Why Does it Cost $70/day to Park in a Secure Parking Space?

Why Does it Cost $70/day to Park in a Secure Parking Space?

Harriet Harvey20th September 2018

The supply of commercial car parking in Australia’s major capital cities is increasingly limited. Growing workforce numbers, CBD residencies and retailing are all contributing to a rising demand for parking spaces.

This is particularly true for Melbourne, Sydney and Brisbane where city councils are working to restrict the number of parking spaces available to reduce traffic congestion. This has increased the time spent cruising for parking spaces which causes additional traffic delays and accounts for almost half of peak hour traffic according to Australasian Transport Research findings. In addition, there are very few new parking infrastructures being built in high demand areas which only reduces car parking supplies.

According to data from Colliers International and Parking & Traffic Consultants, the Melbourne, Sydney and Brisbane CDBs have the lowest ratio of car parking spaces to workers with 14.2, 12.2 and 21.8 per 100 workers respectively.

The Sydney CBD also has one of the highest daily parking rates with an average daily fee of $70.85 AUD. Unsurprisingly, Melbourne and Brisbane follow suit with average daily parking rates of $63.61 and $69.03 respectively.

So why Does it Cost $70/day to Park in a Secure Parking Space?

Secure Parking Pty Ltd and Wilson Parking Australia are the key players in the Australian parking services industry. Despite other companies entering the market, Secure and Wilson Parking still hold majority of the market share based purely on the volume of car parking spaces. They have a monopoly on the market for now which allows them to charge phenomenal amounts to park your car.

Secure Parking Pty Ltd is a car park management company which operates private car parks in Australia and New Zealand. They lease large car parks from building owners and create a convenient parking system for the public to use. There are considerable costs associated with this, such as acquisition, installation of the Secure Parking technology, operational costs, government taxes and levies as well as the owners cut of the profits.

Where does this money come from? The customers.

It is generally assumed that parking for these workers is relatively inelastic due to low supply and the necessity of parking. Thus, majority of the costs are charged to the customer as the fee for parking in those spaces.

In 2011, the Flinders Street Car Park was sold for $28.2 million dollars for 574 car spaces valued at $49,129 per bay according to Colliers International. Already there are significant costs for the owner to cover with revenue from the car park. For casual customers, it costs up to $23 an hour and over $69 per day to park in Melbourne in Secure Parking’s Flinders Street Car Park.

However, there are other business models that significantly reduce the costs of parking for the customer. KERB uses the Airbnb model. With KERB, you can find several affordable parking solutions near Flinders Street for between $15 and $20 AUD per day. A 50% saving.

What makes Kerb different?

Kerb is a global parking app that provides simple and convenient peer to peer parking solutions. Kerb keeps parking prices low by providing users with a platform to lease their car parking spaces to other users. There are no acquisition or installation costs because Kerb utilises existing and unused car parking spaces to help everyday people save money on parking and the owners profit from their driveways and empty car parks.

If you would like to know more about how you save money by renting a car parking space on Kerb, simply visit www.kerb.works/lease-space.

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