage a dynamic decentralised network and provide a high degree of standardisation for parking users.