The future of parking (near and far)
If the future of personal transportation is scooters and self-driving cars that are most always on the go, that will leave a lot of empty parking spaces open for new uses, like redevelopment, food delivery hubs or vehicle recharging centers.
Why it matters: The disruption in urban transportation is creating opportunities for innovative entrepreneurs who see value in repurposing the lowly parking space for the digital era.
A number of companies are already reimagining how parking space could be used...
1. ParkJockey: The Florida-based company’s ambition is to sell space access to businesses such as ride-hail, car rental and food delivery.
- To do that, it wants to sell an “operating system” (hardware and software) to garage owners that will turn their real estate into a service that customers can pay to access.
- Late last year, ParkJockey acquired 2 large parking operators as part of a financing round led by SoftBank.
2. City Storage Systems: Best known as former Uber CEO Travis Kalanick’s new undertaking, the company is also in the business of repurposing parking lots.
- It's been buying up properties, including parking garages, that it will turn into commercial kitchens for delivery-only restaurants and other consumer services.
3. SpotHero: The company is focused on a parking spot booking app (for human drivers), but it’s already thinking about the arrival of robot drivers.
- It’s been working with partner lots to upgrade some of their technology to handle autonomous vehicles, which CEO Mark Lawrence tells Axios can also have immediate benefits for human drivers.
- “Every location that we make [AV]-ready today is a better experience for our consumers now,” Lawrence says. “We’ve done studies that show that people are willing to pay more for an automated experience versus one that’s not.”
Meanwhile, some real estate developers also are planning for a future without as much parking space.
- AvalonBay Communities, which is working on an upcoming residential complex in Los Angeles, has designed a large parking garage that they anticipate converting to recreational purposes like a gym and theater, and even some retail and restaurant space.
- The owner of the Grove and other upscale shopping centers is working with Google to eventually convert to more restaurants and stores, according to the LA Times.
Yes, but: Developers already have tough decisions to make in regards to their investments, which typically have a 30-year horizon, as they juggle near- and long-term uses.
- Construction costs for above-ground parking structures can cost $21,000 per space, and another $500 per year to maintain each space. Meanwhile, parking costs an average of $2 per hour in the U.S., but can reach $33 for 2 hours of parking in New York.
- And converting garages is expensive: In Pittsburgh, it cost $17 million to convert a 3-floor garage into more than 60 apartment units.
The bottom line: These companies may have to make big investments years before it's clear if they made the right bet.