The State of the Parking Industry: Why We Need Innovation
The parking industry is notoriously low-tech. Many off-street parking lots today look exactly the same as they did twenty years ago — if not thirty or forty years ago. But it doesn’t have to be this way.
Let’s look at why parking technology has been so stagnant, and what might be done to implement innovations.
Parking and the failure to innovate
Today’s parking industry is all about figuring out how to sell more parking spaces to more people. The technological innovation that has penetrated the industry oftentimes helps parking managers to optimize their lots and figure out how to price parking.
Practically, what this means is that parking can become a race to the bottom in terms of pricing. Everyone wants to offer the lowest price and fit as many cars into their lots as possible. That’s what drives the industry’s profits. Parking lot operators feel like they have to provide lower prices just to remain competitive. There is essentially no competition on the basis of customer experience, as in most other industries.
There have been a few innovations in recent years. Many commercial parking lots have instituted electronic payment systems or mobile payment. Consumers benefit from the added convenience, and from lower prices.
Still, the overall customer experience hasn’t really been significantly changed by technology. These small innovations don’t do much to address the essential problems that consumers face. It is still really hard to find a universal parking system. Drivers usually have to circle around in search of an open lot with the best price. The overall experience is neither convenient nor enjoyable.
Fortunately, there are ways to improve upon this lackluster state of affairs.
How innovation can improve the parking industry
Although the parking industry might be low-tech now, there’s no reason for it to stay that way. By implementing innovations, the industry can provide a better parking experience for consumers.
Right now, parking lots are competing on price. But what if there were a way for them to compete on experience?
We know that about 30% of city traffic is people searching for parking. The difficulties drivers face finding an open spot are creating inconvenience for everyone. To solve this problem, parking lots should compete on the basis of experience — not simply price.
For most drivers, the biggest parking problem is simply finding an open spot. With modern geolocation technology, it should be possible for drivers to locate an open spot without all of the headaches and driving around in circles.
If the parking industry can provide users with that kind of seamless experience, they can stop trying to compete on price. To most drivers, the assurance of a guaranteed spot is worth paying a little extra. Consumers will opt for a better experience, and overall congestion is reduced. It is, in short, a win-win.
Technology can also be used to enhance the on-street parking experience. On-street parking has suffered from the same lack of innovation that we see in off-street parking. Sure, many cities have done away with rusty meters and implemented shiny new payment systems (although parking meters are still far too common). But again, that doesn’t really address consumers’ core needs.
The technology to make parking better and more profitable is here. We just need to seize the opportunity.
