The Longer-Term Impacts of the Coronavirus on the Global Parking Industry

THE WHOLE STORY STARTED WITH A HYGIENE ISSUE in a crowded place where customers went every day: to shop, to work and to meet people. It was a place where few felt comfortable: the noise, the stench, the unsavoury characters, the evening shadows as the place started to empty - and the compulsion to get out as quickly as you could. It developed into a contagion that few saw coming, despite the warning signs. And as it leaped from individual sites to whole cities, and then across national borders, people realised that things would never be the same again.

While this might be the storyline for a Hollywood drama, or a description of Wuhan’s wet market (where the Coronavirus is reported to have first emerged), it might better describe the commercial parking sector by the end of 2020 - a low-tech, high-friction, 20th Century industry which is struggling for mindshare in the 21st Century. The user experience for parkers over the past forty years has been ugly. Things are about to get even uglier for the parking operators who inflicted that experience on their users. With the exception of pharmaceuticals, food-delivery services and video-conferencing software providers, few industries are likely to emerge unscathed from the COVID-19 pandemic. And while the global parking industry is bracing for sharp declines in parking revenue, the longer-term implications of major cities shutting down for weeks - if not months - could have profound implications on how and where we park our vehicles in the future.

An acceleration towards smarter cities

Will this be a major turning point in the race towards smarter and less congested cities? For all the well-intentioned “smart city” initiatives of the past two decades, few of them have come close to addressing the real problem: vehicle congestion and its negative externalities. The total shut down of bustling cities such as New York, Paris and Rome has been a thunderbolt to our collective imagination: What would Times Square, the Place de la Concorde, or the Colosseum look like without tourists or tires? We’ve just found out - and without the help of Photoshop. “Smart parking” is one of the ten key pillars of any smart city agenda, but how will that agenda be accelerated as a result of this crisis? Cities without vehicles was an imaginary concept until a month ago. Now it has become a reality, and the implications for the parking industry could be profound.

Boom or bust for the automotive industry?

The car manufacturing industry was already doing it tough, as a shift to cleaner technologies and fashionable new brands such as Tesla was gathering momentum. But the prospect of shutting production plants, as national borders close and as social-distancing rules take effect, could push a handful of legacy manufacturers over the edge. Government bailouts will follow, but might not be enough to stem the bleeding. Car sales will plummet, as a global depression takes hold and the question will be asked around many-a-family dinner table: “Do we really need the second car?” A fall in private car ownership would free up many residential parking spaces, and would become a boon to peer-to-peer parking platforms such as KERB. But the opposite could also happen, as a hygiene-conscious public shuns trips to work on dirty buses and trains - in favour of their own private vehicles. Which could see sales of new cars come roaring back, putting additional pressure on downtown parking facilities.

Remote working is here to stay

Has forcing everyone to suddenly work from home let the genie out of the bottle? Tele-commuting wasn’t a concept that sat easily with many employers. People are more productive when they work under the same roof - or so the argument went. Besides, we all need to be in the same room for important meetings. In the space of a dramatic few days, almost every manager in almost every company in the world has had to re-assess those two long-held assumptions. Humans are social animals and most forms of work require at least some collaboration with other humans. But as smart phones and laptops and software such as Zoom have shown us: much of that work probably doesn’t need to be conducted in the same building, and especially not from 9-5. These newly-enforced remote-working arrangements will have far-reaching implications on future work-from-home policies at companies worldwide. And, importantly, on human behaviour. If I no longer need to commute to the city five days a week, do I still need my parking space below the office? And if many of my colleagues are thinking the same (Spoiler alert: they will be), does the company really need 50 staff parking bays?

Of course, when the current Coronavirus crisis has blown over and the wreckage of the global economy has been pieced back together, people will return to a desk in their city. But probably not all at the same time, and most likely in different patterns. For a while, we may see half-empty car parks in downtown locations - leading to more driver choice, and downward pressure on parking fees.

Cramped and dirty car parks may need to lift their game

Parking a vehicle in a tight, basement-level car park was never a particularly hygienic experience. Common among most covered car parks - from Birmingham to Buenos Aires, and from Cleveland to Cairo - “damp”, “dark” and “dirty” are the “3 Ds” that best describe the parking experience (“disgusting” is arguably the fourth, depending on what caused the damp). If the Coronavirus has reminded us of one thing, it is that hygiene matters and that we should tread with caution into unclean environments. Will car park operators suddenly need to raise the bar on the cleanliness of their facilities - and personnel? A nationwide “Car Park Fumigation Program” (CPFP?), with bottles of hand-sanitiser on entry and exit, would be a good start.

Will “social distancing” lead to wider parking bays?

