Monday, March 18, 2013

Parking Operations Design - A Lesson

I had an interesting email conversation with a General Manager (names removed of course) of a major parking equipment provider the other day. It started out as a discussion on the article about supply and demand economics, or actually the theory of Constraints, and how to get to 100% occupancy. The discussion ended up with a summary of how I see the purpose of parking and how the purpose of parking serves the city. This is a sort of step by step guide to designing a city’s parking operation. These tips will also give you the ability to micro-manage parking.
Parking operations systems can be simple. Here are some of the basics;
  • The purpose of parking is to support economic activity. An economist will argue that even a visit to a park, University or Hospital has an economic impact. Christchurch City Council's Long Term Plan has some wording around 'Community Outcomes' for parking, but in the end, they all add up to mean, at its highest level, supporting economic activity.
  • Measure what is happening on the street. On-street parking is the bellwether of all activity in the city. Its the nervous system of the body of the city. If construction or retail picks up, it will be reflected on the street. If the area becomes dead, the street will tell you. You can measure the fact that a new off-street car park opened by the data you get from the on-street machines, and then you amend your prices. Measuring what is happening on the street will tell you how to approach your pricing. You also don’t need to purchase sensors to start with. You can measure occupancy and utilization (Utilization is occupancy over a period of a day). 
  • Set up zones or precincts of the right size and shape to affect the parking load or activity in the local area, be it a mall, a university or a commercial district. Christchurch has 16 (draft) zones. Having zones that are too big creates abstract pricing. Abstract prices will support activity somewhere in the city at some stage, but will be too high in some and too low in others. Prices must be just right ... all the time. Having smaller zones allows you to micro-manage your pricing and modern technology can now help you to micro-manage parking. Zones also allow you to set zoned permanent on-street parking or residential parking in certain zones only.  
  • Link pricing to occupancy. Managing your demand to 85% occupancy, not higher or lower. This will make sure that the retailers are happy as you can't get more customers into a retailers car park than the capacity of a car park. Extra cars are just people circulating and not shopping. Retailers rarely understand this. Retail's issue is one of capacity and management of that capacity, not price. If shoppers don't come, drop the price. If they do and its overcrowded, raise the price. You still cant get more customers in than the number of car parks, so price is irrelevant other than to maintain occupancy. 
  • Enforce to support parking operations. The purpose of enforcement is to support the parking operation's designed plan. If the plan is not right, it only hinders economic activity because too many tickets are issued. One of my mantras is 'your level of parking enforcement is equal to the level of mis-understanding of your parking operation'. Enforcement also gives you some good signals that the parking operation is not right, by the number of tickets being issued or a change in the number of tickets being issued. 
  • Get the parking decisions closer to the operation. Politicians generally only know about price when they deal with parking. They don't understand the other issues that make up the price. I'm not saying they don't want to know. They are busy people. So education is best so the best decisions are based on occupancy, not price.
  If you manage to get all of this past the politicians, you will have a fully functioning, parking operation that is responsive to the many detected changes in the city's on-street activities..... and it will support economic activity. Simple. The perfect parking operation is one designed to read and respond to on-street, off-street, public, private and institutional parking signals.
Technology must fit into this plan. The decision on the type of technology to buy is the last decision made. We sometimes get our priorities back to front by purchasing equipment without understanding the design of the parking operation nor the purpose of the parking, first.
  The key understanding that must be made here is that this system will work in Hospitals, Airports, commercial structures, on-street and shopping malls. When run well, it will enhance the customer experience and not hinder it. It will ensure greater use of the car parks and manage the peaks.
The bigger key message is that we often don't design our parking operations well in the first place nor do we re-design it when it needs help.
Kevin Warwood
Parking Operations Designer
These views are my own.

Thursday, March 7, 2013

Spy-Car Demise – Replacement Revenue is in the Occupancy Gap

This article in the Dominion Post, Wellington in New Zealand, is an example of what we are starting to see around the world, city’s parking revenues declining as compliance climbs.  This is a good thing …. Well mostly.  Revenue is still missing in the gap between occupancy rates.

There are some interesting issues here that will allow Wellington to get a system that services the main purpose or parking, to support economic activity and get its occupancy up to the stated aim of 75%.

Council claims its occupancy is at 58%.  The design of its parking operation is clearly imbalanced or not quite right.  If it responded to the occupancy data it is getting, it would have dropped the price by now to encourage a higher occupancy rate.  It may even utilise a multiple price system where the evening rates are set separately to encourage the night time parking.  This is greater utilisation of the parking resource.  Whatever it does, it should be designing a parking operation to aim at occupancy, not revenue.  The revenue is the outcome of better occupancy and a better designed parking operation.

One of the major retailer’s answers was to suggest that Council get control of more off-street parking to encourage more people back into the city.  I suspect that, being a typical retailer, they want a car park full of people, circulating and queuing to get into their shops.  This is a bad sign, not a good sign.  Issues about retail are normally about capacity of the car park.  A well designed parking operation’s goal is full occupancy.  If you have a full car park, then that is the amount of shoppers you are going to get. If the car park is overflowing, you don’t get extra shoppers, you get people sitting in cars and getting upset.  The best car park operators are the private ones as their main goal is occupancy.  I suggest the retailers look elsewhere for answers, i.e. on-street pricing regimes, rather than who is operating the car park.

With the retirement of the spy-car, the Council is having some budget issues.  That is what this article is about.  Extra revenue can be gained in the gap between 58% and 75% occupancy.  This gap can be easily made up by improving the design of the car park operation and introducing variable pricing.  If the Council aims at getting a higher occupancy, such as the international best practice figure of 85%, then the revenue the Council is looking for is the figure between 58% and 85%.  That will make up for the missing revenue from the retirement of the spy-car.  Make occupancy the goal and not revenue.  Everyone will be happier.

This is the personal opinion of the writer.

Chicago, Chicago .....

Hi friends,

I am off to Chicago, to the PIE convention.  I hope to catch up with you all and we can chat about my favourite subject .... parking.

I will have lots of photos and inforamtion to share when I get back.  If I dont see oyu, keep up the fight.