By William Dupley
Increasing parking revenue using smart parking technology is achievable by evaluating the Smart Parking Value Chain. There are four domains in this value chain:
- Parking Management: Ability to make strategic application and use of existing and planned parking spaces, both on-street and off-street, in a given area.
- Parking Revenue: Ability to ticket for parking and enforcement of payment.
- Parking Optimization: Ability to ensure that data generated by smart parking services is not held in silos to ensure that availability and occupancy are available to stakeholders.
- Parking Integration: Ability to integrate data from sources into one data repository.
Value chain analysis is a great place to start looking for how a parking authority can benefit from smart parking technology. This will enable organizations to compare current and future value chains and make decisions based on reliable data.
Objectives for Parking Rates
When developing new revenue-generating strategies, you must first define objectives. Examining parking rates will require rate-specific objectives to guide approaches that align with overall business goals.
The equation is simple – winning firms have clear objectives. These objectives often include commitments to customer loyalty, market leadership, employees and global citizenship. More often than not, however, the number one objective is profit. This can seem capitalistic and might rub some people the wrong way. But when asked, many presidents defend positions like these. Without profit, the company would not be able to do any of the other things it wants to do.
This is a profound statement and one that should resonate. Profit is not a bad word. All businesses must make a profit. For a private firm, profit is a responsibility to the shareholders; for a public sector company, profit is a measure of good stewardship.
Increasing parking revenue can be as simple as increasing parking rates. However, that may not align with the behavioural image of a responsible citizen. As mentioned in our blog about increasing parking revenue, if parking rates are raised by 133%, 99% of work or business parking users would stop using parking services. This may be a good thing for the parking lot owner in that they sell the monthly spots as casual parking spots and increase revenue, but the impact on the transit systems and workers may be very destructive.
The following is an excellent example of parking rate objectives from Toronto’s Green Park annual report.
Parking rates are set in a manner that fosters the general objectives of the Toronto parking authority and in turn supports the city’s key transportation and city building objectives. These objectives are to:
- provide low-cost, short-term parking, mainly a neighborhood in commercial areas.
- discourage long-term parking especially in downturn and midtown commercial areas and commercial areas well served by transit.
- encourage downtown commuters to park at suburban car parks and transfer to public transit.
- generate sufficient revenue to cover minimum operating and administration costs and either recover past capital costs or allow for future capital investment.
Other parking authorities have very different parking rate objectives. Here are a few different objectives:
- Environment: reduce emissions from vehicle traffic, leading to a reduction in pollutants including NOx, CO, etc.
- Transport: reduce motor traffic volumes from circulating traffic.
- Parking management: improve access to parking spaces through the provision of information and available spaces.
- Parking Management: move demand away from oversubscribed to lower occupancy locations, leading to a more balanced distribution of parking.
- Parking Management: improve payment compliance in paid-for spaces, increasing revenues and reducing administrative costs.
- Parking Management: examine real-time and historical sensor data, providing a vital source of information in the intelligent appointment of traffic officers.
- Digital Access and Transparency: improve access to parking bay occupancy data and other usage data.
- Sustainability: reduce demand for real estate by optimizing usage of current parking space.
- Economic Growth: improve customer experience with reduced time to park, increasing
- Economic Growth: data is being increasingly used by external organizations and have developers in the production of integrated parking applications and in-car solutions that make finding a parking spot even more relaxed and the payment transaction seamless.
Parking management is defined as the strategic application and use of existing and planned parking spaces, both on-street and off-street, in a given area. Effective parking management can spur the development of underutilized parking lots, yielding increases in tax revenues to cities which can also increase revenues. To increase revenue, the smart parking system must enable the Parking Management Value step with the following capabilities:
- Ability to identify available spaces
- Ensure revenue collection from cars
- Ensure parking lot is clear of snow or water
- Ensure parking lot is free of hazards (potholes, broken pavement, garbage)
- Ensure long-term customers do not occupy short-term parking spots
- Ability to support mobile payment
- Ability to support per minute parking charges versus flat rate charges
- Ability to forecast parking demand
- Ability to optimize pricing strategy: consider economic and financial feasibility issues, site characteristics, locational features and compatibility with surrounding uses as well as market and regional issues
Case Study: SFpark
San Francisco, California, has set several goals, including one that ensures at least one parking space is available on each block in urban areas each day. The goal is to eliminate underpriced parking and reduce the number of drivers cruising nine different streets to find an open space. The program used variable pricing techniques when setting the prices of the curb parking program using smart parking technology. With this technology, the city adjusted curb parking prices in response to the observed occupancy rates and enabled a pricing structure that varied by time and location. The overall goal of the program was to optimize efficiency. The results of this program are:
- Short-term parkers in garages increased by 11 percent or about 130,000 short-term parkers per year.
- 74 percent of responded stated that it was “somewhat or very easy to pay for parking.”
