Pay-on-Foot: A Parking Evolution

January, 2005

We have had an evolution in pay-on-foot and automation in general over the past few years, and it's been all to the good." That's how Jeff Miller, District Manager for Ampco System Parking in Los Angeles, sums up his experience with the technology. "It's not coming; it's here."
Miller, who supervises the Ampco Systems' locations from Santa Barbara to Long Beach, told Parking Today that he currently has 18 to 20 customers who are either installing, ordering or considering POF -- plus, he has half a dozen such systems online. Five years ago, that number was zero.
"The technology has come a long way in the past decade," Miller says. "When the first POF system was installed in Los Angeles in the mid 80's, it didn't take credit cards and gave change in Susan B. Anthony dollars. Someone would put in a 20 and get back 17 Susan B's. Not good. Plus, even into the early 90's, the systems were unreliable. We didn't see POF again until the late '90s. The manufacturers just didn't have the experience with the U.S. market, and the machines weren't up to par."
But things have changed. According to Miller, many reputable companies now provide POF equipment. When he went out to bid at Bank of America Plaza in downtown L.A., he had six on his bid list.
"We interviewed, involved our customer, and finally settled on a supplier," Miller says. When asked the reasons for his selection, he smiles and shrugs. "There were a number of factors, but in the end, cost always makes a difference."
His experience has been that a main factor in owners' reluctance to purchase POF has been the "seemingly" reduction in service. "They think that if you take the cashier out of the lanes, you have less service. What they are finding out is that the reverse is true."
The prevalence of ATMs, pay-at-the-pump gas stations and even self-scanning at supermarkets has changed consumer attitudes, he says. "People find that using a machine is quick, easy and preferable to dealing with a human being. Plus, there is another factor ..."
At Bank of America Plaza, as with many high-rises, there is an exit issue. There simply aren't enough lanes to handle the nearly 2,000 cars that leave each evening. A daily parker looking for their ticket or money or asking for directions can virtually close a lane for a few minutes. The frustration builds on the monthlies stacked behind them.
"We found that after the system was installed, tenants found that exit times were much faster and told us they felt the new procedures had a much higher service level," Miller says. "That's a hard sell before the fact, but with experience at other locations, we are able to do it.
"Owners -- and operators -- are always a bit reluctant to change. They are afraid that their tenants will reject the new program, find the building less desirable and move out. We have found that the reverse is true," he says.
At Bank of America Plaza, Ampco System had the perfect location for POF. Everyone in the building had to pass two spots to get into the garage. He put one POF machine at each location. It also had the benefit of many more monthly parkers than dailies.
"Frankly, we probably could have gotten by with one machine. But having two does give the parker a choice. We have only a couple of hundred daily parkers each day, so there is seldom a lineup at the machines.
"I will give one bit of advice to those considering POF: If you are going to automate, then AUTOMATE. Get the booths out of the lanes. People see the booths when they enter and assume they can pay on exit. Also, go with credit cards, both at the POF machines and at the exits. If you try a mixed POF and cashier, your chances of failure are great. Everyone will use the cashier."
In the B of A system, if parkers don't pay at the machine, they may insert their ticket and credit card at the exit lane, and within a few seconds, the transaction is complete. "Even in the credit-card-at-exit situation, the transaction time is considerably less than dealing with a cashier."
The easiest part of convincing the owner is dealing with the cost. With the reduction in staff, the payback on the system is less than two years, Miller says. Of course, there are other benefits, including removal of all cash from the lanes and a decrease in the time it takes to audit.
In a nearby location, the operator has a large VIP valet operation. "We keep the cashier terminal at the VIP valet location to provide the extra service to the valet customers. They have little to do while they are waiting for their cars, so the cashier works there. At B of A, we have valet, but it's limited, so we direct parkers to the POF, which is nearby the valet station, or they will pay at the exit."
Credit card acceptance has been growing rapidly in the industry. There are locations where fully 80% of the daily transactions are by credit card. "This takes cash out of the system and decreases our costs," Miller says. "It's expensive to count and deposit cash. There are charges for armored cars and bank charges. Taking credit cards is the way to go."
(When conversion to a 100% credit card facility was discussed recently at a meeting of parking operators and owners, the concept was met with horror. However, when one owner was asked the percentage of credit card usage at a certain location, he said 90%. The group then switched and noted that his location was a credit card-only location already. He just needed to change the signs.)
Miller notes that when these POF systems are installed, tenant training and signage are extremely important. "We spent the two months between ordering and installation holding familiarization sessions with the tenants. We explained how validations would work [bar-coded coupons are used] and how they would benefit from the new system. The vendor helped with this process, providing Powerpoint explanations for us to use.
"You can't overdo the signage," Miller says. "You must communicate from the moment the visitor enters the garage that this is a pay-on-foot facility and to take their parking ticket with them."
(Bank of America Plaza uses Skidata revenue control equipment.)

John Van Horn is editor of Parking Today. He can be reached at editor@parkingtoday.com

Side Bar

Benefits to Pay-on-Foot:
1. Lower personnel costs.
2. Faster exits.
3. Reduction in cash in lanes.
4. A machine never calls in sick.
5. Better cash control and audit procedures.