Parking 101 (for Businesses)
Parking is frustrating. As a downtown business owner, parking has likely been an absolute thorn in your side for years and you have probably had countless customers/clients make remarks to you along the lines of:
“I hate parking downtown!”
“I can never find a stall.”
“Parking is so expensive.”
“Parking makes me want to not come downtown.”
Chances are that you do not own or control your own parking which means that parking is not only a huge impediment to your business, but is also something that you have almost no control over. There is nothing more frustrating than feeling trapped like this.
Zipstall has prepared this Parking 101 - for Businesses as an educational/discussion piece to shed light on the different perspectives and forces acting in the parking ecosystem, but also to outline how we are building a platform that works within the constraints of the realities to provide the highest level of customer experience (for your customers) by both taking away the pains of parking and providing your clients/customers with savings and rewards.
Many people also believe that “free parking” will solve all of the customer parking problems downtown. This is couldn’t be further from the truth and in this document, we will explain the ramifications of free parking and also describe the real solution for superior access to parking and an improved customer experience. We all want the same thing, a better downtown experience where parking is not a deterrent.
We have laid things out in a question-and-answer format to make it easier for you to find the specific info you are looking for.
What is parking?
This is an easy one. Parking is the temporary storage of your vehicle while you are doing other great stuff. No one comes downtown to park, they come for the businesses, events, festivals, etc…the good stuff. As cities become more urbanized the demand for parking increases and its availability decreases. Once there was enough demand for parking in central areas they started charging for it so that it was not being abused and that there would be available stalls when people needed them and the parking industry was born.
Who owns parking?
Parking is interesting because is it an ecosystem in which private and public offerings compete head-to-head. Customers have a choice to either park in a municipally-owned stall (curbside or some off-street parking facilities) or in a privately owned stall (surface lot or parking structure). Using round numbers, the private parking options in downtown Edmonton represent approximately 80% of the market inventory with municipal parking representing the other 20%.
The municipally-owned 20% of the market stalls are essentially the property of all tax-payers which means that all tax-payers benefit from higher parking revenue and the efficient operation of these stalls. It is also important to the municipality that these stalls are used to provide strong access to businesses in these areas so that parking is not a deterrent for customers to frequent and spend money in these districts.
The privately-owned stalls in the market (80%) are largely utilized to support tenants in commercial properties (office buildings, hotels, retail centres, etc.) but many are also unaffiliated with a building and are available for public parking. These privately owned lots do not have the same stewardship role to play as the municipality does and as such the private segment of the market is almost exclusively revenue driven and focused on generating the highest return possible.
What should be the goal of curbside parking?
We believe that curbside parking (owned by the City) should be primarily for customers of area businesses who need a place to park for a relatively short period of time (say less than 2 hours). This is why the City has their 2-hour maximum time limitations on most stalls downtown. Parking experts suggest that the optimal occupancy for a parking zone is to be full with the exception of two stalls being available during peak times. This two-stall availability means that the stalls are regularly churning customers and a new customer arriving has a place to park when they need one. If parking is not available when your customers need it, then your customer still winds up being frustrated and less likely to return.
What are the real costs of parking?
Parking comes with a cost to provide. It costs money to create stalls (whether curbside stalls or parking structures) and it costs money to maintain stalls (snow removal, asphalt repairs, line painting, etc.). The most expensive underground parking stalls typically cost in the range of $30,000 to $60,000 to construct. On top of this, there is the operational side of parking which includes payment processing, enforcement, ticketing, meter maintenance, signage, etc. Parking must be built, it requires rules/enforcement and parking needs maintenance in order to operate and all of these aspects contribute to the costs. It is undeniable that parking has costs associated with it and this is why experts consistently state that “there is no such thing as free parking.” All parking sessions come with a cost to the owner of that parking, the question is simply “Who should pay for that cost?”.
Who should pay for the costs of parking?
Parking sessions in a privately-owned parking option are always paid for by customers and there is no subsidy received from the City/taxpayers. The parker bears the cost of parking sessions in city-owned parking options in situations where parking is charged at “true market” rates. When parking is priced below-market or is provided on a “free” basis to parkers, it simply means that the costs associated with each parking session are being paid in part or entirely by the general population through taxes instead of by those benefitting from the service. Because parking is something that some people use heavily and others may never use, it is widely accepted across North America that parking is something that should be charged on a user-pay basis.
Why is paid parking important?
As you know parking is something that is not available in infinite supply. Both private and municipally-owned parking comes with costs associated, but there are reasons behind this which are not simply the greed of the parking owner.
The first part of this is that if parking were provided free of charge then the cost of parking would not act as a deterrent to people considering driving downtown. If more people drove downtown instead of carpooling, biking or taking public transit, then this would contribute to increased pollution, increased congestion and a number of additional negative side effects. Not having costs associated with parking to act as a deterrent for people to drive downtown would lead to perpetually requiring more and more parking stalls and our downtowns becoming overrun with parking…something no one wants.
The second part, which is especially important for city curbside stalls, is that there be stalls available when your customers arrive. Not charging for these stalls would mean that there is no deterrent for people to park in them which means that the first people to arrive will receive free parking and there will not be any stalls available when your customer needs one. When the pandemic started the City of Edmonton implemented a measure with the intention to support businesses downtown by making all city parking free all of the time. What we saw, as a result, was a flood of people who work and live downtown abandoning their parking passes in private parking facilities and moving to the streets to take advantage of the cost savings. Although this free parking was intended to benefit the customer-facing businesses by reducing the cost of parking for their customers, instead it had the effect of eliminating the availability of any parking stalls for their customers and pushed them all into the paid private parking. This recent, local and extremely clear example demonstrated the importance of having some sort of deterrent (cost) associated with these stalls so that your customers will be able to find one when they need one. Even the current 30-minute-free parking strategy is susceptible to abuse by parkers running subsequent 30-minute sessions to achieve free parking (it just takes a little more effort).
Parking needs to be charged at an appropriate level to ensure that alternatives to parking become more appealing and charging for stalls is the best way to ensure that stalls will be available when your customers need them.
How are parking prices set?
Because there is a large private ownership component in the market, it is clear to see how the forces of supply and demand impact the cost of parking as these groups need to strike a balance between; a) pricing low enough to win customers; and b) pricing high enough to cover their expenses and maximize their return. In theory, the parking options are only able to charge what a parker is willing to pay. If they try to charge too much then the parker will simply park somewhere else.
The municipality has a slightly different position than the private owners when you consider that it is a tax-base-supported operation. The municipality is able to charge below-market prices and simply pass the costs of these discounts along to the tax base. In these situations, the entire population is paying for the cost of a benefit received by an individual (taxpayers carry the burden). If the municipality were to charge a higher price, then this additional revenue would go towards offsetting other expenses (reducing the amount of tax required to be collected from constituents - taxpayers receive the benefit).
One clear example of the difference between municipal parking pricing and private parking pricing is for evenings and Sundays. The municipality has elected to subsidize the cost of parking by making parking in these lower-demand times free to the parkers, while their private counterparts provide reduced rates, but almost never provide free parking. The real costs of parking do not ever go away and private owners demonstrate that parkers are still willing to pay, but instead the city gives the parking free to the parkers and subsidizes these times with taxpayer money.
An absolutely critical element of an efficient marketplace is for customers to have access to information about parking to make educated decisions. In the context of parking this has three key elements that must be provided:
- What are all of the options?
- What options are available (at the desired time)?
- What will it cost to park with each of the options (for your expected stay)?
Because all of the historical parking solutions (parking apps and parking meters) are focused solely on helping you pay for your parking session instead of providing the customers with access to the above information, we would argue that the current market is very inefficient (if you don’t have access to information then you can’t make an educated decision and you just begrudgingly park wherever and pay whatever). Through the Zipstall platform, we are delivering a solution that shows customers what all the options are, calculates session costs, tracks availability, and even helps you figure out your best parking option by scoring them based on user preferences. Zipstall is the first platform focused on showing customers where they should park and creating true efficiency in the marketplace. Those most versed in economics agree that allowing market forces to act in an efficient marketplace is the best way to set pricing. Because an efficient market has never existed, the parking prices have been set through an extremely unscientific method that is not based upon supply/demand. Zipstall is changing this.
What is the best parking?
Most people would agree that they are the happiest when they land a prime city stall right on the street immediately in front of the business that they are downtown to visit. These “most convenient” stalls are largely viewed by parkers as superior to privately owned stalls, even if the private stalls are in high-quality buildings that offer both security and heat but are slightly farther away. The irony today is that these prime city stalls are also among the cheapest stalls in the market. The laws of supply and demand dictate that the most sought-after stalls should achieve the highest rates but because the municipal parking business is taxpayer-supported, they are able to charge less than market prices for the best product. The fact that city stalls are cheaper than their private counterparts means that anyone parking for less than 2 hours should be using the city stalls, however, there are not enough stalls for this. If these city curbside stalls were priced at a premium to correspond with their
desirability/convenience then only those parkers staying for a short period of time or who placed a really high value on the convenience would choose to park in these stalls.
