Cleantech Market Intelligence
You Paid How Much for that Parking Space?
Smart parking management looks to be the next big market opportunity in smart cities solutions. Pike Research covered the topic in last year’s Smart Cities and Smart Transportation Systems reports, as well as our recent Smart Cities and Transportation webinar. As my colleague Eric Woods remarked, parking may be a mundane issue, but it’s a major headache for drivers in congested cities – not to mention a potential lever for cities looking to modify traffic patterns and driver behavior. UCLA professor and parking guru Donald Shoup estimated that 950,000 excess miles a year are likely driven in Los Angeles due to people looking for free or cheap metered parking.
Thanks to the increasing availability of wireless networks, sensors, smart meters, and smartphones, a handful of cities are implementing smart parking systems that can manage parking in real time. San Francisco was one of the first U.S. cities to give it a try, with help from a U.S. Department of Transportation grant. The pilot project, called SFPark, was launched in April 2011. The city deployed around 12,000 sensors in curbside and garaged parking spaces. The city also deployed roadway sensors so they could gather data on whether congestion was affected by the new parking system. Technology partners included ACS, StreetSmart Technology, and Sensys Networks for the sensors; IPS Group and Duncan Solutions, for the smart meters; and Oracle, for software and the data warehouse. SFPark created a real-time parking availability data feed and developed web and smart phone apps that map parking availability in real time.
The tool for changing driver behavior, besides providing information, is dynamic pricing. In the pilot areas, the city varies pricing based on an analysis of demand at various times of day. The city promised to change meter prices no more than once a month, and by no more than $0.50 per hour lower or $0.25 per hour higher. Currently, the meter pricing ranges from $0.25 an hour to $6.00 an hour.
I must admit, I was surprised to hear how high the parking price can go. This brings up one of the potential problems with dynamic pricing. Not only are people being charged for something that they are used to thinking of as a cheap public good, but the cost can potentially become unaffordable for some people.
So I was also surprised that San Francisco residents, not known for their quiescent nature, haven’t protested. This is likely because they recognize how bad the parking situation is, and also because the city held extensive public meetings to explain the project and incorporate public feedback. For other cities considering dynamic pricing, I would highly recommend visiting the SFPark website, which has a wealth of resources on lessons learned.
Other cities are trying various forms of smart parking, not all of which include dynamic pricing. In 2010, Los Angeles deployed a pilot program using technology from startup company Streetline. Streetline has been on a roll recently, announcing collaborations with IBM and Siemens. Other major multinationals like Veolia and Telvent are offering smart parking solutions. As more results come in from pilot projects, this segment of the smart cities market promises to take off.