Is This a Solution in Search of a Problem

There are a number of applications for smart phones that allow you to find parking facilities and the cost of parking in those facilities. The idea is to determine before you leave home or during your trip just where the most convenient and least expensive place to park. Some also allow you to reserve a spot, often in tandem with purchasing event tickets.

I was having dinner with a very knowledgeable industry mover and shaker the other night and this topic came up. Fueled with a few adult beverages we began to gently tussle over the topic. He took the position that using your phone to locate parking and making decisions based on pricing was the thing of the future and we had better get used to it and plan for it. Being a contrarian I took the opposite view.

I held that in general most people don’t think about parking when they leave home for dinner or a show and that they expect that parking will be available when they arrive.  They accept the fact that they will have to pay (probably hate it, but do it nevertheless) and pick the most convenient space available.

My friend said that I was living in the 1960s and that young people today live and die by their smart phone and in a few years finding parking through the use of the phone will be the only way people will do it.  He cited examples of half a dozen companies that provide this information.

We moved from dinner to the event we were attending and found ourselves sitting behind a group of 20-somethings who were chatting amongst themselves about this and that. I jabbed my friend in the ribs and then tapped one of the young people on the shoulder.

“When you go somewhere, say out to dinner or to a club or show, do you plan your parking in advance, and if there were a convenient app on your phone would you use it?”

The young man thought for a minute and said: “Frankly I don’t think about parking. I just go and find a lot and turn in and park. I pay what I have to.”

Granted our survey was fairly limited, but I think that a larger sample would find a similar result. Certainly there will be some people that will use the app and be affected by pricing and location. However generally prices are pretty similar in the same areas — the market takes care of that. We know that pay by phone receipts are a very small percentage of all revenue in cities (in the 1-3 percent range) so people aren’t fighting to jump on board that wagon.

SF Park is relying on apps to help people change their parking habits by providing the location and price of parking space. News reports have noted that even with relatively severe changes in pricing block by block, parking habits don’t seem to change much. Even with a $5 per hour swing in pricing, people still park in the more convenient and expensive spots than walk an additional two or three blocks. One of the reasons may be that they don’t know the pricing difference, that is they don’t check parking price and availability before heading out, and know that its difficult to do when you are underway in your car.

I use ATMs, pump my own gas and often scan my own groceries. I use on line check in when I fly, and use the GPS on my phone when I don’t know where I’m going. I do all these things because it makes my life easier and more convenient. However I don’t really check out parking in advance because, like my young friend mentioned above, I don’t think about it, and I’m in the industry.  I just assume there will be a fairly convenient place to put my car and there usually is and I put it there.

Could this change? Of course. If Don Shoup gets his way and parking minimums go the way of the Dodo, then perhaps there won’t be convenient parking and I will have to start planning for it in advance. However my destination (club, restaurant, shopping area, theater) if it wants my business, will most likely provide for parking, whether its a structure, a lot nearby, or some type of valet operation. If I find parking too difficult, most likely I will car pool or take public transportation, or not go.

But then, that’s just me…Anyone out there disagree?

JVH

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4 Responses to Is This a Solution in Search of a Problem

  1. Hi John,

    I read your blog daily, loved your post on VC funding, but couldn’t disagree more with the above.

    BestParking’s iPhone and Android apps have been downloaded by over 650,000 motorists, with 5,000+ reviews averaging 4.6+ stars. Over 350,000 unique motorists query our database every month via our website, mobile HTML5 website, and mobile apps. We are the #1 parking application (excluding parking games) on both iOS and Android for all metrics (downloads, search placement, and rankings).

    We’re experiencing rapid growth, with tremendous viral word-of-mouth marketing. I agree that in Tulsa, St. Louis, and Baton Rouge, a “parking finder” service isn’t necessary. However, in large cities such as New York, San Francisco, Chicago, etc., the prices DO vary by $20+ between neighboring facilities. In other words, just walking across the street may pay for your dinner or the show you’re attending. You’re point: “However generally prices are pretty similar in the same areas — the market takes care of that” is flat out wrong in all major cities. Just run searches on our website or apps to see why.

    BestParking’s data is also deployed into GPS navigation units including Garmin and Magellan, so motorists are relying our data even if they’re not physically loading our apps.

  2. rta says:

    According to the FHA the average American driver makes 3 car trips per day ( http://nhts.ornl.gov/2009/pub/stt.pdf ), and they estimate there are approx 203 million licensed drivers in the US ( http://www.fhwa.dot.gov/policyinformation/pubs/pl08021/fig4_3.cfm ). That works out to over 609 million car trips per day, and those cars and drivers need to find a parking space for a large chunk of those 609 million times per day (going to the drive thru or dropping someone off doesn’t require finding a parking space).

    Based on simple math it seems pretty clear that an APP has the potential to be successful even if only a very small % of the people making those trips actually use it to find a parking space. If we assume that somewhere around half of those trips are going to require someone to find a space, then even if only 1% of those people used an APP to find that parking space it would be almost 3.5 million hits every day.

    Does it actually solve a problem? Don’t know, but an APP doesn’t have to have wide spread or global acceptance to be successful.

    Your friend was right about people living thru their smart phones. It’s not everybody, and its not even close to being a majority, but the numbers are big enough that it makes it a worthwhile market to pursue. Wall Street, Xerox and IBM aren’t throwing money at this stuff because it’s cool, it’s because there is a good chance that they’ll get a big return.

    Personally I don’t use my phone that way, but I know people who use theirs for something as simple as directions to somewhere they already know how to get to. They just like it, don’t know why.

  3. Stewart Farr says:

    To quote you…
    “I use ATMs, pump my own gas and often scan my own groceries. I use on line check in when I fly, and use the GPS on my phone when I don’t know where I’m going.”

    So you must a vague idea of how to pay, where to pay, where you going…..
    Perhaps your taking the wrong approach to mobile adaptations to parking.

    You think the problem is no one uses an app for parking. Perhaps your right (your not but I will others argue that one)………but as you mentioned most phones are used for more than calling – I bet one of them is useful in parking ;)
    Hell put a towbar on a car and it does more than transport people. Put the web/NFC/wifi/camera on a phone and it does more than “use apps”. Do you think the banking industry just has apps telling you where a bank is????

    Hopefully i have opened your eyes about as to what you have been missing on the peripheral….. the parking industry has been in this space longer than you think :) and it was used every day…..before apps were invented.

  4. Clyde says:

    We just ask the wrong 20 something. He had more to drink than we had and a 20 something really hot date, he was having difficulty thinking about parking and she made it very clear during the questioning that she was getting a headache. We need to expand the survey.

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