Probably not. But when we do finally return en masse to our cities, and are forced to squeeze our cars back into parking bays more suitable for motorbikes, it will be a stark reminder that, just like sitting in “cattle class” and dreaming of one day being able to occupy a wider seat further up the plane, it would be nice to have the option of paying a little bit extra for a slightly more spacious parking space - and preferably one which was located close to the exit. Valet parking, like Business Class, is not in most people’s price range. There is a gap in the market for a “Premium Economy” parking experience: slightly wider, slightly cleaner, slightly more friendly - and maybe even with a free coffee thrown in? COVID-19 has re-emphasized our need for space. Car park operators would be wise to take note.

The need for better parking data (“Who owns each of these cars?”)

In the days leading up to the grounding of most international flights, airlines started emailing travellers with updated lists of which recent flights were carrying passengers who had since tested positive for COVID-19. Importantly, they identified precisely where the infected passengers were sitting. For privacy reasons, they didn’t reveal the names of those passengers, but they knew who they were. And they could contact recent flyers because they knew who they were, too. They had emails and first names and frequent flyer numbers and travel history for all of their passengers, and they could use that data to potentially save lives. A scenario in which an airline lets people onto a plane without knowing exactly who they are is alien to anyone who has ever flown anywhere. Compare that to the total lack of information on who the 235 cars currently parked in your parking facility belong to. Not only are parking operators neglecting the first rule of business - “Know Your Customer” - and all the competitive and marketing advantages that well-applied principle brings, they are overlooking the safety of the people using their car parks. If I’d parked my car in a retail parking facility last Thursday, and 20 of the other drivers visiting the same shopping mall, at the same time, had since tested positive for a virulent virus, I would quite like to know. But I can’t, because car park operators don’t offer online booking and payment systems, so can’t tell me who is in their car park at any given time. Maybe once things return to normal, the parking industry will take a leaf from the airlines’ playbook, on the “need to know your customer” (particularly when there is public health emergency unfolding).

A move to Peer-to-Peer parking?

The notion of renting out your private parking space, when it is not being used during the daytime or at weekends, has been popularised by platforms such as JustPark in the UK, and by KERB in many countries. But the concept of peer-to-peer parking has never quite taken off to the same extent that peer-to-peer room rentals or peer-to-peer ride-hailing has been popularized by Airbnb and Uber. One of the positives to come out of the Coronavirus crisis is that it has brought communities closer together, and has forced people to re-consider some of the luxuries they took for granted. “Space” is one of those luxuries. Every week, from Monday to Friday, between 8am to 6pm, in every city in the world, tens of thousands of cars and motorbikes need to park somewhere - most of them for the whole day. Between those exact same times, your own parking space probably sits empty under, behind or in front of where you live. The hotel car park next to your office has 37 unused spaces available all day, on the same five days every week. And the shopping mall opposite the main train station has 554 vacant parking spaces that are only full on weekends. Since the Coronavirus became a global crisis, KERB has seen dozens of users who live close to hospitals listing their empty parking spaces on KERB - many of them for free. It has also seen a flood of private parking spaces listed on its platform, as residential property owners, small businesses, sports venues, rural landlords and churches suddenly wake up to the fact that they have under-utilized parking spaces that could be boosting their monthly income. Perhaps COVID-19 will be the wake-up call people needed to realise that no space dedicated to parking a vehicle should ever sit empty - particularly given the chronic congestion that plagued our cities up until a few days ago?

A happy or tragic ending?

We thought we’d seen this movie before, and knew how it ended: We survived SARS, then the GFC, then H1N1. But this time is different. Never in living memory has the world shut down. Major conflicts - when the enemy is visible and understood - have the opposite effect on the economy. But the enemy this time is invisible. It might simply be that the Earth has sent us all to our rooms to think about what we’ve done. Or it might be that the self-fulfilling prophecy that so many have predicted for so long is finally upon us. And as much as we’d all like to press “re-boot” on 2020, or skip straight to 2021, we can’t. We’re going to have to watch this movie to its tragic end.

Whatever December 2020 looks like, the world will be a different place. The scars will run deep, major companies and legacy brands will disappear, and people’s habits and behaviors will have changed (hopefully for the better). Sitting on gridlocked highways, or cruising endlessly for an elusive parking spot, in a vehicle you’re still paying off and probably don’t use for 21 hours a day, may suddenly start to feel like something you used to do last year, but probably shouldn’t still be doing this year. Not after the havoc wreaked by COVID-19. Not after what the world did to itself. The Parking industry of old - like so many industries - will be changed forever.

Rob Brown

CEO - KERB

rob.brown@kerb.works

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ABOUT KERB

KERB is a global-from-Day-One parking marketplace which is aiming to redefine the way people park around the world. KERB is opening up tens of thousands of peer-to-peer private, off-street parking spaces in over 30 countries worldwide. KERB also offers a self-service car park management platform which allows car parks and parking garages around the world to make money from their under-utilized spaces, while personalising the parking experience. Download the KERB app on iOS and Android, or access the KERB website via www.kerb.works to see how KERB can help you save - or make - money from your parking space(s). Alternatively, contact us at JustAsk@kerb.works. The KERB team will help you transform the parking experience for your customers.

KERBside