SAN DIEGO: The US parking giant Ace Parking says that Uber and Lyft are eating into the parking business – with as much as 50% less traffic at nightclubs and a 25% drop at restaurant valets.
A death knell for paid parking? No, Ace and others say they are going high-tech to survive.
In downtown San Diego, this trend could colour how much more parking is built, as the city updates its policy this year.
In a September email buried deep in an environmental report, Ace Parking CEO John Baumgardner laid out the ugly truth for the parking business.
At San Diego hotels serviced by Ace Parking, overnight parking has declined 5% to 10%. At restaurant valet stands, business is down 25%.
And, most dramatically, nightclub valets are seeing a 50% drop off.
Homegrown Ace Parking – now one of the largest parking companies in North America and also a fixture in San Diego’s political and business scene – is feeling the impact from Uber and Lyft, the wildly popular ride-sharing services that allow people to leave their cars at home.
Industry experts say the nation’s parking companies are responding to the loss of business by going high-tech, with programs that allow people to track open parking spots and pay from their computers and phones. They hope convenience will persuade people that parking is worth it, if it’s easy and guaranteed.
For consumers, the bright side may be lower parking prices.
Maybe we don’t need to build so much parking?
In downtown San Diego, city planners are looking at the decline as they update parking guidelines – which could lead to changes in how much future parking is built.
“Is this an existential threat to my business model? Or, is there a way to pivot and continue to provide a necessary service?” said Keith Jones, the third-generation managing partner of the Ace Parking empire, in a recent interview.
“I’m a firm believer that the parking-transportation concept will still need experts who focus on it.”
Ace certainly isn’t alone.
In 2017, 68% of business travellers chose Uber or Lyft, while 25% chose rental cars. Only 7% hopped in taxis, according to Certify, which tracks business travel spending.
Uber was rated as the No 1 most-expensed and best-loved of all brands last year, beating out Starbucks, Delta Airlines and Amazon.com, according to Certify.
At San Diego International, there’s some evidence that parking is on the decline, though the numbers are murky because a Terminal 2 lot has been under construction.
Parking revenue has been flat while plane traffic is up 7% so far this fiscal year, said Rebecca Bloomfield, an airport spokeswoman.
It’s a national trend
Parking expert Casey Wagner, who hosts a National Parking Association webinar on the rise of the shared economy, said the numbers point to Uber and Lyft taking a big bite out of the parking, car rental and taxi industries.
“We’ve seen that clearly in hotels, the travel industry, the impact on rental cars and taxis, short-term airport parking, restaurants and bars,” said Wagner, chief operating officer of Walker Consultants in Houston.
As goes San Diego, so do other metropolitan areas, said Jones. Ace Parking has seen similar declines at its 750 parking operations from Washington, D.C., to Portland, Oregon.
In the national picture, Jones said, the decline at hotels for overnight cars is more like 15% to 20%.
What’s a parking company to do? Ace and other parking chains are fighting back with technology.
“They are looking to compete with the convenience factor – parking reservations, parking on demand, communicating with apps,” said Wagner, the industry consultant.
“If I know that I have a space that’s a block away, if I’m the designated driver, or I’m going to make several trips, that makes more sense for me than trying to organise two or three people to Uber or Lyft.”
Technology may make us like parking again
Here’s how Ace Parking’s leadership sees the future.
A parking website would show the consumer that there are 10 available stalls here, or 50 stalls there. It would also show the price. The consumer pays online and scans a cellphone when arriving at the garage.
“You’re not just going to show up at the airport and go, ‘I know there are a bunch of flights to San Francisco.’ What I strongly believe is, we need the same mentality when it comes to parking,” Jones said.
“So it’s ingrained in your decision-making processes that, before you leave for your destination, that you are able to tie in” to a parking scenario.
Ace Parking is in the middle of trying to modernise its operations to make that happen, Jones said – though the effort can complicated by the details of ownership. The bottom line is, who pays for the cost to upgrade the technology: the property owner or the operator?
“Out of the 750 properties we are involved with, almost every one is different, based on this owner, this institution, this municipality, the way they are structured and what they want,” Jones said.
In San Diego, Ace has contracts to operate parking at many public properties, including Petco Park and San Diego International.
Competition = lower prices
But if parking is still more expensive than an Uber ride, consumers will likely vote with their wallets.
Jones and Wagner both predict that ride-share competition may push down parking prices.
“(Parking companies) are looking at what the cost is to park, versus Uber,” Wagner said. “They need to be aware of what’s going to help them maintain their revenue stream.”
What Ace and other parking companies can’t compete on? How Uber and Lyft remove the temptation to drink and drive for some users.
In New York, for example, ride-sharing services are credited with reducing alcohol-related accidents by 25% to 35%. However, other studies have questioned the correlation.
“Ace fully supports transportation options that help make our communities safer,” Jones said. “If this is a competitive advantage for ride share, then I support it.”
San Diego’s downtown planning agency is eyeing these parking trends, as well.
Goodbye, valets and new garages. Hello, drop-off lane
Civic San Diego is in the middle of updating downtown’s five-year comprehensive parking plan. Changes could go to the city council this year.
Already, the city is experimenting with a designated pick-up, drop-off lane for ride-share cars on Fifth Avenue in the Gaslamp Quarter, after a study determined that a community valet wouldn’t be successful.
Currently, developers are required to supply a certain amount of parking spaces in a new building.
“We are looking at whether those ratios should be lowered,” said Brad Richter, a Civic San Diego vice-president.
Ride-sharing is one factor, but the biggest point is that downtown is becoming more dense, which means people can walk to jobs and stores more easily without needing cars.
Something else under consideration: Should the city should fund any more public parking?
At two current public garages downtown, monthly customers are still going strong but special-event revenue has dropped off.
Two more public garages are planned at 7th and Market and underneath East Village Green park. Those seem to pencil out based on analyses in the past few years, Richter said, but officials will be taking a hard look at demand for future projects.
“Given the increased popularity of the ride-share services, do you need to provide as many public garages?” Richter said, outlining the debate. “You don’t want to over build.” — The San Diego Union-Tribune/Tribune News Service