ECONOMY

Lex Letter from New York: parking apps make a comeback

Transport updates

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Dear readers,

Recently, the neighbours in my part of south Brooklyn have given my husband a new nickname: Bumper Car Greg. His ability to squeeze our car into the tightest of spaces is not appreciated by everyone on our block.

He doesn’t have much of a choice. One of the silver linings of lockdown last year was that streets and roads were empty. But these days, free street parking has become an increasingly scarce commodity. That means apps that help users find a spot are back in business.

It is not just because people who left the city during the Covid-19 pandemic have returned. The number of parking spaces has shrunk as outdoor dining sheds and new bike lanes take over territory once reserved for cars. At the same time, car ownership has soared. Drivers remain wary of taking public transport. 

New vehicle registrations in Brooklyn were up 13 per cent last year compared with 2019, according to the New York State Department of Motor Vehicles. Manhattan clocked in an even bigger increase of 27 per cent. 

All that circling around the block adds up. One study from 2017 reckons drivers in New York waste on average 107 hours per year looking for parking spaces.

For parking start-ups such as SpotHero, the shortage of free kerbside parking is proving to be a boon.

Launched in 2011, the Chicago-based business works with garage operators across the US. Drivers using its app can see available spots in the area and compare prices. The company makes money by charging garages a commission from every transaction booked on its platform.

The privately held app was among those hard hit by the pandemic. Bookings collapsed 90 per cent between February and April last year as businesses closed and people worked from home. Things started to recover only in March this year — when the vaccine rollout got under way. Since then the recovery has accelerated.

In New York City, reservations for the year to date are up almost 60 per cent compared with last year. In some neighbourhoods, bookings have surpassed pre-pandemic levels. The company, which has raised $118m in venture capital since it was founded, says it expects to turn a profit this year for the first time. 

Competing apps include ParkWhiz and SpotAngels. Another, ParkStash, which calls itself the Airbnb of parking, allows individuals to rent out their driveways or private parking spaces. 

The big question is whether growth for these companies can continue post-Covid.

Before the pandemic, New York’s subways were the city’s most popular mode of transit, with almost 1.7bn turnstile swipes in 2019. The rise of ride-hailing services such as Uber and Lyft have also freed people from the hassle of using their own cars — and in the process reduced the demand for parking spaces.

Much of the parking app industry’s future will depend on whether people will continue to use their own cars heavily when offices reopen.

Mass transit advocates or cyclists are unlikely to feel much sympathy for car owners such as me. But a more efficient parking system is in their interest too. Having fewer people cruising around endlessly looking for a parking spot is one way to reduce gridlock and pollution.

Enjoy the rest of your week.

Pan Kwan Yuk
Lex writer

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