Tuesday, March 25, 2014

And here comes the Parking Revolution!



Television New Zealand missed the point here with this news item.  Its not that the car park has sensors or there are no barriers or its a Pay by Phone car park site alone, no this is the first 'dynamically priced' car park in NZ.

Now most people wont understand what that means but they need to because this means you are now only ever going to pay for parking, exactly what it is worth!  No more over-priced or under-priced parking, just parking charged at the correct value.  Wow.

Dynamic pricing in parking means that the price will move with the demand, that is, if the car park is empty, the price will drop and if the car park is full, the price will rise.

I said this was a revolution.  How is this a revolution I hear you ask?  Well, in two ways it is a huge change in the parking industry and the consumers need to note this.

One, all organisations that don't use this method of charging will be found out.  They will be identified as lazy or just not caring enough about the user to amend the prices to actually what the parking, on that day, in that location, is worth.  Those that act like a monopoly will be forced eventually to change or hey will suffer ridicule from the public.

Two, the public will not have parking to use as its subject of folly any more.  The emotion that most people attach to parking will be removed.  The emotion is attached to parking because some organisations that manage parking have mis-managed the pricing of it.  Ask yourself, if an organisation just adds CPI (inflation index) to a price, is there really competition here, are we as consumers really getting the best price and is the inflation adjustment related to anything other than revenue gathering?

In a fully functioning market where consumers get the best price related to what they want to buy, that is low prices if they want a slap up job or the best price for the best widget, parking in some quarters has been a fixed price, one price for all and unrelated to the value you get for the time in that car park   No wonder everyone has been emotional about parking.  Amend the price to relate it to demand, like almost every thing we buy in the world today, from petrol to broccoli, and people will understand why they are paying the price they do, and that will remove the emotion.  We may not like the price but we will understand it and who doesn't like to get  a bargain, especially in parking.

And here comes the revolution.


Read the Story and Watch the Video Here.

3 comments:

  1. Assuming that this system will someday become city wide. Let's say i have been parking in that particular area for months, arrive early in the morning (6am) because i start early, there have always been plenty of parks so no problems. The following week i arrive same time but now the carpark is full because everyone is trying to get cheaper per minute parking and because i don't own a smart phone i wont be able to park there anyway?!?. My alternative now is to park maybe 4 blocks away from where i work and put some coins into the meter for the day or i go and buy a smart phone (and arrive at work at 4am to beat the rush) If the hospitals in NZ adopt the same system (and we always follow the ozzies) will that mean that those who can afford a smartphone will be at an advantage to where they can or can not park? 60% of people who visit hospitals are low income earners and will end up having to park further away. Those that can afford a smart phone (probably hospital staff) will now park closer to their work place putting visitors further away. Car park barriers provide a means to control areas which this new system cannot deliver. A very thought provoking subject Kevin don't you think?
    Somehow i think the mobile phone companies stand to make a lot of money from this.

    That's my 2 cents worth anyway....or is it 1.5cents because i arrived here early ? :)

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  2. Hi Iain,

    Thanks for the comment.

    Dynamic pricing has the advantage of being able to move cars around (geographically or in time zones) to utilize less attractive car parks (or times of the day), for a cheaper price. This makes the 'whole' more efficient and in fact you will be able to get more cars in to the same number of spaces or to park the same number of cars in a reduced number of spaces. This final suggestion is the favourite of Councils, for example, struggling with vehicles on major transport routes, as you can park the same number of customers, and remove the spaces to off-street.

    Parking 4 blocks away is exactly what you want to achieve, ….. for the right price of course. If the price you are paying 4 blocks away is the same as the price where you actually want to park then that creates the traffic jams and congestion. Councils again are the major contributors of traffic congestion through poor parking planning, not traffic or transport, but this is a recent understanding so may take a while to permeate those who can change it.

    For an enclosed system like a Hospital or a site that has a major Community Access aspect to it, then you should offer the choice of methods, not just Pay by Phone alone. The next big thing in parking is the ‘Integration’ of the many systems that will allow the Pay by Phone, barrier gates, pay and display, sensors, GPS, RFID etc etc, to all work together and be integrated into a single system. The main thing is that is they all fit into a single system, no matter where the data comes from, then the advantages of ‘dynamic’ pricing can be used.

    Its always good to talk parking thinking …..

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