On October 20, 2014, Apple launched “Apple Pay,” which was a true accelerator for mobile devices being utilized as a contactless mobile payment. Growth has been steady for six years as multiple point of purchase systems for numerous business categories had to be reconfigured to accept a mobile payment. What was initially viewed as a convenience suddenly became a necessity with the COVID-19 pandemic.
COVID-19’s impact on parking is easy to spot. Drivers are reaching outside of their windows, using any object they can find in their car (keys, pens, etc.) to press the ticket button, or they attempt to cover their hand somehow with their sleeve and use their fingers. This small shift in behavior has monumental implications. People do not want to touch parking equipment (or any surface) that thousands of other people are touching. This demand has been a long time coming. We live in a time where one can order dinner, hail an Uber, book a hotel room or reserve a train or an airline ticket from a phone. The expectation for contactless mobile solutions has naturally extended to parking.
Forces of nature, like hurricanes, earthquakes, tornadoes and pandemics, have a way of forever changing the lives of those who are impacted. The heightened sensitivity to touching anything will be in our consciousness for a long time, and it is an issue that demands a remedy as companies are increasingly calling their workforces back to the office. People can control the exposure and cleanliness levels in their own households, but how can they be sure that they are safe when they venture outside their home? Commercial real estate properties are grappling with how to keep people safe when they congregate in elevators, bathrooms, lobbies and even garages. In the U.S, 86% of employees commute to work via personal vehicle, which means that they park. In urban environments, employees often park in a paid parking facility and come into contact with thousands of other commuters while accessing the parking facility through the parking equipment (i.e. touching a screen or button to get a ticket and lift the gate).
The collision course of “safety first” into the daily payment activities is incredibly relevant now and equally challenging. It has been reported that mobile payments have increased by over 40% since March. This should not be a surprise given the collective thinking on safety. It would be even higher if the point of purchase systems could be easily converted. Parking is particularly challenging; executing a mobile payment in a moving vehicle or in a vehicle in a traffic pattern requires a higher level of performance. Prior to the pandemic, there was not a system that could be universally utilized to make parking access and payment from inside a car.
For commercial real estate developers, especially in major cities, parking is a major component of their portfolio. To have office spaces and parking spaces empty due to the pandemic is a duel challenge for them to tackle and crucial to their bottom line. For employees coming back to work who are driving and parking, entry to the office parking garage will be their first reference point as to whether they are entering a safe, contact-conscious environment. If an employee is impressed with a safer parking experience, that will help bolster their confidence in their safety at the office, and confidence is key when encouraging people to return to work and filling those empty office spaces.
But parking is tricky. There are varying types of parking garage equipment, many of which is aging and outdated technology. Also, there are vastly different types of parking lots and many different landlords and operating companies that run the parking assets. From private condominium parking that has an easy flow of monthly parkers to office megaplexes that see thousands of cars a day, there is no one size fits all when it comes to parking. But for contactless parking technology to achieve mass adoption, it must fit all parking.
Parking operators are on the front lines of fielding the demand for installing an effective contactless solution, and finding one can be a significant help in bouncing back from the parking downturn caused by COVID-19. This will be a challenge to prioritize, however, as operating companies are tasked with digesting the 80% decrease in parking demand. Those that do install a contactless solution will have an advantage over non-contactless facilities, as the concern over safety might just be enough divert drivers to safer, touch-free facilities. This runs counter to the way drivers typically choose parking, which is opting for the facility that is closest in proximity to their destination.
The benefit of mobile technologies is that they traditionally do not require a significant human resource commitment to utilize; once a parking facility goes contactless, the system should maintain itself. If operators can quarterback the technology onboarding process, it will pay off in the long run. Further to the consumer experience, going mobile with parking also unlocks a wealth of inventory, data and revenue management opportunities, which are often under-supported by legacy parking equipment.
With so many drivers, contactless parking has become a lightning rod for a technological revolution. While challenging, there are technologies now that allow you to enter, park, pay and exit from your mobile device from inside a vehicle — truly an amazing technological advance that will change parking forever. The mobile adoption cycle is growing quickly with an immediate 25% adoption rate in installed locations that increases rapidly. Some parking locations across the country have now adopted 100% of all transactions from a mobile device, and this will be the primary system of the future. For the first time, consumer behavior is demanding convenience from an industry where that was not historically necessary. If you drive, you must park; it is an essential service. COVID-19 changed all of that.
Contactless parking will expand rapidly across all parking facility types in most major cities over the next few months. As varied as the parking landscape is, if a technology can the support of a few key operators or real estate companies, they can leverage a nationwide portfolio in a short period of time. And it is already happening. The major urban centers will be the early adopters, but eventually, touch-free parking will be everywhere.
Jerry Skillett is executive chairman of Spaces USA.