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The Spot Market in Parking

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There are a lot of parking apps out there. There are apps that:

  • Tell you what lots are out there and list their prices for your parking period
  • Tell you that and let you reserve a spot, and pay with the app
  • Let you do that and even access the parking lot with the app (lot gate is opened over internet or wifi.)
  • Let you pay for metered parking with the app or a phone call
  • Let people rent out private parking spaces they aren't using, sometimes with a sensor that can tell if the space is free
  • Let people report free street spaces, or automatically report them when they leave them

At CES, I met a company working on street parking, creating sensors that could be put on street lamps and other poles with power to detect if street parking spaces are in use. From this, they plan to direct drivers to streets that have available spaces. The problem is that street spaces often vanish quickly, so they best you can do is direct people to blocks that have a few spaces -- which are often further from where you want to be. You can at least guide drivers away from streets that are fully in use.

We're moving to a world where a lot of the available parking will be managed in some way in a computer database, which will know when spots are taken or free, and may be able to sell them or reservations on them. Today, lots will pre-sell parking or allow it to be reserved, but they usually just reserve some space in their lot, not a particular one.

In time, this should evolve into a real-time market of available parking spaces which can be reserved and bought online. I give this market the amusing name of "The Spot Market." (The original meaning of a spot market is a place for real time trading of financial instruments other than futures.)

The spot market might offer "asks" -- where all parties with slots in spots on offer list the spot, its hours, parameters and price. Somebody wanting to park could peruse that list and chose the best offering. Unlike true commodities, parking spots are not yet all the same to every customer -- you care a lot about how far it is from a spot to where you are actually going.

Alternately the spot market might allow a parker to make a query, "Give me bids on a space for this sort of vehicle for this range of hours within X meters of this location. Then the parker could pick the best from those. Prices would fluctuate for every query, as owners of spots track demand and supply. A parking spot is really a service (or just the short term rental of some real estate.) If it's not used, the value is lost. Some spot owners may be willing to take almost any price if the alternative is not selling the space. Others may not wish to let the value fall. Lot owners also like to price discriminate -- get different prices from different buyers based on their needs and wealth.

Today there are all sorts of strange ways of pricing parking. A few lots charge strictly by the hour, but most will charge an extremely high rate for the first few hours and quickly hit a daily maximum, or simply do only a daily or event rate. Many lots offer an "early bird" discount day rate for commuters to catch them when competition is at its highest.

The spot market could also allow reservations in advance. A reservation might not be free, since it means that the reserved space can only be put to short term use prior to the reservation.

Enter the robocars

The idea of a spot market will change greatly with the arrival of robocars. Privately owned robocars will want to park (wait) somewhere not tremendously far from their master. Even robotaxis will need places to pause during off-peak hours.

A Robocar is a completely different type of parking customer, as I have outlined before.

  • They don't need to park right where they dropped off their user. Distance incurs a travel cost (30 to 50 cents per round trip mile) and a pickup time cost if the owner wants to summon with no warning.
  • If an owner has some warning about when they will need the car again -- even as simple as "I will get off work sometime around 5:30" -- the car can park somewhere cheaply and remotely, then in advance of the expected time, move to somewhere close and more expensive for quick pick-up when the call actually comes.
  • Robocars will park in dense pack "valet" style, in the distant regions of lots not preferred by human parkers.
  • Robocars can leave a spot for another spot at any time, if they see a better offer.
  • Likewise, a robocar can agree to leave a spot at the request of the spot manager, or if the price increases.
  • Electric robocars will have minimal impact on lots, with no emissions.

All this functions -- especially the ability to leave for another spot on demand -- offer the possibility of very different sorts of parking contracts. A robocar might chose from

  • A spot at a fixed rate of 50 cents/hour for exactly 7 hours.
  • A spot at 60 cents/hour for up to 3 to 8 hours.
  • A spot at 30 cents/hour for the next hour which can raise its rate up to 30% per hour in the following hours.
  • A spot at 10 cents/hour right now which can change to any price at any time.
  • A spot from 9am to 5pm but which must be vacated from 1pm to 2pm.

Software for the car can review its needs, the cost of travel between places and predicted future prices in different areas and decide which offer it likes. Reservations might be free, or might require buying the space immediately and paying to hold it while you drive to it.

The bad news for lot owners is that this much efficient competition will lower the cost of parking. Lots will get fully utilized, as long as there is demand, but at a much lower price. Lots will be converted to other uses until the supply drops enough to make it profitable again, but this will take a lot of time -- and the move away from car ownership will keep reducing the demand.

The city and public in the spot market

City owned spaces -- which is to say "street parking" -- should also be in the spot market. They will typically come with rules that require you be able to vacate the space, if ordered, when traffic flow increases. The city might decide to turn a parking lane into a traffic lane by giving such an order. Only robocars would park in those spaces.

Cities will also be able to declare extra lanes of "double parking" and offer them for sale, clearing them as traffic increases. If anybody on the inner lanes wants out, the cars will be required to notice this and move out of the way.

The public can also participate, selling (probably through an intermediary) spare spaces in driveways or on private land. Any old cell phone pointed at a driveway can be turned into a sensor to indicate if the space is in use, or of course your own car, if it's the only thing that uses the driveway, will be able to report when it's present or not. And when it's coming home, it will be able to give the order to vacate the space.

The space in front of your driveway could be managed by the city -- any robocar there must be ready to leave at any sign of another vehicle wanting to enter or leave the driveway. Or the city might give you ownership of it, and the choice of whether to allow this and get revenue from it.

Rulebreakers

People do park where they should not, of course, though robocars will probably never park somewhere their map doesn't say they can. That's one reason it's hard to sell parking reservations today -- you can't stop somebody from grabbing the spot. You can tow them, but that doesn't help the person who arrived with a reservation to find there is no spot.

It's much easier, of course, if all spaces are only offered on the spot market and so the whole lot or section can be marked "reserved" with a strong reputation for towing. In fact, when a robocar is allocated a space, it might be told what other spaces should be empty, and report if they are not empty, so tow trucks come before all the spaces get taken.

It's very difficult to mark all street parking as reserved, but it can be marked as "robocars only."

Street spaces can also be allocated for very short use -- like for a minute to pick somebody up. There could even be a small fee for that.

Better lots for humans

Even human parkers can benefit from a market like this. As most spaces move to the spot market, there will be no more driving around hunting for parking. You'll just know where to go immediately. You can probably even reserve your spot before you leave, so you know you have one.

Comments

Fleet owners won't want their vehicles parked. If the marginal cost of moving one of these vehicles is 30 cents per mile, then they should be willing to operate these robots for a 35 cent per mile price at off-peak times like the middle of the night. Why keep my robot parked if it could earn 10 dollars per hour over operational costs by doing night deliveries?

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