An Operator Speaks His Mind...Has The Era of the Cigar Box Finally Come to an End?

January, 2003

Years ago when you parked, you pulled into a parking lot and the attendant issued you a ticket; if you wanted a receipt, he pulled a piece of the ticket from the drawer or off your car and hand wrote a receipt. Fast forward 50 years, and although there is an abundance of new technology available, the above scenario is still used in many locations. The parking industry has been one of the last to move forward with technology -- all of that, however, is beginning to change.
The parking industry has always referred to the above situation as a "cigar box operation." While that type of operation has long been perceived as the norm in our industry, it is slowly starting to change. With the ever increasing sales taxes, city taxes, county taxes, parish taxes (for those in the South), and use taxes, along with any other agency that feels they deserve a piece of the parking pie, operators such as those in San Francisco are being forced to change their operation to comply with new city ordinances. Why?
Because a few operators, who are not 100 percent honest, have not reported their revenue (and thus tax figures) correctly, and as a result are cheating the cities out of thousands, if not millions, of dollars each year -- or so the cities say.
How as an operator, and more importantly as an industry, do we combat this image problem? The answer is clear -- through revenue control equipment and technology. If every facility we operated had revenue equipment that provided a printed receipt, the general public and public officials would have much greater confidence in parking operators than they currently do. But how do you improve your company's image, and the industry's, without spending huge amounts of money to install equipment on every location?
The simple answer is working with equipment manufactures and suppliers to deliver equipment at a reasonable enough cost to make its purchase cost-effective. This could mean a lease program where the operator places very little down, and leases the equipment for a small payment each month. In many cases, if you manage a location but do not lease it, you can present a similar scenario to the management company or owner of the facility, making a case that the increased revenue from the new equipment will more than cover the cost of the monthly lease payment.
I fully believe that our industry has started moving toward the day when large facilities will be fully automated with little or no personnel on site; rather, personnel will communicate with the customer via a two-way radio or cell phone. They may be in the facility, down the block at another facility, or sitting at a desk in an office miles away. While the customer service aspects of these types of facilities may suffer minimally, the net revenue to the owners is tremendous, due to the lack of payroll associated with cashiers and attendants. At the same time, consumer confidence increases, and the general feeling is that the operator is receiving 100 percent of the money collected.
This image is further enhanced when the operator uses an armored car service to collect and deliver the sealed canisters from the pay on foot stations to the local bank. Under this type of scenario, the parking operator is becoming more and more a true management company that has little or no access to the revenue control equipment.
Similarly to the large facilities, more and more operators at flat lots are moving away from the cigar box and towards a pay and display unit, or similar type of technology such as handheld computers and scanners or belt-issued tickets. Some operators at attendant park lots are even going so far as having the customer pay in the pay and display units while the attendant parks and retrieves the car. The result at many of these locations is increased revenues for the operator and the owner of the facility.
This scenario is being repeated in all major cities today. The smaller cities, for the most part, are still using the old honor box and cigar box operations, but we are starting to see that even these smaller cities are starting to look toward improvements. San Francisco already reports that other cities are requesting copies of their ordinance for enactment.
The net result is that as more and more companies begin to install these automated revenue systems, thus moving away from the cigar box to the complete collection of revenues via technology, operators will have no choice but to follow suit and install state-of-the-art equipment. Otherwise, they risk losing their competitive edge to other operators. By using this equipment, operators hope to prevent ordinances similar to that in San Francisco being enacted in their city; in other words, the honest operators are trying to improve their image, while simultaneously attempting to police their industry, without government intervention.
As we move into this automated world, operators must always remember one thing: revenue figures still need to be audited by the operating company in order to ensure that they are being reported correctly. Is the slip generated by the machine the actual amount of revenue received? Most of the time it is, but sometimes these new machines do have bugs that keep the totals from being correct. So, be sure to check your automation carefully. Make sure also that you check the services of third-party suppliers, like your credit card companies. Is that computer and service transmitting your account correctly each night, or are your revenues being left in the machine?
Finally, who should we turn to when looking to improve the image of our industry? The answer is the local and national associations and groups that support our industry; specifically, PIE, NPA, IPI, and your local associations. They need to work with the operators to keep them apprised of the latest technologies and ordinances, while molding the image of the industry and raising it above the cigar box level.
While the era of the cigar box is slowly coming to an end, I am sure it will never be extinguished completely, as there will always be someone who believes that it is still the best way to control the revenue on a parking lot.

Tom Phillips, Jr., is Vice President
of Systems Parking, headquartered
in Chicago. He can be reached at taphillips@systemparking.com