Las Vegas’ Brandy Stanley disagrees with my comments on San Francisco’s collection problems. Here is her piece:
I suggest that perhaps a comparison between government collection rates and private collection rates for parking tickets be looked at before bashing government collection rates. Having managed both systems, I can attest that it is difficult to collect outstanding parking tickets no matter who you are. Getting a collection company to really put effort into collecting a debt under $100 is like pulling teeth – it doesn’t make business sense for them to pull out all the stops, so you get maybe a couple of letters, automated skip-tracing only and if you’re lucky, some auto-dialer calls – providing the company can find a phone number which you probably don’t have and can’t provide when you turn the account over.
Private companies operating on private property can’t put registration holds on vehicles and in some cases are prohibited from booting. My government collection rate was an order of magnitude higher than my private company collection rate. And I suspect universities have the highest collection rate in the industry because they control 100% of the on and off street parking on their campuses, plus can deduct fees, ban registration for school and withhold diplomas.
Even with booting and registration holds, a collection rate of 90% is from my experience stellar performance. People often change cars like they change underwear so what good does a registration hold do if you’ve switched cars? And booting? Well, that means you have to find the vehicle while it is parked on the street or in a lot owned by the municipality. Sounds easy, but in reality is very difficult unless you have an army of people out on the streets with LPR technology. Say your municipality has 2,000 miles of road. How do you monitor all 2,000 miles 24/7?
We won’t discuss out of state plates, temporary registrations, ownership transfers and the like.
OK, First of all, I wasn’t discussing the collection rates between public and private citations. I was discussing a business that allowed 10% of its revenue to go away based on uncollected charges. Any business.
The problem is here, it seems to me, is that there is so much money involved that we have an ‘acceptable’ loss in the parking industry. Whether its 1%, 10% or 40%, its a big number. Is it difficult to get those pesky citizens to mind us and pay their bills. Yes. But in California, at least, I’m told that outstanding citations can be tagged on to a vehicles registration fees so you won’t be able to register until you pay up. This is in addition to booting, towing, and other harassment measures available.
My experience is that collection issues grow exponentially as the time passes. If someone doesn’t pay in two weeks, then the harassment must begin. Trust me, I understand Brandy’s point as to the difficulty involved. But I wonder — do cities have people who think its their only job to collect these fines? And if so, are they doing their jobs?
When the boss says that a 10% loss is “stellar” then what is a 15% loss, Good? How about 20% Acceptable? or 30 % OK?
JVH
PS Andy says, after reading the above, what would happen in one of Vegas’ storied casinos if a Pit Boss turned in a 10% Loss? Or even a 1% loss. Hmmmmm
2 Responses
The pit boss would probably end up doing some time. But that’s a different industry with different expectations. What do you think the benchmark collection rate is for an unsecured credit card versus a vehicle loan? Every industry that has receivables has different characteristics and different benchmarks for what a good collection rate is. Talk to somebody in the collections industry. Parking tickets happen to have a lower benchmark. That certainly doesn’t mean you give up.
I’m going out on a limb here, but you CANNOT get to a 90% collection rate without registration holds, so I’m sure – and don’t even have to ask – that SF is using that tool. Without registration holds, you’re probably looking at under 80% collection rate.
Shrinkage,loss, leakage…all the same word. If you own a bar you talk about “liquor loss” or “pour rates” . If you can “collect” or “account” for 98% of your liquor you are doing a stellar job. Parking is not alone in saying that some sort of “loss” is acceptable.
Brandy- Here in PA we do not use registration holds and our collection rate in State college is just about 90%( of in state plates). What we do have, that private owners do not, is access to owners information for free and electronically. We also have the ability to file an actual citation with our local Magistrates. If you avoid them, the Constable comes knocking on your door and he will take you to jail. It works the same as registration holds and without these powers private operators have difficulty in PA.