May 16, 2024 - Business

How AI is disrupting parking

Illustration of a parking lot with lines painted with gold, and dollar signs in each one.

Illustration: Brendan Lynch/Axios

This week marks the end of the existence of SP Plus as an independent, century-old, publicly-listed corporation. As of Thursday, it's part of an AI startup that promises to transform the hated activity of parking.

Why it matters: SP Plus operates parking garages — places where humans collect money from drivers. Under its new owner, Metropolis, its 4,000 locations will switch to camera-based systems that recognize individual cars and bill the owners directly.

The big picture: Almost no one likes parking garages, and we generally want to spend as little time in them as possible.

  • Metropolis allows cars to simply drive in and drive out whenever they want, without needing to install any kind of device. It then bills the owner's credit card automatically.

Follow the money: Metropolis, founded in 2017, raised $1.8 billion to be able to buy the much bigger SP Plus.

  • The company paid a 52% premium over the pre-announcement closing price to buy SP Plus, thanks in part to the promise of AI technology.
  • It had just 2,000 employees yesterday. Today, it has more than 20,000.

Between the lines: CEO Alex Israel tells Axios this seemingly lopsided deal should be thought of as a "growth buyout."

  • The idea is that instead of selling his technology to operators, one facility at a time, he can at a stroke acquire more than 50 million customers, all of whom will be able to pay for such services at thousands of locations without touching their wallet or interacting with a human.

What's next: In theory, Metropolis's technology could even be used to identify cars in congestion-pricing schemes like New York City's.

  • But don't hold your breath — Israel tells Axios he has no particular desire to be a technology that millions of drivers resent.
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