By Eugene Gerden
The Russian parking sector is experiencing financial hardship in the wake of international sanctions applied to the country following its invasion of Ukraine in February 2022.
Before the invasion, Russia’s parking sector represented one of the most developed segments of municipal infrastructure within most Russian cities. Moreover, the level of organization of road traffic and the use of intelligent transportation systems in Moscow and St. Petersburg — Russia’s largest cities — compared favorably to those of Western capitals, despite the ever-growing Russian automotive fleet.
During the past 10 years, the number of registered motor vehicles in the country has increased from 45.5 million to 64.5 million units, of which 50.6 million are passenger cars, according to data from the Russian Ministry of Internal Affairs. On average, the number of vehicles increases annually by 2 million to 2.5 million units, most of which are passenger cars.
Sanctions spark departures
However, the beginning of the Russian-Ukranian war and the resulting unprecedented sanctions against Russia led to a serious stagnation of the entire sector, perhaps best exemplified by the exodus from Russia of many Western providers of technologies and equipment used in the parking sector.
Among the most painful parking-related departures from Russia was that of Flowbird, a global provider of integrated parking and transportation solutions that has its headquarters in Neuilly-sur-Seine, France. The company left Russia in October 2023 following escalating sanctions by the European Union against the country. (Flowbird did not respond to requests to comment on this story.)
Before its departure from Russia, Flowbird was one of the main suppliers of parking equipment in many Russian cities. Flowbird’s exit led to the suspension of operations of parking meters in many Russian cities, including Rostov, Kaluga, Novosibirsk, and Vladivostok, according to the Russian newspaper Kommersant.
Switch to domestic production?
The strengthening of EU sanctions against Russia has caused serious problems with parking meters that operate using foreign software, said Denis Kvitko, the deputy director of the Department of Road Infrastructure and Transport for Tyumen City, one of Russia’s largest cities in Siberia.
“We are currently switching to domestic software,” Kvitko said. “Currently payment of parking may take place via the mobile app developed by the city’s department of transport, Tyumengortrans.”
In addition to parking meters, serious problems exist with most other foreign technologies used in the Russian parking sector. Before the Russian-Ukranian war, most of these technologies were supplied to Russia from EU member states — mostly France and Germany. However, after the war began, most shipments of these supplies were suspended, along with the servicing of most such equipment.
One of the ways to solve the problem could involve switching to domestic technologies, according to experts at the Russian Ministry of Industry and Trade. However, as most Russian companies do not have the needed experience and competencies to design modern parking solutions, implementation of these plans could be seriously delayed, the experts noted. Contributing to this problem is the massive exodus from Russia of various experts in the field of road traffic management and parking, many of whom left the country after the government announced a partial military mobilization in October 2022.
Declining private investment
The war and the resulting economic crisis in Russia have resulted in a decline in investment in the country’s private parking sector. In general, paid parking can be introduced in Russia based on a concession agreement concluded between a city and a private company.
After February 2022, the number of potential concessionaires has significantly declined due to their increased costs and reduced profits, according to officials at Gorodski Parkovki, a Russian company based in the city of Voronezh. The company previously had signed a concession contract with local authorities to manage parking spaces in Voronezh.
However, Gorodski Parkovki has been forced to sell some of its assets to the city of Voronezh, due to the deterioration of the overall business environment in Russia and additional requirements imposed on it, according to the company officials.
Parking fees rise in Moscow, elsewhere
Meanwhile, authorities within certain major cities of the country, including Voronezh, Moscow, and St. Petersburg, have recently announced plans to significantly increase parking fees as well as the number of parking places within their boundaries. These plans are intended to generate additional revenues for municipal budgets — a portion of which must be used to help defray military expenses — and contribute to the improvement of road traffic. In addition, it is hoped that the increased revenues will attract new investors to the parking industry, primarily concessionaires.
Like many cities the world over, Moscow is increasing the cost of parking to help manage parking space availability and address traffic congestion. The Russian capital has a population of up to 15 million people and an automotive fleet of about 4 million vehicles. Since July 2024, Moscow has raised the hourly price of parking to 600 rubles (US$6.20), an amount considered high even in the Russian capital. The city also has expanded the number of streets on which it charges parking fees, according to city officials. Today, Moscow oversees a complex system that includes more than 99,500 paid parking spaces on the city’s street and road network.
Moscow’s introduction of paid parking results in part from the need to increase the turnover of parking spaces in city parking lots, especially in the central part of the city, said Oleg Medvedenko, the head of the ad-hoc analytics team at the Safe Transport Innovation Center of the Moscow Center of Traffic Management. During the day, the current occupancy rate of paid parking spaces on many Moscow streets was close to 100%, Medvedenko said, causing chaotic traffic and leading to increased parking demand.
"In general, if we talk about the impact of paid parking, the previously implemented measures helped to solve the problem of chaotic parking on the streets” and address accident hotspots, Medvedenko said. “Thanks to paid parking, people in the city no longer park in two or three rows and do not block sidewalks and pedestrian crossings.”
Raising the price of paid parking in Moscow is also part of an attempt to reduce traffic loads on roads that can no longer cope with the ever-increasing flow of cars. “The Moscow city authorities believe that the increase in the cost of paid parking will encourage people to use public transport,” Medvedenko said.
Eugene Gerden is an international freelance writer who reports on the global parking and automobile industries. He can be reached at gerden.eug@gmail.com.
