Is the Parking Industry Facing an Existential Crisis?

September, 2017

Assurances that cars aren’t going away, complaints that not everyone can ride a bicycle, and warnings about the potential dangers of robotic drivers underpin the argument against such a notion. It’s certainly possible that, in 2035, Americans will own private cars and drive them alone at the same or greater rate than they do now; after all, no one knows the future.

However, that particular future is one in which we’ve failed completely to address climate change, traffic violence and urban sprawl.

Arguments for the status quo are cynical bets against our creativity and ingenuity, paying out only if we resign our children, and theirs, to living in a dystopian future.

Fortunately, recent history provides good reason to be optimistic about our ability to transition to more sustainable transportation and development patterns. The last decade has brought networked technological advances that have made it practical and convenient for more and more people to go without personal car ownership.  

Per-minute rentals of Car2Go Smart Cars or ReachNow BMWs and Minis are available in many cities. Getaround and Turo provide hourly and daily rentals of your neighbor’s cars via a peer-to-peer rental model. ZipCar, U-Haul and traditional car rental companies round out the options that are enabling regular folks to forego car ownership. As these markets mature, millions of Americans will have access to a short-term rental car at any time of day in their city.

Car-share services serve as a safety net for those who are skeptical about reducing, or eliminating, their personal vehicles. Concerns about moving furniture, going to the coast or the mountains, or taking a pet to the vet are alleviated when there’s a shared car for every purpose just around the corner.

But the true transformative value of these services is apparent when people realize that without the burden of a personal car in the city, they are free to mix and match on-demand transportation modes that best suit the needs of each trip. This in turn leads to a healthier, less stressful, and more sustainable lifestyle ̶ and one that saves money at the same time.

Transportation network carriers such as Lyft, public bike-share systems and public transit round out this new transportation ecosystem that was vastly less practical and convenient even five years ago.

So what does this mean for the parking industry? Sure, people will still own cars for many years, but can the industry sustain reductions in parking demand as cities promote and subsidize denser development patterns in walkable, transit-rich locales?

Technology is also making the more efficient use of our current parking supply possible. Shared parking and peer-to-peer parking rental will increase the effective supply of parking, while generational trends, and the availability of other travel options, work to lower demand.  

These changes are happening now, without the need for fully-autonomous vehicles, and there’s little reason to bet against further disruptive advances in technology. Many new cars sold today can park themselves, and likely any new car produced in 2020 should be able to navigate a retrofitted parking garage and park centimeters away from the other cars. How many more cars will fit in existing parking structures when robotic valets can stack cars and have no need to open doors or walk to the stairwell?

Finally, let’s consider a less often mentioned application of autonomous piloting technology: autonomous transit. Critics of AV hype often claim that cities will need to be retrofitted, at great expense, to provide mapping and sensors to allow cars to safely navigate themselves. They also claim that the mixing of human and robotic drivers will be chaotic and too risky. Even if these claims are true, cities can retrofit fixed bus routes and provide transit-only lanes for autonomous buses to travel on.

Without the cost of healthcare, pensions, training and overtime for operators, transit agencies will be able to rapidly increase the quality and level of service in our cities. When buses are running frequently, 24 hours a day, and in their own lanes, transit becomes a much more competitive alternative to driving alone and a socially collective solution for the transportation needs of many people who cannot drive.

It is possible that robotic chauffeurs are only a generation away, and with them will come tectonic shifts to the parking industry. However, very disruptive changes are happening right now, and the pace of their adoption is only likely to increase.

When developers consider building structured parking, is it likely to be profitable enough to meet their pro-forma if effective demand drops by 25% or more? Will operators, saddled with paying off construction costs, be able to compete with older garages with lower operating expenses and increased capacity due to robotic valets?

The new reality is that the parking industry should expect big changes, sooner rather than later. And while parking as an industry might be long from its ultimate demise, all involved should be planning and preparing for a very different future from what we see today.

Tony Jordan founded Portlanders for Parking Reform, “a grassroots advocacy group focused on implementing progressive parking policies through education, organizing and direct action.” Contact him at twjordan@gmail.com.