- 43 percent reduction in the time it took drivers to find a parking spot, resulting in drivers finding parking within 6.5 minutes.
- 30 percent reduction in vehicle miles traveled and greenhouse gases from vehicles searching for parking.
- 8 percent decrease in traffic volumes in areas with improved parking availability.
- 22 percent reduction in double parking in pilot areas
Case Study: Town of Cottesloe in Perth, Australia
The Town of Cottesloe in Perth, Australia, is a popular tourist destination. Cottesloe managed their parking using traditional methods: officers would patrol time-restricted areas, identifying overstays and issuing tickets. This was inefficient because not all infringing vehicles were identified. It was also tedious and time consuming for parking enforcement officers.
Cottesloe implemented a smart parking system to improve their parking management capabilities. They installed it on Cottesloe’s busy and popular commercial strip – Napoleon Street. The trial system comprised of 34 in-ground vehicle detection sensors, relaying information to their smart parking software. As a result, all overstays were identified in real-time the minute each vehicle exceeded the time limit.
After a two-month trial, a comparison with the same period the previous year showed tremendous efficiency savings and increased revenue generation. As a result, the council approved the installation of a further 554 vehicle detection sensors in the beach front area.
- Revenue results: within a 4-year period, revenue from parking infringements increased from $230,400 to $983,200 AUD.
Billing for parking is a crucial source of income and can be a valuable control mechanism for driver behaviour. Thus, ticketing for parking and enforcement of payment is a core part of the parking value chain. To increase revenue, the smart parking system must enable the parking revenue value step with the following capabilities:
- Ability to ticket for parking and enforcement of payment.
- Supply information on parking utilization. This can be used to encourage or deter people from parking in specific locations.
- Ability to dynamically adjust price based on time of day to maximize revenue for peak times and attract customers at low times for leisure activities.
- Accurate billing based on how long a vehicle is parked. This is of particular value on-street parking.
- Ability to ensure security when identifying cars and recording payments, facilitating all mobile transactions.
- Ability to read license plates.
- Ability to manage prepaid permits.
- Ability to manually enter information for parking officers.
- Ability to facilitate payments using mobile apps.
- Ability for drivers to book and pay in advance of arriving at the parking lot.
- Fully automated payment upon entry.
- Ability to integrate with credit card service providers.
- Fully automated ticketing of vehicles that are past due.
- Ability to collect revenue from parking app providers.
- Ability to collect advertiser revenue from retail and restaurants that advertise on mobile applications.
- Ability to create premium parking services and parking-as-a-service models (e.g. valet)
Case Study: Miami Parking Authority
The Miami Parking Authority (MPA) launched an ambitious “meter removal program” to reduce on-street parking meters while encouraging mobile parking payments. The goals were to reduce cost and increase efficiency while ensuring parkers have convenient payment options. In Little Havana, pay stations were removed over a period of time, and mobile payment began to rise. As a result, the area achieved significant year-over-year growth in transactions and revenue in the following months as compliance increased (see Fig.2).Case Study: Miami Biscayne Blvd (Lot 19) Note Collector Removal
At Lot 19 on Biscayne Blvd, another cost-saving strategy was implemented. This lot is used by visitors who are reluctant to download the mobile application. After analyzing the way people paid for services, the Miami Parking Authority (MPA) found the majority of people paid by credit card. The parking meters with banknote collection capability had high maintenance costs. The first step in changing this area’s revenue capability was to remove the banknote capability to drive customers to use credit cards. Over the next few months, both total revenue and transaction volume remained stable. Credit card payment increased to account for 99% of all purchases. Removing note collectors not only saved the MPA thousands in maintenance costs annually without turning away users or losing revenue, but also had the unintended effect of shifting users from coin payment to credit card payment.
The key to both of these revenue-generating capabilities is the data that was collected from the smart parking system. Without data, it is difficult to determine the real impact of one program over another. Our next blog will continue this discussion and examine how revenue can be increased though Parking Optimization and Parking Integration value steps.
 Terry Norman and Steven Revill Future Cities Catapul: IoT Investment case ToolKit
 Finding the Value of Urban Parking: An Analysis of the Impacts of Smart Parking Systems on Congestion and
Land Values in Downtown Houston Final Report PRC 17-88 F
About the Author:
Bill is the Digital Strategist for FoxNet Solutions. Formerly the Cloud Chief Technologist for Hewlett-Packard Enterprise Canada, Bill has provided Hybrid IT and IoT Strategic Planning advisory and planning services to over fifty Private and Public sector clients to help them migrate to a Hybrid IT Cloud Operating model. These transformation plans have helped both government and industry reduce the cost of IT, re-engineer their IT governance models, and reduce the overall complexity of IT. Bill is also a member of the Open Alliance for Cloud Adoption Team and has co-authored several documents on Cloud Maturity and Hybrid IT