Lessons from PIE for a Visitor from Africa

May, 2019

The 2019 Parking Industry Expo, held in Chicago last month, was an eye opener for first-time attendees. Many realized how similar the issues affecting the parking business are across the USA, and identified numerous lessons from the event that could be replicated in budding parking markets such as Africa.

For some of us, attending the 4-day event, under a cloud of chilly mornings, was an initiation into an industry that impacts every facet of any country’s economic and social fabric, and was an opportunity to confirm how our world grapples with similar transportation challenges. We heard wonderful proposals and case studies on how to get our vehicles efficiently moving around, safely parked and even generate good profits for those in the parking industry’s supply chain.

Talking with some of the more than 1,000 participants and agents from the nearly 140 parking and service equipment suppliers on the sidelines of this year’s PIE show, it emerged, as it has probably in previous shows, that the U.S. is one of the growing parking markets in the world. However, some hard-to-die old practices still persist in the states, including some that are much like those facing institutions in Africa.

For some of us, attending the 4-day event, under a cloud of chilly mornings, was an initiation into an industry that impacts every facet
of any country’s economic and social fabric.

The challenge of fixing fair parking rates, privatization of parking services, enforcement, role of emerging technology in the industry, impact of global oil prices and urban population growth, and midwifing the smart parking/cities concept dominated the discussions and networking sessions.

The U.S. is a big parking market compared to Africa, and hence there could be a big variance on the size of the problems that these two markets face, although during many of the PIE sessions some similarities stood out.

Take the example of Chicago, where the consortium operating the city’s parking meters, Morgan Stanley Infrastructure Partners, is installing new pay boxes that are said to be more tech savvy than the existing ones.

Those from outside Chicago, and the U.S. in general, learned from the PIE proceedings that in 2008, the city leased its 36,000 parking meters to a private operator for 75 years after the local council accepted the deal on condition that $1.157 billion was paid in advance. It has become apparent from some participants that the Chicago parking meters deal may not be easy to amend, despite growing anger among inhabitants, and flaws that have been unsuccessfully challenged in a court of law.

Chicago has a population of more than 2.7 million and is clearly too big to be compared to Msunduzi Local Municipality in South Africa’s Kwazulu Natal province, which has a mere 600,000 people.

But at one time, the two cities needed funds that could not be generated internally. Both realized how lucrative parking can be, especially if the potential of on-street parking is harnessed. They both decided to seek private partners to run their parking services.

Chicago leased its parking meters in 2008 for seven and half decades, while Msunduzi, which has no parking meters, but does have marked parking lots, contracted a private entity, Panzascore, in partnership with Johannesburg Dynamic Parking Solutions, to operate the services in 2013 for three years. 

The Chicago concession, despite the mounting agitation against it, is still intact. Meanwhile, the Msunduzi parking services contract, under which Panzascore was to generate an estimated $13,700 annually, collapsed even before the end of the three years. But give credit to Msunduzi for attempting a parking service option that large cities in Africa, such as Johannesburg, Nairobi, Cairo and others, dare not risk taking.

Should the difference between the success/failure of the two contracts be judged on the basis of contractual value, the size of the cities, or probably, the legal structures under which Chicago and Msunduzi local authorities are based? What lessons, if any, can be learned from these public private partnerships?

In a past interview, Panzascore linked the collapse of the contract to “lack of enforcement by traffic officers,” a topic that was canvassed at this year’s PIE by various participants during the discussion on how to hire and manage parking talent.

Furthermore, some of participants at PIE alluded to the challenge of enforcing parking regulations and rates in the U.S., although that varies from one institution to another depending on whether it is a municipality, university/college, shopping mall, airport, or hospital, and whether parking services are operated by a public or private entity. 

There was talk on the sidelines of PIE, and even during some of the very engaging seminars, on the level of utilization of the estimated 800 million parking spaces in the U.S., which translates to an average of 2.5 per a person. Some of the figures mentioned include the estimated 75 percent of U.S. workers who drove to work two years ago, far higher than the 30.7 percent of all South African workers who drive to their workplaces.

An interesting point of discussion in one of the sessions during the PIE was whether the many parking spaces available in the U.S. are constructed based on market demand or compelled under law that requires parking facilities in commercial and residential buildings. Whichever explanation is applied, it was clear from the speeches and discussions that the increasing number of people and vehicles in the U.S. will have a direct impact on both on-street and off-street parking, a topic I drew a parallel with Africa.

Currently, 40 percent to 50 percent of Africa’s one billion people live in urban areas. The figure will rise to 75 percent by 2050, according to some analysts. For both the U.S. and Africa, the urban population growth and a surge in number of vehicles on the road is likely to have an impact on regulations regarding inclusion or exclusion of parking facilities, especially in residential areas, as authorities seek for more land to accommodate additional urban dwellers.

Although the uptake of technology in the management of parking services in the U.S. is further ahead than in Africa, proceedings at PIE seemed to show the North American country has a lot catching up to do, especially on the controversial issue of how to integrate a parking operator’s system with that of a technology solution provider without triggering issues around intellectual property rights. 

But still, parking markets such as Africa, which urgently need forums like PIE, will have a lot to learn from the U.S. when it comes to leveraging parking technology to boost the industry with innovations such as smart parking. At least, Ethiopia has taken the lead in Africa after introducing automated parking using Chinese technology, which enables to park cars up a steel structure building using an automated lift.

Going forward, both the U.S. and Africa are experiencing growth in ride hailing services and expansion of mass transit systems, and the discussion continues to be what impact these developments will have on the parking industry in coming days.

Shem Oirere is Parking Today’s on the ground reporter in Africa. He can be reached at shem@shemoirere.com.