CHICAGO--(BUSINESS WIRE)--Driving Toward Efficiency, a newly published report from DePaul University’s Chaddick Institute of Metropolitan Development, finds that SpotHero and other parking booking intermediaries are providing a social benefit to cities by reducing excess roaming, fostering more dynamic pricing, and serving as de facto regulators of product quality. Under conservative assumptions, the report found that booking intermediaries reduce the social costs generated by excess driving—including congestion, safety impacts and emissions—by $1.35 per trip, saving the city of Chicago at least $10 million over the course of one year.
Traditional off-street parking is inefficient. Drivers lack awareness around where their options are located and what they cost, and they aren’t equipped with the technology needed to compare them. As a result, they circle in search of a spot – and keep circling in search of a better deal – averaging an excess 1.22 miles per trip. Inefficiencies also extend on site to manual payment processes that are time-consuming (like waiting in line at a pay-by-foot kiosk) and inconsistent (with many locations still only accepting cash). In the last decade, parking booking intermediaries have entered into the market to help improve the customer experience by empowering them to pay for and reserve spots at convenient off-street facilities – but their overall value to cities has been largely overlooked.
“Parking inefficiencies have negative implications for not just individual drivers, but for the city as a whole. Without transparency into parking options and prices, drivers are left to roam the streets in search of a better deal, increasing congestion in some of Chicago’s most populated areas,” said Joseph Schwieterman, professor in the School of Public Service and director of the Chaddick Institute. “Parking booking intermediaries are successfully addressing these challenges by playing a role similar to apps like OpenTable or GrubHub, which pool food options into a single platform. Parking booking intermediaries like SpotHero give drivers visibility into what’s out there and allow them to drive directly to a spot—eliminating the need for endless circling.”
The report sought to foster a better understanding of the private and public impact of parking booking intermediaries in Chicago. The findings demonstrate that by digitizing off street parking inventory and balancing supply and demand, parking booking intermediaries are helping operators maximize inventory and more closely align their decisions with public goals.
- Reduced vehicle travel on city streets. With pre-booked parking, drivers are routed to an exact address, eliminating the need to circle in search of parking. Additionally, reducing the price of off-street parking to levels below those available at parking meters further discourages roaming for street parking—a contributing factor to urban congestion.
- Improved utilization of space. Parking booking intermediaries surface inventory that could otherwise be overlooked, easing congestion while maximizing the urban space already dedicated to parking, reducing the need to develop new parking facilities.
- Increased tax revenue. Parking is among the most highly taxed goods and services in Chicago, which levies a 22% tax on daily parking on weekdays and all weekly and monthly parking and 20% tax on weekend parking. By helping parking operators maximize occupancy at their facilities, parking booking intermediaries are driving up operator revenue, which in turn increases city parking lot tax revenue.
Parking Facility Benefits
- Maximized utilization of inventory. Intermediaries serve as outlets for parking facilities to list spaces that are unlikely to be used by drive-up customers.
- Increased revenue. Intermediaries can offer algorithms that help facility operators determine their optimal pricing based on shifts in supply and demand—helping facilities maximize their revenue during periods of both peak and off-peak hours.
- Regular feedback. Customer feedback gives facilities critical insight into what drivers want, allowing them to make adjustments to encourage repeat customers.
- Greater choice. Intermediaries give consumers the ability to quickly and effectively compare prices and find available parking without having to toggle between apps or websites. For example, SpotHero has 10x more facilities than that of the largest online tools managed by parking management companies.
- Reduced price. The price consumers pay through platforms like SpotHero is significantly lower than average drive-up prices: 37% lower on average during weekdays, with similar discounts for evening parking.
- National coverage. Intermediaries give consumers a single platform to find, book and access parking across the country, eliminating fragmentation across different cities and states.
- Higher facility quality. Giving customers the opportunity to review parking facilities on booking platforms has resulted in the de facto regulation of facility quality, pushing low performing facilities to improve operations and meet higher standards.
“The strategic importance of off-street parking’s place in the urban mobility mix has been largely overlooked to date,” said Mark Lawrence, co-founder and CEO, SpotHero. “Despite the rapid adoption of shared transportation models – like ride-hailing, fleets of scooters and bicycles – the number of cars worldwide continues to grow and congestion continues to worsen. SpotHero is working to proactively mitigate this problem by leveraging our parking operator partnerships and industry-leading equipment integrations. Our goal is to create and maintain a transparent market that benefits every stakeholder, private and public, including the millions of drivers who use our platform to find, book and access parking.”
For more information on the report’s methodology and findings, visit Research & Publications at chaddick.depaul.edu. Driving Toward Efficiency was commissioned by SpotHero. To learn more about SpotHero’s benefits to cities, operators and drivers, visit spothero.com.
SpotHero is the digital parking leader and the largest place to buy and sell parking in North America. Millions of drivers use SpotHero’s mobile apps and website to find, book and access parking in 7,000 locations across 300 cities. Leading mobility companies use the SpotHero developer platform to power seamless parking at scale for fleets, connected cars, and urban mobility solutions. For more information, visit SpotHero.com.