How profitable are parking spaces

Smart parking : Good business in the tightest of spaces

A driver spends around 100 hours a year looking for a parking space. He covers an additional 4.5 kilometers per trip. Then the car is standing around: on average, private cars are not used for 23 hours a day. In large cities like Berlin, scarce parking space and search traffic are becoming an ever greater problem. Although the federal capital is relatively weakly motorized, more and more cars are jostling in the city. Also because every day a good 200,000 commuters from the surrounding area flock to the city, many of them with their own private or company car. Around a third of city traffic is spent looking for a parking space every day.

In order to get the sheet metal avalanche under control and to alleviate the stress of drivers, companies come up with something on the still young market for “smart parking”. This is made possible by ingenuity and technical progress. Modern cars are like moving computers that are networked with each other and with their environment via sensors, navigation systems and the Internet. This can be used to capitalize on technical services that make it easier to find parking spaces. Or for “shared parking” models, in which available chargeable parking spaces - be they private or public - are shared by several users.

A billion-dollar market is emerging, as the consulting firm Frost & Sullivan estimates: while sales of intelligent parking in Europe and North America in 2014 were a good seven billion dollars, they could grow to more than 43 billion dollars by 2025. The scarcity of parking spaces as a growth engine, especially in global megacities.

Siemens tests in Berlin

For several months now, Siemens has been demonstrating how an intelligent parking guidance system could work on Berliner Bundesallee. Radar sensors were attached to lampposts over a length of one kilometer, each of which overlooks seven parking spaces and the adjacent streets, bike paths and footpaths. The “overhead system” sends real-time information about free parking spaces to drivers via smartphone or sat nav. The pilot project should run until the summer - then it will be up to the State of Berlin or individual districts whether Siemens can do business with its sensor network. "We are planning to be able to respond to possible more comprehensive tenders for commercial parking management solutions by the end of 2016," says Marcus Zwick, Head of Siemens Innovation Management in the Transportation division. Siemens is also in talks or is already on the road with test projects in Dubai and other major cities in Europe. Sources of income lie not only in the provision of the infrastructure, but above all in other services that are generated with the help of the parking data.

But the tight municipalities also benefit, says Zwick. “The system pays off for a city if the infrastructure is optimally used through the routing of the drivers and the efficiency of the parking space management can be increased.” The experiences of other companies with parking lot sensors in the USA are promising: In San Francisco, search traffic has been reduced since 2010 more than 40 percent.

The Berlin Senate is still observing the Siemens pilot project. "We are at the very beginning," says the Senate Department for Urban Development. “A lot still needs to be clarified.” In Berlin there are currently 40 parking zones with a total of almost 105,000 managed public parking spaces. Data on the total number of public parking spaces and parking garage spaces are not available.

Daimler, BMW, VW and many start-ups

The automotive industry and its suppliers have also discovered the “Smart Parking” business area. At the end of 2015, Audi agreed on a joint project with the city of Somerville on the east coast of the USA, in which piloted parking, technologies for swarm intelligence and networked traffic lights are to be used. Since 2011, BMW has been researching solutions for more convenient parking and faster finding of free parking spaces in cooperation with the leading provider of real-time traffic information, Inrix. Title: "Dynamic Parking Probability Forecast". At the beginning of the year, Bosch presented its concept of a networked search for a parking space at the technology trade fair CES in Las Vegas, in which cars detect gaps on the roadside and enter them in a database that other drivers use when looking for a parking space for their vehicle can. According to the ideas of the Bosch engineers, the car should become a rolling sensor.

Daimler and Volkswagen are now also integrating private parking spaces into their mobility apps. In this peer-to-peer market alone, Roland Berger expects a business volume of two billion euros by 2020. A cake that numerous start-up companies also want to cut a piece from. ParkHere, UnserParkplatz.de, ParkU, Ampido or the company ParkingList, which was launched in Berlin in 2013 - there is a similar idea behind the mobile business models: opening up the huge, unused stock of existing parking spaces in private underground garages or on company premises for the general public.

Business models still lack critical mass

Take ParkU, for example: The online parking exchange offers a free app that gives users access to underground garages or reserved parking spaces behind barriers and roller doors. For this purpose, modules (“sesame boxes”) are installed at the parking lot provider, which the ParkU user controls via smartphone in order to open the barriers. The provision of parking spaces is free of charge for the landlord; You can freely determine times and prices. Payment is cashless via credit card or PayPal. ParkU receives a commission for every parking space booking.

"To date, 200 sesame boxes have been integrated into the electric barriers and gate systems of parking lot owners," says a spokeswoman. So there is still a lack of critical mass to make the business model profitable. 45,000 users are registered to date, 5,000 parking spaces from 941 providers in more than 15 cities in Switzerland, Germany, Austria and the Netherlands are currently available. Like all providers in the smart parking market, ParkU is speculating that it will be even tighter in the big cities in the future.

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