Business & Tech

SCOTT KIRSNER | INNOVATION ECONOMY

Why technology hasn’t solved our parking problems

Parking apps have been of limited benefit to drivers looking for open spaces in congested areas like Boston’s Newbury Street.

David L Ryan/Globe Staff/File

Parking apps have been of limited benefit to drivers looking for open spaces in congested areas like Boston’s Newbury Street.

A few years back, it seemed like one of the perennial headaches of urban life — parking — was about to be vanquished by the equivalent of an extra-strength aspirin.

Startups installed sensors in the pavement that would alert your smartphone when a space opened up, or hired armies of valets who would scoot over to pick up your car and whisk it into a garage. One company, FlightCar, even made use of your vehicle when you left it in an airport lot, by renting it out to incoming travelers — and giving you free parking and a car wash in exchange.

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Many of the companies, including FlightCar, have since gone out of business, or discontinued their original services while rushing to figure out something else that might work.

Parking, it turns out, is an especially vexing problem to solve — in part because the way we get around cities is so much in flux.

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It was 2013 when Uber launched its lower-cost UberX car service in Boston. (Before that, Uber only offered pricier town cars). Lyft followed shortly after. So in 2014, as many of the parking startups were promoting their apps, they were competing with two very deep-pocketed companies that were pitching chauffeur services, and had millions of dollars to spend on marketing. Why drive your own car if you could go from Cambridge to Beacon Hill and back in an Uber for $20?

By October 2015, Uber reported it had served 28 million riders in Massachusetts. Disruptors, it turns out, can make life difficult for other disruptors.

Startups like San Francisco-based Luxe tried to compete by offering new users $30 in free parking, and daily rates that felt like a steal. You could use the Luxe app to have a valet pick up your car, stash it in a garage for the day, and then return it — with a maximum daily rate that would never exceed $25. Compare that with 90 minutes in the Prudential Center’s garage, which will set you back $30.

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“I remember the joke around town was that everyone was parking on the venture capitalists’ dime with Luxe, because even the everyday consumer knew that the prices were too good to be true for the company to ever make money,” says Braden Golub, founder of SPOT, a Boston parking startup. The first time I used Luxe, I even got a free T-shirt that said “We Pahk Your Car.” That was in June 2015; Luxe discontinued its Boston operation in January 2016.

SPOT, meanwhile, is growing. It runs a marketplace for private parking spaces, allowing the owner to rent them out by the hour, day, or week, similar to what Airbnb does for spare bedrooms. Unlike Luxe, you do the parking yourself. The company has six employees, and has raised $1.6 million in funding, according to Golub.

FlightCar, headquartered in San Francisco, made its entrepreneurial path even steeper by trying to build a business around airport parking. Customers would show up at a FlightCar lot, leave their car, and get a ride to the terminal. The company would try to rent out their vehicle while they were away. But airport authorities, it turns out, like to tax car rental agencies and regulate everyone that picks up and drops off passengers at the terminal, which FlightCar was doing. After spending $40 million, and facing a lawsuit from the San Francisco Airport, FlightCar shut down last July.

Co-founder Rujul Zaparde, who put a Harvard University acceptance on hold to start the company, now works as a product manager at Airbnb. He observes that parking is not a very “scalable” business, which makes the economics challenging. “Parking a car requires one human at a time, and thus can’t be made much more efficient with scale,” he says. That’s different from Uber and Lyft’s carpooling offerings, which can pair two or three riders with similar routes, or a meal delivery venture that can transport several dinners at once, Zaparde says.

A City of Boston experiment with “broadcasting” information about available spaces in the Fort Point Channel neighborhood ran from 2013 to 2014, in partnership with a Silicon Valley startup called Streetline. “The sensor tech is good but not perfect,” explains Kris Carter, co-chair of the Mayor’s Office of New Urban Mechanics. Sometimes, he explains, the information about an open space just took too long to be displayed by the mobile app — which meant the space would be filled before the driver arrived. (That was the case when I tried the app in 2014. My own eagle eye delivered better results.) Carter says that it was also difficult to get a lot of drivers to download an app that only contained data about 330 available parking spots in just one part of Boston.

Carter says that a different kind of sensor is now being used to monitor how many vacant parking spots there are on the street. And the objective has changed: pole-mounted sensors are now being used to raise or lower metered parking rates based on how many spots are available. That, the city hopes, will ensure that a space is more likely to be open if you’re willing to pay a higher price. Carter says that could cut the amount of time drivers spend circling the block hunting for a spot, which would help reduce traffic.

SpotLight Parking was hatched on the campus of Tufts University in 2013; it has raised about $500,000 from investors, according to co-founder Michael Miele. The company ran a beta test in Boston to see whether it could help drivers save time by avoiding that seemingly-endless search for a space in city garages. You’d use the SpotLight app to let the garage know you were getting close and request a valet. Then a garage employee would come out to take possession of your vehicle.

SpotLight tested a $5 or $10 surcharge for the service, but it didn’t take off with users, and garage attendants weren’t wild about doing one more job — even though they could earn a tip, says Miele. SpotLight ended its valet parking test in May 2016, but Miele and co-founder Karan Singhal are working on another tech offering for garage operators, which they hope to test later this summer.

Silicon Valley investor Semil Shah observes that the billions of dollars being spent to develop self-driving vehicles is another factor casting a shadow over the whole business of parking. (Shah is an investor in Luxe.) That, in combination with app-summoned car services like Uber, “creates fear in the venture [capital] space to invest” in parking startups, Shah explains.

One other dynamic that Shah highlights is an expected decline in vehicle ownership among young people, especially in big cities where the parking business is concentrated.

I asked Miele, 25, whether he owns a car. He said that he does, primarily to get to business meetings and garages around the city. Among his peers who live in the city, though, he says “close to zero percent” own cars. “The only ones who do are salesmen who drive up to Connecticut or New Hampshire every week for their jobs,” he says. “That’s about it.” Instead, twenty-somethings in the city rely on Uber and Lyft — both of which are developing self-driving technology that will enable vehicles to run more or less 24/7. Those vehicles will have no need for a parking spot, only a garage in the outskirts of the city where they’ll recharge (or gas up) and be maintained.

It’s possible that, given some time, the headache of Boston parking will go away on its own.

Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner.
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