Part of the problem in today’s parking ecosystem is that there is no easy way to see where all the parking options are and to compare them based on price. This is why Zipstall is building a platform to show your customers all the options in the market and make it easy for them to find the best parking for their needs, we let them prioritize either Closer or Cheaper and we score all the options in the market and give them the best one.
Why does it feel like we don’t have enough parking downtown?
The typical customer drives to the area of the business that they are intending to visit and as they get closer they start scanning the curbside for available stalls. Along a typical block, there will be between 10 and 30 stalls between the two sides of the street, however along that same block there will likely be an entry to a parking structure that would typically house between 100 and 1,000 parking stalls for public use, but these stalls are not immediately visible from the street (only the entrance is). It is possible that 1,000 of the stalls in the parking structure are available, however, the customer will reach the end of the block, see all 30 curbside stalls being occupied and feel like there is no parking available. This is very typical and a big part of the problem with parking...there are plenty of stalls but the customers don’t have easy access to the information they need to find them.
With Zipstall we provide information on all stalls in the market and by virtue of this, provide users with access to the entire inventory of stalls, whether they can see them from the street or not.
We recommend parking based on their priorities from all options in the market and provide directions/instructions so they can access the best stall for them instead of just parking where they happen to see an open stall.
What are parking deadlines and how do they affect my business?
From the earliest days of charged parking, parkers had to insert coins into mechanical meters to buy parking time. Today the majority of privately-owned parking still utilizes this method of forcing customers to guess how long they will be parked, forcing them to pay for this time in advance and then pray that they make it back to their car in time to avoid a dreaded ticket. We believe that this method of parking (Guess-Pay-Pray) is both frustrating (most of the time don’t know how long they are going to be parked exactly) and is not conducive to a pleasurable downtown experience (constantly having to be concerned about how much time they have left on the parking meter). Forcing visitors downtown to impose an artificial deadline on their own adventure is not conducive to them enjoying themselves, ordering that dessert, or meeting up with friends after as they are consciously or subconsciously concerned about how much parking time they have left. Because the sessions expire it opens parkers up to the potential of receiving costly parking tickets when their session is expired. The City of Edmonton curbside zones have hard maximums on session durations that limit parking to either 2 or 5 hours only which again is a little clock on your downtown adventure telling you that you have to leave.
Zipstall wants people to stay. Zipstall wants people to enjoy themselves without having to worry about their parking. This is why we have built a process of a Session Start/Stop that lets parkers simply start a parking session and then later end it whenever they like. No deadline means no risk of receiving a parking ticket. Parkers can simply pay for the time they use without a deadline looming and forcing them to leave downtown.
Unfortunately, Zipstall is not able to host our unlimited parking sessions in City zones due to the maximum durations they have in place at present.
1) Parker is shown the best option for parking based on their preferences from all options in the market
2) Parkers come downtown confident about where they will be parking (know a stall will be available)
3) Parkers have full transparency on the costs of parking and access to discounts
4) Parking pricing is set by market forces with parkers having access to information on all options
5) Parkers don’t have to guess how long they will be parked
6) Parkers have a session that doesn’t expire (i.e. kick them out of downtown)
7) Once parked the customer no longer has to think about their parking and can simply enjoy their time downtown
8) Automatically pay for the time that they actually used when they leave (no action required)
Parking comes with a cost and it is important that it does so that there are available stalls when parkers need them, but to deliver the best customer experience it is far more important is that the customer feels empowered. By having access to information, a simple/intuitive process, and a backstop to simplify the ending of the session the parkers can simply enjoy their time downtown.
Zipstall is the only platform which prioritizes and delivers on the aspects listed above and is able to deliver a far better downtown experience as a result.
How often do people forget to end their parking sessions with EPark?
Simply put: A lot!
We have spoken with hundreds of parkers and over 80% of the users of the EPark app regularly forget to end their parking sessions and wind up paying extra. We believe that It is not intuitive for people to have to deal with our parking when we are leaving (used to dealing with it when parking only), so forgetting to end the session happens all too frequently.
Zipstall has developed a feature we call AutoStop which (if you have Bluetooth in your vehicle) is capable of automatically triggering the end of your parking session for you (even if you forget) when you return to your vehicle and your Bluetooth reconnects. This feature saves so much frustration and unnecessary cost for our customers and they absolutely love it!