Can the Smart Parking Industry Carve out a Space for Itself?


Searching for street parking in a crowded city ranks somewhere between an evening at the laundromat and a root canal. Simply put, it’s no one’s idea of a good time.

Beyond the tedium of it all, drivers cruising in search of a space are also a major cause of urban traffic congestion. In fact, says Ryan Citron, a research analyst with clean technology market research firm Navigant, studies have found that people looking for parking are responsible for roughly 30 percent of traffic congestion in downtown areas.


Parking spots in San Francisco can be both hard to find and precarious.

Recently, though, the combination of smartphones and sensor technology has made possible new “smart parking” solutions wherein drivers can use apps to find and, in some cases, even pay for parking. Pilot programs in cities like Los Angeles and San Francisco have found that such technologies can significantly reduce traffic congestion while also upping municipalities’ revenues, Citron says.

Yet, he notes, high upfront costs and a lack of awareness have thus far kept such programs from truly taking off.

In Los Angeles, the Department of Transportation’s LA Express Park program covers more than 6,000 parking spaces across the city. Each space features a wireless sensor that lets users know when they are open, along with rates based on current parking demand in the area. Since launching in 2012, the program has reduced congestion by around 10 percent and decreased average parking prices by 11 percent while raising overall parking revenues by 2 percent, Citron says.

“In practice, it has worked quite well,” he notes. However, while cities including Pittsburgh and Indianapolis have implemented more modest smart parking programs, funding challenges have thus far limited the technology’s adoption, he says.

LA’s Express Park program has reduced congestion by around 10 percent and decreased average parking prices by 11 percent.

“It hasn’t really taken off,” he says, citing high upfront costs as the primary reason. “I’m not so sure this doesn’t make economic sense for a lot of cities, but it’s just getting that initial funding to pay for everything.”

Once sensor, installation, upkeep and other costs are factored in, a typical space costs around $200 to $300, Citron says. And while Los Angeles received significant federal funding for its system, “absent that kind of funding, it’s difficult for cities to be willing to put up the money to get this type of project going,” he says.

Additionally, local governments can be slow to approve such programs, Citron notes. “It can take a long time for cities to decide even if they are going to do something or not.”

This, he said, has led smart parking companies like San Mateo, Calif.-based Streetline, perhaps the most prominent U.S.-based smart parking firm, to target markets like college campuses and transit centers.

Corporate campuses have also become a prime target, Citron says. “Large corporate campuses have been using the technology because they know if it takes an extra 10 minutes for employees to find parking then it costs them X amount of dollars. So they have increasingly been adopters.”

The industry is also exploring alternative business models, he says—for instance, charging lower upfront costs in exchange for higher monthly software fees or allowing cities to use their expected future savings to fund the initial investment.

“We are seeing some more interesting business models out there in the industry, so I think that could really help,” he says.

Your days of endlessly circling the block, in other words, could be numbered.


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