For a moment, let’s talk off street. What do we do? We rent a parking space to a driver for a short period of time, and charge based on the time used. When the driver comes in we don’t know how long they will stay, and in most cases charge based on entry time and exit time. In 1960 we stamped a ticket and handed it to the driver, and on exit we stamped it again, looked at the two times, computed a fee, collected the money and opened the gate with a push button if there was a gate.
Today its more automated, but the overall concept isn’t much different, is it.
I just read an article about a shopping center in Australia that has no gates and uses license plate recognition to log the people in, and the driver pays at a kiosk by entering their plate number. Fair enough — so far not much different that in 1960.
However there is a twist — In this case the shoppers are asked to sign up on line, put in their credit card, and when they do, they drive in and out of the garage without stopping, and without having to pay on site. Their credit card is charged for the time used.
In addition, the shopping center has a lot of information about its customers, plus it can push text messages and information to them as they arrive. The parking experience becomes a part of the shopping experience.
The difference? No gates, no spitters, no ticket acceptors. Only cameras and a pay on foot. Oh, over 14,000 signed up to pay on line in the first month.
The concept is moving from a straight line parking transaction to an e commerce transaction. Now that’s the beginning of change.
There are a couple of questions I have about this, but I will be in Sydney next month and go take a look at the center.
Another change we will be seeing is dynamic pricing. Just like the airlines and hotels do.
If you make a reservation to park in a certain garage, the rate is fixed and you pay what the garage told you when you reserved. However if you just drive up, you pay what the variable message sign says the price was at the moment you arrived. It could be really high, or really low, depending on the number of cars in the garage at that time, the number expected in the near future, and other variables like holidays, weather, and local road construction.
This is not earth shattering new, as I know an expert who stands in front of his lot across from Staples Center here in LA and adjusts the prepay price depending on who the Lakers are playing, how long til tip off, and how many cars are in his lot and how many are lined up before the stop light just up the street. The price can change by $5 or $10 of $25 as the situation dictates.
The difference is that he has a lifetime of knowledge and can make on the spot decisions. Data collection and the proper algorithm will set the price on that airport garage today. Parkers will learn to reserve their spaces early to get a lower rate (perhaps).
So we do away with gates and etc, plus we add dynamic pricing. Not really a huge change in the business for decades ago. It might be easier and quicker, but the business hasn’t changed.
But it will. Pressure from Uber and Lyft will begin to chip away at the business. Rapid transit, ride sharing, high gas prices, and parking taxes will take their toll. Smart, technohip bright young people will see ways to alter the business in ways we haven’t thought.
We have been looking at ways to make the business we know run faster, better, more customer centric. But what about the business we haven’t thought about yet? Ignore the future at your peril.