Parking. It’s an issue that impacts everyone who owns a car. People might not think about it or talk about it, but it certainly can be one of those daily frustrations that ignites stress.
Traditionally, drivers will circle the block for a coveted on-street parking space or a parking garage that has an affordable hourly rate. However, there is more to parking than white lines, garages and lots.
The parking industry has resisted change well over the last 25 years, but this behemoth of a market — valued at $100 billion worldwide — is transforming. While investors are pouring more than $4 billion into funding on-demand services, the consumer transportation market is anything but in neutral position. The rise of mobile technology has proven it can disrupt just about any sector of the transportation economy, and parking is no exception.
An Industry Ripe For Disruption
True disruption in this industry can’t be achieved until there is a single-source solution that merges the connected car and predictive parking. Connected cars — the automotive equivalent of a smartphone — communicate with the outside world, have their own wireless networks and, in the future, will be autonomous.
Predictive parking, which is building momentum within mobile parking solutions, predicts where a driver is headed as soon as the app is opened, and enables users to book a spot with a single tap.
As companies realize the vast opportunities within parking, many competitors are aspiring to become the definitive solution. Players like SpotHero and us (ParkWhiz) offer on-demand booking and advanced payments, Passport and Parkmobile make mobile payments a reality and Luxe and ZIRX provide convenient on-demand valet services.
For the technology industry looking to gain traction in this market, the gold-mine opportunity is making parking a frictionless experience. None of the current providers are satisfied with where they stand, and are constantly working to increase coverage and service to become the ultimate solution. While all parking apps are racing toward that objective, the entire industry still has work to do.
Driving To Frictionless Parking
The underlying goal is delivering a solution that removes all frictions that people currently face — finding parking and thumbing through their wallets and cars for money to pay, for example — and creating one seamless transaction that positively benefits customers.
Consumer behavior changes when the utility that’s offered is greater than the existing norm. To accomplish this, it simply requires creating a strong consumer-value proposition generally composed of a frictionless experience.
The rise of mobile technology has proven it can disrupt just about any sector of the transportation economy, and parking is no exception.
A frictionless parking experience means drivers can move freely from point A to point B without any limitations or delays. A multitude of things — cashless parking, reduction or complete avoidance of human interaction and booking capabilities — are at the fingertips of consumers who are testing each product to see what best fits their needs.
Through the mobile boom that’s propelling the parking industry, key changes are helping this market move toward that frictionless experience. These include:
Price opacity turning into price transparency. The price of parking has historically been fickle — depending on the time of day or events in the area — and consumers can hardly evaluate the cost before they pull up to a parking spot or into a garage. The advent of parking apps is shifting the industry from an opaque to a transparent pricing model, so people can know how much parking costs before they arrive at their destination.
Cash giving way to automated mobile payments. The tedious experience of finding a pay box in a parking lot, getting a ticket and hanging on to it is being replaced by seamless mobile payments. Consumers now have the ability to pay for parking with one quick touch of an app.
Coverage increasing every day to deliver true convenience. As mentioned, there’s no shortage of apps helping to make parking simpler. Unfortunately, some of these services aren’t available in particular parts of the country or don’t let people access their cars during certain hours.
The industry knows this is a major problem that won’t help shift consumer behavior, so companies are continuously adding facilities, extending hours and expanding into new markets. While many current solutions overlap, they’re all vying to become the one-stop solution to provide around-the-clock coverage for consumers everywhere.
A lack of inventory control and revenue management being replaced with the need for both. While these apps are providing big benefits to consumers, there’s good news for operators, as well. Mobile apps are enabling the parking industry to move toward a revenue management model, helping garage owners and operators maximize profits.
Think of what Expedia and Priceline have done to the hospitality industry. Technology has made it possible for hotels to price rooms according to demand and keep hotel rooms booked at various prices (i.e., offering deep discounts during off-peak times) to increase profits for hotels. The same practice is gaining momentum in the parking industry, driving increased revenue for on- and off-street parking vendors.
The truth is, nothing is decided within this industry, but both operators and technology leaders know parking is a stress point — an IBM survey showed that drivers around the world spend on average 20 minutes searching for a parking spot.
Success will happen when the pinnacle of a frictionless product is achieved, and parking will especially see an insurgency that will greatly impact consumer behavior.