Parking on Five Continents Is Different but Surprisingly Similar
An International View
After 36 years, almost 2,000 parking facilities and five continents, I have found that parking operations are greatly influenced by many factors. Climate, terrain, demographics, culture, socioeconomics and religion all have an impact on a parking facility. However, for all the various differences I have found, there remain a few universal similarities that form the basics of parking.
No matter where in the world, we park vehicles between a set of two lines. A parking space is typically between 2.3 to 3.1 meters wide and 4.25 to 5.7 meters long.
Daily/transient customers receive a time-stamped ticket and pay for parking based on the amount of elapsed time from entry to exit. Contract/monthly customers use some type of access card, either insertion, magnetic swipe or RFID proximity card for ingress and egress.
No matter where in the world that I have looked, cash money changes hands for parking services rendered. And wherever there is cash money, there also is revenue erosion and loss. Many different hands all want a small piece of the cash flow that is due only ownership.
Operators claim they are very much aware of the problem. Unfortunately, being aware of the manipulation methods and working to prevent or minimize the manipulation are two different matters.
Usually there is no incentive or compensation for an operator to get a “good return for an owner; the operator receives the same fee if they it collects 85%, 95% or 100% of the available revenues. Therefore, why work so hard when 85% is as good as 100%? After all, it is not
the operator’s money at stake. If the owner does not care, why should the operator?
Let’s examine some of the most common manipulations that occur and that are easy to monitor and control:
Tickets issued vs. tickets collected. Do a daily reconciliation of tickets issued to tickets collected. If you issue 500 tickets in a day, you should collect 500 tickets. If you collect fewer tickets than the number of tickets issued, where are the vehicles those tickets represent and where is the revenue those tickets would have generated? A guideline to use is a loss factor of 0.004 if you issue less than 20,000 parking tickets a month. If you issue 20,000 to 30,000 tickets a month, use a loss factor of 0.003. If your transient volume is more than 40,000 tickets a month, a loss factor of 0.002 should be used. Any loss factor greater than those listed above, you have a control issue and are losing income.
Manually processed transactions. All parking access and control systems (PARCS) today employ machine-readable technology to read the ticket in time/date encoding. Using its internal clock, the system can then calculate the parking fee absent any employee involvement. However, when an employee overrides the system and enters the time/date manually, the potential for error or manipulation occurs. Therefore, every manually processed transaction must be reviewed to ensure that the machine-readable time imprinted on the ticket at time of issue must match the manually inputted time by the employee processing the transaction.
Validations. If your facility accepts validations for discounted or free parking and the validation must be manually entered to reduce the rate, then 100 of those transaction should be audited to ensure that the validation actually exists and the correct rate structure was used to rate the ticket.
The single largest area for revenue loss is in monthly/contract parking. I have never reconciled an active card file without finding some problem that resulted in a revenue loss. Here are the common findings:
More cards are active and in use than what there are payments for.
Cards are paying an incorrect fee for the level of service the card is activated for. As an example, the card is paying for discounted rooftop parking, but programmed to park on a lower interior level that has a higher parking fee.
Cards are programmed for “free” without authorization, or the authorized date has expired; however, the card remains active.
Passback is not activated in the system, permitting a single-access card to have multiple successive entries or exits.
Cards are inactive in the system; however, the vehicle remains in the facility. At a later date, the vehicle owner pays for the current month of parking to activate the card, and the previous months of income due are lost.
The customer claims to have lost his or her access card. A replacement card is issued; however, the “lost” card is not deactivated. Thus, the customer can now park two vehicles for the price of one.
Every operator will agree that these are common, everyday problems. However, card list reconciliations are not done on a regular basis – reconciled monthly – by the operator and by someone not associated with the specific facility. After all, you can’t expect the manager to do an honest reconciliation if he or she is the person manipulating the system!
These are but a few areas where revenue loss easily occurs. A good audit program will catch all of the above. The program, however, is only as good as the individuals conducting the audits and the frequency of the audits. These items should occur daily and/or monthly, depending on the area of suspected manipulation.
Dennis Cunning, President of DLC Consulting, can be reached at firstname.lastname@example.org.