The driver beside you could be using a shared vehicle. Within the next three to five years, this scenario will become increasingly common as the car-sharing sector grows at a 21.12% compound annual growth rate and expands towards its projected $20 billion valuation.
Why should you care? Because these shared vehicles need parking, and the customers looking to secure spaces are not individual consumers. They are businesses looking for monthly parking at scale.
For parking operators who are prepared to welcome this new subset of customers, the opportunity is great.
Meet Your New Market of Monthly Parkers
Car sharing is a subset of the Shared Mobility market. It formed as a response to the escalating costs of vehicle ownership, especially in urban environments. With transportation costs being the second-largest household expense in America, it’s no wonder that car sharing is expected to attract 36 million users by 2025.
This shift is driven by businesses that leverage consumer interest in reducing ownership costs. By sharing vehicles, consumers pay proportionate to their usage, making transportation more affordable and accessible.
While personal vehicles are typically parked 96% of the time, shared vehicles have much higher utilization rates, translating into more efficient use of parking spaces. But, depending on the car share model, parking needs vary.
Understanding Car Sharing Segments: Key Parking Preferences and Needs
Platforms such as Turo and Getaround enable car owners to rent out their vehicles in a manner akin to Airbnb, creating a peer-to-peer car-sharing ecosystem. Allstate has joined this market with Avail, its car-sharing initiative. While these platforms may provide some parking assistance to car ‘hosts,’ there’s a growing segment of hosts who, treating car sharing as a business, are in search of parking solutions for their surplus vehicles. Hosts may have anywhere from a few to several thousand vehicles.
Another longtail market is car share for rideshare. Here, several entrepreneurs spin up rentals for your Uber and Lyft drivers. They typically want to park in areas that are easy for your average rideshare driver to pick up keys and drop off the vehicle a week later.
Another example of car sharing looks like a user-friendly alternative to traditional car rentals. DriveNow, Halo, and Car2Go are just a few you may not have heard of, but did you know that Uber and Lyft provide rentals as well? These services often require scattered parking spaces each month in strategic locations to cater to distinct customer groups, from urban dwellers without cars to travelers near airports.
Large corporations are also increasingly adopting fleet car sharing, providing employees with shared or exclusive vehicle access. A study of a North American corporate car-sharing program found that 2 in 5 members sold or held off in purchasing a vehicle due to a corporate sharing program. The study also found that having the program decreased the need for 33,000 privately owned vehicles, according to a 2015 brief from the Transportation Sustainability Research Center at the University of California, Berkeley. Business in this category could range from pharmaceutical reps to almost any salesforce you can think of! Since they want to enable sharing across their ecosystem, they look for strategic places for their network to conduct key exchanges.
New car-sharing business models are likely to emerge, bolstered by significant investments from VCs and OEMs in various regions. Companies like Avis Budget Group and BMW are actively extending their car-sharing services. And new models such as campervan rentals are already starting to expand, catering to a diverse range of mobility needs. As new models emerge, parking will need to evolve to support them.
Regardless of the model, both future and current, one thing is common. Businesses are managing the parking to simplify the process for their users.
I May Have Some Car Share At My Facility, But Where Do The Rest Park Now?
Parking constructs can fall into three basic categories. Free-floating or station-less parking allows cars to be picked up and dropped off in any service area (think: street parking). Station based require pickup and drop off at the same location (think: round trip). Then there’s A to B models which start at one station and can end at another station (think: no round trip).
Some car-share fleets may park with you today, either formally or informally. Others rent warehouses and set up their own pickup and drop-off mechanisms (e.g., delivery). Parking isn’t an easy feat for these customers. They conduct heavy market research for each location, carry specific insurance, develop varying rules for both key exchange and ingress/egress, manage payments across various locations, and work through different infrastructures to support their unique parking constructs. Simply said, they engage in several workarounds to find and manage parking today.
The Sky Is Not Falling, It Is Just Changing Colors
While consumers will continue to drive the bulk of parking demand over the next few years, where there’s a car share fleet, there’s a need for parking and a better way for private and public operators to unlock their potential.
Parking managers, both private and public, are positioned to seize this opportunity by partnering with mobility parking platforms and consultants to adapt their facilities. This could involve creating flexible parking packages tailored to the fluctuating usage patterns of shared vehicles, establishing pricing models that help earn revenue from new gate technologies, automating B2B processes (e.g., documentation, customer service, billing), and/or establishing designated zones for easier vehicle pick-up and drop-off. By doing so, parking operators can tap into a new revenue stream while also contributing to the broader goals of urban mobility and sustainability.
As cities and consumers increasingly embrace shared mobility, parking providers who anticipate and respond to these shifts will not only enhance their viability but also play a pivotal role in shaping the future of transportation. In this evolving ecosystem, the ability to adapt and innovate is key to unlocking the potential of shared vehicle parking and ensuring that the infrastructure keeps pace with changing consumer behaviors and preferences.
Scott Petri is President of Mobility Parking & Advisors. He can be reached at scott@mobilityparkingadvisors.com.
Rachel Allen is CEO of Mobility Places. She can be reached at rachel@mobilityplaces.com.
