Marrying Parking Performance with Affordability

For many public sector bodies and private sector organisations parking is an important revenue generator. Operating a car park, however, brings with it a collection of challenges, from selecting and acquiring the right system through to managing operating costs and ongoing costs of service and maintenance. It also requires engaging with multiple parties to facilitate different payment methods, and defining strategies for enforcement and for building in additional services to keep the car park competitive.

The first hurdle facing an asset owner or operator is the initial capital expenditure required to procure the equipment to control and collect parking revenues. This can often be beyond reach. Local Authorities, NHS Trusts, and other public sector bodies not only have to work to tight budgets, but they also face close scrutiny on how public money is spent. Similarly, within the private sector controlling capital expenditure has always been important but COVID-19 has brought this into sharper focus as organisations deal with the fallout of lost consumer spending and changing behaviours both during and after the pandemic.

There is an answer – one that is already proven in many other sectors – and that is a subscription-based model.

Subscription models in other walks of life are very familiar, whether it is for a mobile phone contract or TV, music streaming or gaming. They are also finding their way into new industries such as automotive, where vehicle manufacturers are offering subscription-based car ownership. And now we can apply the same principles to the parking space.

A subscription-based parking model gives car park owners and operators the opportunity of having high quality, reliable parking technology delivered ‘as a service’. Parking-as-a-Service (PaaS) provides all the ‘value’ of a premium parking solution but at a fraction of the cost and gives owners/occupiers the chance to have the best performing technologies in car parks where they might have ordinarily opted for a cheaper alternative.

Smaller car parks commonly end up with a barrierless, Pay & Display solution because decisions are made which prioritise ‘affordability’ rather than ‘suitability’. They are often linked to Automatic Number Plate Recognition (ANPR) technology, which involves payment via vehicle registration, but in many cases the solution is not fit for purpose.

The principal disadvantages centre around the customer experience. Customers can inadvertently miss the signage and use the car park thinking it is free only to receive a penalty charge and never use the car park again; conversely the threat of enforcement can push people to limit the duration of their stay, and curtail their shopping trips, which in turn leads to a potential revenue loss.

Pay & Display systems also bring with them the onerous need for onsite support to help with faults and lists tickets. And many Pay & Display machines are also old and unreliable, with small keyboards that can be hard to read, leading to further mistakes and confusion. Many are not in service, or taken out of service, because of vandalism.

To rid themselves of these issues operators have looked to Pay by phone – and while the logic for doing so is a sound one it is less than ideal for users. Pay by phone can be very confusing, especially for those less-familiar with app-based systems including the elderly and can drive customers away from using a car park, rather than towards it.

ANPR-based systems are certainly on-trend, and when they work well, can work very well indeed. But the benefits of the barrierless solutions appear to be largely to be weighted in favour of the Enforcement Operators who often fund free parking systems and profit from issuing PCNs. While they are comparatively low cost to purchase and install, poor reliability can lead to considerable expense in terms of equipment downtime and the resultant loss of revenue. They rely on vehicle registrations being entered accurately (is it a nought or a capital ‘O’?), and upset customers when mistakes are made, leading to a poor customer experience overall. There is also a wider ‘cost’ in relation to reputational damage and customers choosing to vote with their feet.

In its simplest form, Parking-as-a-Service is a barrier-based solution combining technology and service, where the responsibility for installing and maintaining the parking equipment rests entirely with the manufacturer and for which the operator pays an agreed, monthly fee for five-years.

The model instantly removes the principal hurdle to take-up – capital expenditure – as no upfront payment is required. A fixed, monthly subscription cost is better for cashflow, and provides the operator with total visibility of ongoing cost and return on investment. All of the service, maintenance and software upgrades are included in the cost, which means there are no unpleasant surprises, and PSP and banking – another potential obstacle – is all handled by the provider.

At a practical level, PaaS is a cashless solution, removing the need (and cost) of cash collection, and removing the security headache of having cash on site which impacts insurance premiums and eliminates the likelihood of fraud.

In terms of technology, the operator has a choice of entry system, exit system, and payment system. They can choose between gates and barriers of different sizes and the type of ANPR camera mount best suited to their requirements. Packages can include intercom as part of a portfolio of bundled hardware, alongside a maintenance package and transaction (i.e payment) bundles. Once the technology is chosen, the customer is connected to APT SKIDATA’s cloud parking platform.

For a simple one entry/one exit solution for a car park of 200 spaces, the monthly subscription could be as low as £1,250 per month. The revenues generated by such a car park, however, could be as high as £16,000 per month, giving a return on investment of eight times the monthly fee.

Using our single entry/exit car park as an example, the customer journey is a simple one. On arrival, they drive up to the barrier, the ANPR system records their license plate, and the barrier opens. On exit, they again drive up to the barrier, the ANPR system recognises their license plate and a cost is displayed on the exit terminal screen. The driver taps their card on the contactless icon, payment is acknowledged and the barrier opens for them to depart. Payments are collected through the PSP into the acquiring bank.

PaaS allows for many advantages. Operators can build on their current car park usage, potentially working with entertainment venues in town centres, or patient and visitor reservations in hospitals, by adding a reservations platform to guarantee the customer a parking space when they arrive. Alternatively, they can offer discounts on parking through validations provided in nearby offices, shops, restaurants, cinemas and theatres. Discounted parking always appeals, and a key advantage to PaaS will be the opportunity to deliver the same levels of sophistication that the larger car parks are able to offer, but at a fraction of the price.

The perfect add-on to a car park is EV charging and with PaaS operators can integrate EV charging stations with the parking infrastructure to allow drivers to pay both for parking and EV charging in the same, single transaction upon exit.

APT SKIDATA has been at the forefront of developing new solutions to old problems and with Parking-as-a-Service it is ultimately turning a premium parking solution into a much more viable option for smaller car parks up and down the country. With a subscription-based model, the industry has the opportunity to transform the way public sector bodies and owners of smaller private car parks see, experience, and procure parking systems enabling them to realise new revenue streams, and provide a better customer experience without taking on a challenge and a cost that is beyond their comfort zone.

What is required is a little imagination, and the willingness to embrace a new way of thinking.