Is it time to open the market to more than one provider of Mobile Apps?

May, 2019

We are now seeing municipalities, universities and hospitals turning to the private sector to take over existing on-street & off-street parking operations under long-term agreements. This has happened in large and small cities across the U.S., like Chicago or Ohio State University. Typically, the private partner undertakes to operate, manage and improve the facilities against an upfront payment and retains a piece of the parking fees, most likely the private operator has an exclusivity agreement with a mobile app, and the user does not have to pay a convenience fee, there is no extra cost for the user.

Currently, most municipalities in the U.S. have an exclusivity agreement with pay-by-phone apps for on-street payments that charge a direct convenience fee to the users.

Why is this?

As consumers, we all like to have different choices/options, whether it’s hailing a car or flying. If a user wants to fly from DC to Chicago, there are several options to fly, from different airports (Reagan, Baltimore, Dulles) as well as the use of different airlines. The decision might be based on time, loyalty programs, value added services, but it is mainly based on cost, and this decision is done by the consumer.

As consumers, we all like to have different choices/options, whether it’s hailing a car or flying.

Can we apply these concepts to on-street parking payments in the U.S. cities? Of course! Why not?

Governments should provide different options (possibly 3 to 4 choices) to the consumers and the users should have the freedom to choose between different providers, cities within the U.S. and in other parts of the world are already doing it. Madrid Sao Paulo, Mexico DF, even Montgomery County MD is now using more than one app…. Users can make their own decisions and choose whoever they consider the best mobile app, for them. This will allow users to get better prices and services from the providers.

Benefits are clearly seen, open competition forces mobile apps’ companies to increase the quality of service, provide a better customer experience and offer more competitive prices. Mobile app companies will also have the option to participate if they chose to. The perfect example is the taxi disruption when companies like Uber or Lyft have entered the car hailing industry: the service is now cheaper and much better, but most importantly, the user has different options. The market will determine which companies will survive providing the service that the users want and the ones who cannot generate the usage will then face business decisions on the value of competing in that location, as always, the market will balance itself.

Municipalities and universities in the U.S. should start thinking about applying the same logic to the on-street mobile parking payments: users will clearly benefit from these decisions: competition will bring new value-added services, better quality service for the customer experience and more competitive prices.

Luis Garma
Mobile Smart City Chairman