The infrastructure involved in the entire transport industry is significant: roads, toll booths, towing companies, speed monitoring infrastructure, gas stations, intersections and traffic lights, breathalyzers, dash cams, insurance providers, parking lots, judiciary infrastructure, car wash services, car repair and servicing providers, car dealerships and resale services, and more—much, much, more.
All this infrastructure has been developed with significant investment over a number of decades. And takes a significant amount of effort and expense to maintain.
I happened to be reading the book Three Men on the Bummel (a not so famous sequel to Three Men in a Boat), the other day, and I came across a passage that described how significant the effort in creating and maintaining the transport infrastructure has always been. Published in 1900, this book describes the three famous friends—George, Harris, and old J—-going for a bicycle tour through the German Black Forest.
In one particular scene, the friends pass a man who is watering the road with a hose, which the three friends criticize as not being the right method. In their opinion, the British system of watering the roads with a wagon going about sprinkling water is better.
This is of course all from the era of cycling, when the roads needed to maintained in a different way. Once the automotive industry came up, the infrastructure evolved appropriately to accommodate people driving cars rather than riding bikes.
Now, the cost of creating and maintaining this infrastructure is not trivial. In the course of the next few weeks, we’ll do a simple series where we examine these various aspects of the transport industry and infrastructure, and discuss how digital transformation is impacting the various aspects of it in specific ways.
Before we begin, let’s clarify what digital transformation really means in this context. When you talk to marketing folks, digital transformation is typically stressed as a multi-channel or omni-channel opportunity—your customers are all on mobile, so you should be there too. But this evolution is far more important—and far more fundamental—than just one more channel. It’s not a simple linear evolution from phone lines to fax to websites to email to mobile app. Or whatever that order might be. Digital transformation is a series of deep, fundamental changes taking place in how businesses organize themselves, how they interact with the world, how they consume and process information, and the bearing it all has on the types of problems they are able to solve and the methods they have at their disposal for solving these problems.
But enough introductory talk. Let’s begin this series with a quick discussion of the business of parking.
In a recent blog post Zeljko Svedic argues that parking lots are a waste of space. The average private car, he reminds us, spends 95% of its time parked somewhere. In comparison, a shared car with 50% usage will need parking space only half the time. And if this happened across an entire city, the city’s need for parking spaces will be reduced by more than ten times. Here’s the math:
That’s an approximation, of course. Accounting for rush hours and other factors, perhaps achieving 50% usage may be impractical. Still, shared cars will reduce the need for parking spaces significantly, and free up a lot of urban space. Zeliko also anticipates the impact of self-driving cars on parking, but I want to discuss self-driving technologies separately in another post, so I’ll not go into those arguments for now.
Inefficiencies around parking spaces relate to not just money (average monthly cost of parking in downtown New York was reported to be $533 in 2011, while some parking spaces in London have sold for well over a million pounds) and space, but also time. Research shows that on average, 30 percent of the cars in congested downtown traffic are cruising for parking.
And we all know from personal experience that when we head downtown, we account for about ten minutes for finding parking and then walking to our actual destination. And we feel extremely lucky if the job is done in one or two minutes instead of ten.
We know there is a lot of hype around electric cars and self-driving cars, and the battle for turf between Ola, Uber, and Didi Chuxing, but the parking industry isn’t trivial in size by any means. The entire industry, worldwide, is said to be worth $100 billion. A 2011 report by Cisco [PDF link] points out that just within the USA, the total cost of personal transportation amounts to $3 trillion per year. Parking represented a staggering 12.5 percent of this total, or $374 billion. This cost estimate includes the actual cost to park and associated inefficiencies such as the urban traffic congestion resulting from people looking for parking.
The road transportation industry is getting revolutionized at a very fundamental level, and the rise of ride sharing services such as Uber, Lyft, and Ola is a testimony to that. But what innovations and disruptions can we expect in the parking space (sorry about that pun) specifically? What would the digital transformation of this industry look like?
A noteworthy experiment is the project SFPark, launched by the city of San Francisco. Launched in 2011, the project involved installing meters that charge variable price. The meters deployed under this program also had sensors to report the occupancy of each space in real time. With this, the city collected information on curb occupancy rates, allowing it to adjust prices in response to occupancy rates. The program launched as a pilot that ran till 2013.
Unfortunately though, a Dec. 2013 notice declared that: “As of December 30, 2013, the parking sensors in the street will be turned off and their data feed will no longer be available as parking sensor batteries have reached the end of their useful lives. This means that the real-time information on parking space occupancy will not be available for mobile apps and similar uses.”
It’s great that they ran a pilot and gathered some valuable data, but I feel like a lot more could have been done if the program had continued.
A lot more is being done, on other fronts. The National Parking Association, in its just concluded annual convention and expo which took place in Atlanta, had talks and panel discussions focusing on the role of big data, the impact of car sharing and self-driving cars, the role of app and cloud focused technologies in driving innovation and delivering efficiencies, and much more.
I didn’t attend the convention or anything (couldn’t find parking!), but I enjoyed watching this video, which gives a quick tour of the expo area. Lots of ventures looking to take some innovative approaches to making parking more efficient. check it out: