Dynamic Pricing is Modernizing the Parking Industry
If most pricing models in our society are based off of supply and demand, why is the same logic not consistently applied to the $100 billion parking industry? We pay premium prices for airfare and ride-hail services during peak times, yet we don’t do the same when it comes to parking. Instead, the majority of parking systems employ static pricing models based on historical data that is often times inaccurate. Giving way to a more modern method such as dynamic pricing not only enhances the overall parking experience, but also benefits all parties involved.
Dynamic pricing allows parking managers to maximize revenue and capacity of parking assets by increasing rates during peak times and in choice locations. This incentivizes drivers to use certain parking lots when rates and demand are both down. Dynamic parking permits drivers willing to pay higher fares to occupy premium spots and drivers willing to walk farther or avoid rush hour to occupy inexpensive spots. Increasing rates during peak times can motivate drivers to take a more environmentally friendly route, such as mass transit. Maximizing the capacity of parking lots and garages also reduces congestion caused by circling (which makes up 30% of traffic in cities), in turn decreasing carbon emissions.
When applied, dynamic pricing has proven to be successful. In L.A., the first gateless off-street dynamic pricing implemented increased the owner’s revenue by 100% within the first two months. Growth stabilized at 50% per month after cost reductions in labor, enforcement and management. Furthermore, overall business at the parking facility increased.
Drivers too benefit from dynamic pricing, as it allows them to pay for the true value of the parking spot rather than an arbitrary number based off inaccurate or stale data. Drivers who consistently park in less sought after lots are rewarded by having to pay less. Additionally, the outcome of reduced traffic is extremely beneficial for all.
XPressPark is the easiest way to manage dynamic parking. XControl, our cloud-based management dashboard makes it easy for parking managers to look at their zones’ total capacity and availability. All data is shown in real time without any lag. Rather than relying on historical data, parking operators can access granular reports in the dashboard and see their zones’ peak and off-peak times and adjust their rates accordingly. XControl provides a perfect way to plan for future events or holidays by providing a window into the past.
Want to make the transition to dynamic pricing even easier? With XPressService, our team handles the management and enforcement process entirely. Parking operators simply enlist our services and we’ll take it from there.
Dynamic pricing models benefit both parking managers and drivers through the simple, yet effective, fundamentals of supply and demand. They allow for an efficient use of our parking resources.
Switch to dynamic pricing with XPressPark and get the most out of your parking asset.
Resources
Shoup, D. C., & American Planning Association. (2005). “The high cost of free parking” Chicago: Planners Press, American Planning Association
