Maximizing the Value of Now – The ROI of Digital Parking Solutions
August, 2022
Paid parking has always played a central role in helping customers and businesses make better use of limited, high-value spaces. But the way we interact with the world and do our day-to-day business is fundamentally different than it was even a decade ago. Connected digital experiences and mobile payment are reshaping customer behaviors and the way organizations engage with them.
Digital transformation is having profound, long-term effects on the parking industry - especially for operations not currently using smart parking solutions. Accelerated, in part, by the pandemic, mobile and online payment is more widespread than ever and continues to gain steam as a preferred payment method.
Updating paid parking technology is one of the many ways parking operations ensure their infrastructure meets the needs and expectations of modern customers and businesses. Now, more than ever, digital parking solutions are offering distinct advantages for parking operations looking to increase revenue, reduce operating costs, and capitalize on future opportunities.
Mounting Costs of Hardware-Reliant Operations
Most parking operations have the unenviable job of considering the potential costs and risks of any new technology before it’s implemented. Until recently, digital parking solutions were seen mostly as “nice-to-have” but unessential. However, the rapid acceleration of digital transformation and evolving customer expectations has revealed a few areas where operations without digital payment solutions tend to struggle:
Added Strain on Hardware Upkeep
Without a mobile payment option, the yearly cost of ownership of on-street hardware like meters and pay stations naturally increases. More parking demand adds costs for routine upkeep and maintenance. Money spent on parts, receipt paper, management software, data and integration fees, along with other incidental costs will continue to put a strain on operational budgets.
Increased Labor Costs
Increased reliance on hardware along with the necessary staff to handle payments can also lead to much higher labor costs overall. A significant portion of operating expenditures comes from regular manual tasks like cash counting, emptying meters, or routine maintenance. Additionally, special events that often require extra parking staff can multiply long-term labor costs.
Compliance-Related Losses
Without the visibility and data of digital systems, much more time and effort are spent on compliance-related issues and manual enforcement. However, money lost from lack of compliance isn’t just a result of manual processes or disjointed systems. Often, the reasons why people don’t comply with policy are more innocent. Confusing signage or not having time to physically go to a meter to extend parking are both common situations where a lack of compliance loses money.
Cash Shrinkage Risks
“Cash shrinkage” is the polite term for petty theft that is unfortunately commonplace in cash-based industries. Even though most people use credit cards these days, cash shrinkage still accounts for a sizable amount of lost money, especially after special events with lots of cash lots.
Lack of Operational Flexibility
The pandemic demonstrated just how quickly the unexpected can transform parking needs. While that is an extreme example, the needs of public spaces are constantly shifting. For hardware-reliant operations, policy and rate adjustments often need to be applied to every machine. This lack of flexibility makes it hard to proactively and equitably meet emerging curbside challenges in a timely manner.
Long-Term Benefits of Mobile Payment
In today’s connected technological landscape, digital parking solutions are increasingly essential for maximizing efficiency and value in a modern parking program. Implementing a mobile payment solution improves the customer experience while also creating ample opportunities to increase revenue, streamline operations, and make better strategic decisions.
Reduced Hardware and Labor Costs
Having mobile payment can help parking operations significantly reduce overall labor and maintenance costs. It’s worth noting that this is true even if a digital payment option is only supplementing, not replacing, existing hardware. We’ve found that once people use a modern mobile payment option, they tend to prefer it over a meter. Ultimately, this leads to a reduction in wear and tear and emergency maintenance. Additionally, using digital payments for events or parking extensions for zone parking decreases the amount of cash handling and other associated labor costs.
Streamlined Enforcement and Better Compliance
Backend flexibility and integrations with existing systems allow parking operations to manage enforcement more efficiently and consistently. Automatically tracking parking sessions closes a number of compliance loopholes, like parkers abusing time-limited parking policies or getting free time off a previous parker’s session. The convenience of mobile payment for things like on-demand parking extensions helps increase compliance while also encouraging higher transaction volume per session.
Flexibility to Maximize Curb Value
Many modern mobile payment platforms integrate with existing backend systems, making it easier to find new ways to maximize revenue. A digital payment option for things like event parking or digital permits is user-friendly, reduces manual labor, and can be set up quickly. More flexible backend management allows for quick rate and policy adjustments to account for any changes in curbside use.
Increased Visibility of Usage and Transactions
Unfortunately, many parking operations don’t have a unified source of data for parking inventory, usage, and transactions. This can make it difficult to make equitable and effective policy or rate adjustments. The ability to integrate disparate backend parking systems helps drive operational efficiencies and create unified visibility of parking data. With better data, parking operations of any size can better communicate policy and make more transparent, data-driven decisions.
Partnering With Forward-Thinking Technology Partners
Contactless payment is increasingly vital to meeting modern consumer expectations, maximizing revenue, and streamlining operations. However, choosing the right technology partner is equally important in ensuring a parking program’s long-term success. When looking to implement a mobile payment option, there are a few key points to keep in mind:
More Features - Not Lower Price: Many parking operations have learned the hard way that offering a low-cost solution often translates to a sub-par experience for both customers and staff. Convenient, added-value features that people enjoy using are the biggest drivers of adoption, which is essential for future growth. Partner with vendors who actively invest in product innovation and operational support to drive long-term success.
1- Flexibility is Key: Technology and consumer preferences change constantly and the needs of parking operations vary drastically between locations. Technology partners must be flexible enough to help parking programs maximize the value of both their current infrastructure and to create growth opportunities.
2- Long-Term, Collaborative Approach: One of the distinct advantages of implementing mobile payment is that it requires little to no investment. But there’s a big difference between simply rolling out a digital parking solution and ensuring it continues to meet your needs in the long-term.
Rolling out a digital parking solution has quantifiable, long-term benefits for parking operations of any size, from large cities to municipalities and universities. As connected experiences continue to become the norm, collaboration between parking operators and technology providers will be essential to fully take advantage of what’s happening now - and whatever comes next.
Matt Brooker is Regional Sales Manager for ParkMobile. Email him at matt.brooker@parkmobile.io.
