A friend who is also a parking operator called the other day. Yes, I do have friends that are operators. He asked if we had any articles that focused on the reasons a company would hire an operator rather than run the parking “in house.” I looked back through about five years and we didn’t have much. So I decided to try it out here on the blog. Here goes:
- An operator always has back up personnel should someone in your facility be ill or on vacation. They can provide trained staff at a moment’s notice. No need to have the janitor taking tickets in your garage.
- How hard can running a garage be? Here’s one question: ‘Which is better, a turnaround grace period or a floating grace period?” Do you know the answer? The correct answer can make you 20% or more in bottom line income. An operator knows.
- Did you know that you can often sell 750 monthly permits in a 500 car garage? Your operator does.
- If that leaky pipe on the third level ruins the paint job on your largest tenant’s Mercedes, guess who he is going to call? Wouldn’t you rather the operator took care of that little PR problem.
- How many good car repair places do you know? Your operator has relationships with a number and sends them a lot of business. I’ll bet they get a better price than you when that Mercedes needs repainting
- What about hiring and training. Your operator has entire departments that do nothing but ensure that there are trained people always in the pipeline so when there is turnover, staff is ready.
- Who deals with terminations? This is a high turnover business. Do you want to be the one who makes the decision to terminate?
- How about unions. Do you have union contracts? Your operator works long and hard ensuring that they get the best arrangements when unions are involved.
- Marketing is important. Do you know what garages are full in your area? How about where to look for after hours and weekend customers. Are you prepared to cut deals with that restaurant across the street for after hours valet? Your operator is and knows how to control it.
- Who is going to audit your garage? Your accounting firm? HA – they have no clue as to the techniques used in controlling a business where the inventory is fluid, most income is in cash, and the staff is mostly low paid.
- What about equipment? When was the last time you bought a gate, loop detector, ticket dispenser, computerized revenue control system? I’ll bet an operator can get volume discounts.
- An operator carries insurance, Yes, you will pay for it, but the insurance is the right kind for parking operations. Is this something you need to worry about?
- Then there’s signage, uniforms, background checks, lighting, steam cleaning, sweepers, supplies, cards, hangtags, tickets, receipts, and oh, we haven’t even discussed validations, selling and tracking monthly permits, reserved parking, nesting, anti-passback, insertion cards, prox cards, AVI, license plate recognition…..
Still want to run your garage yourself? You are successful because you are the best at what you do. Why not hire a company that knows what it’s doing in your garage?
JVH
4 Responses
A friend of mine once said “By the time you realize you should have hired a parking operator it’s already cost you much more than it would have if you would have hired them in the first place.”
Taking parking operations in-house doesn’t make sense to me. Owners rarely consider bringing Security or Janitorial in-house. Why Parking? Bringing Parking in-house makes the least sense since Parking is the one area that can directly add to the bottom line. Security and Janitorial are usually overhead expenses, with no hope of a net profit. I would prefer to have a professional, an expert, running a business unit that can make me money. Just my $0.02…
This makes perfect sense but the next blog topic needs to be on “What an owner should expect of an operator” or “How to tell a good operator from a bad one” or “What are an owner’s responsibilities when they hire an operator?”. It needs to be more than just cashing a check every month (it doesn’t matter if the owner is public or private).
1. Trained staff – surely you jest. If the staff speaks english at all, it is usually a surly growl or an “I don’t know”. Just getting the staff to take their Ipod headphones off during their shift and taking the cell phone out of their ear would be a remarkable achievement. Actual knowledge of their job – forget it. They can usually rustle up a body to fill a shift, but then I get nailed with the OT.
2. Maybe the GM or RM knows about the better grace period – the lower level managers will not. And then to program or reprogram the grace period they will call the equipment company at $100 per hour. Usually this is changing one option in the software and the parking managers don’t know where or how to do this.
3. Oversell is not exactly rocket science.
4. Lack of training on handling claims or a hide-and-seek attitude to claims handling make most claims handling by operators a PR nightmare. It usually takes the call you said to avoid until a claim is handled by the operator.
5. The operator is passing the claim through and will not negotiate on the owner’s behalf. The owner will get a better deal and usually insurance just has the claimant get several quotes or go to the claims center to be adjusted.
6. If I lose an employee I get a warm body, usually quickly. Trained, see #1.
7. Most low level managers tolerate bad employees, stealing employees, rule-breaking employees – as long as they show up regularly and on-time. It is all about filling the shift and not about raising the operational competency at the facility.
8. Unions. If I run the operation in-house I may be able to avoid unions altogether. The only reason operators hate unions is they take the most profitable non-operating income opportunity out of play; fringe benefits.
9. Your operator is not concerned with marketing unless it is a lease contract. If your facility is managed then any marketing initiative is few and far between. Particularly if your manager has competing facilities that may be affected by a marketing push.
10. You want your operator auditing themselves? Unfortunately this is the cozy situation allowed in most parking operations. The manager reviews and controls the local paperwork and equipment reports, deposits, and monthly card programming. Card audits, paperwork audits – usually the on site manager is tasked with this responsibility. Can we see a problem here?
11. Most operators have a brand of equipment they favor simply for compatability reasons. An honest opinion. Functionality test. Best deal available. UNIMPORTANT. Our billing software communicates with brand X so we suggest buying brand X.
12. GL, GKLL, auto insurance, theft – any commerical lines agent can assemble the right package of coverages. There is no mystery the operators have solved with coverage. And there rates can be downright ridiculous.
13. There are a lot of moving parts to running a parking operation. It can be a real pain in the a**, but lets not glorify the operators. I would rarely recommend running an operation in-house simply because of the employee replacement issues, but you get very little for your management fee from a parking operator. If they keep the lights on, the place doesn’t burn down, and they report most of the money collected – you are ahead of the curve.