By Danielle Desjardins

One of the greatest environmental challenges our cities face today lies in mobility. The economic and social fabric of urban environments are closely intertwined with networks of vehicles and transportation systems that leave their mark: around one-quarter of global CO2 emissions come from the transportation of people and goods.

How should the parking industry adapt to a future in which major cities may deploy various strategies meant to diminish the number of private vehicles on their main thoroughfares, thus diminishing the need for parking spaces?

If you commuted to work by car in Montreal or Toronto in 2017, chances are you spent the equivalent of a normal work week being stuck in traffic. According to the Inrix Traffic Scorecard Rank1, commuters from these cities wasted respectively 50 and 47 hours being in a car immobilized by congestion.

As the population grows and more people move into urban areas, overwhelmingly choosing the suburbs over downtowns, traffic jams worsen and commuting to work becomes a never-ending nightmare. Hence a growing trend in major cities to implement various strategies and impose new rules to ease the gridlock and get people moving again. 

For instance, many cities are banning cars from their centers: Oslo has pledged to do it by 2019, Madrid wants to do it in 2020, while cities like Rome, Dusseldorf and Stuttgart are planning to ban diesel cars in the near future.2 Other cities, like London, plan to create streets and street networks that encourage walking, cycling and public transport use in order to reduce car dependency3. Add this to other recent developments, like the proliferation of ride-sharing and car-sharing services and the advent of driverless cars getting people to work and returning home to park4, and you have the perfect storm for a decline in demand for parking garage services.

Embarking on the sharing economy

In an insight paper on the future of mobility, Ernst & Young (EY) states that the parking industry can adapt and become part of the solution, a solution in which mobility becomes a service supported by shared platforms that offer citizens a transport mode better adapted to their day-to-day needs.5  

In that future environment, parking infrastructures would be used as base stations for various car services (recharging, repairing, washing, etc.) and, above all, for mobility services like car-sharing.

“At EY (…) we believe the key to future mobility is already in the hands of our cities and may lay in their parking infrastructure.” Mobility Tomorrow: A New Business Model for Our Parking Infrastructure

Car-sharing is a type of car rental designed to be convenient for people who want to rent cars for short periods of times and only pay for their usage, while being able to access it at any hour. The cars are spread around town in reserved parkings (point-to-point) or can be left on-street within designated zones (free-floating) and their utilisation is facilitated by mobile apps.

Car-sharing is on the rise: the research firm Frost & Sullivan estimates that the number of members using car-sharing services should increase almost threefold from roughly 6 million in 2017 to almost 18 million by 2025. Another evidence of the popularity of car-sharing is the growing interest of giant automakers like Daimler, Toyota, Peugeot, Volkswagen and BMW who have all invested in the sector6. 

Of further interest for cities planning to curb the number of cars in their streets: many studies indicate that car-sharing schemes can lead to reduced car ownership with 5 to 15 cars being replaced for each shared car added to the fleet7.

Parking operators in the car-sharing business

One of the most successful car-sharing projects in the world, emov, is the product of a joint venture between a parking lot operator, EYSA, and an automaker, Group PSA (maker of Peugeot and Citroën cars among others)8. 

emov was launched in Madrid, a city that has become in a few years a model example of how the automotive industry can adjust its business models to a mobility service-based future. In Madrid, more than a quarter of a million citizens, nearly one in twelve, subscribe to one of the two main car sharing providers, Daimler’s Car2Go and PSA-backed emov (the French carmaker Renault also entered the market at the end of last year). 

Another European city, Brussels, also boasts a car-sharing service operated by a carmaker and a parking operator:  in Brussels, the BMW Group and Sixt Rent a Car are in partnership with Interparking, one of the most important European parking operator, for the DriveNow car-sharing service.

In its insight paper on the future of mobility, EY models the European parking ecosystem to demonstrate how the industry could evolve if a scenario of high car-sharing was adopted. 

In this scenario, EY predicts that in Europe the number of cars on the street could be reduced by half and the car utilisation rate would go from 10% (with cars being parked 90% of their time) to 50% (and cars parked 50% of their time) decreasing the number of parking spaces needed from 440 million to 224 million.  In a scenario of car-sharing full adoption, they conclude, the average revenue per parking space for an infrastructure built around car-sharing would raise from the current 780 euros to 6,548 euros.

This looks like an overtly optimistic scenario, but EY has put its money where its mouth is, announcing last summer the launch of Tesseract, an integrated mobility platform, underpinned by blockchain technology, that will facilitate “fractional vehicle ownership”, shared use and seamless multimodal transport. EY believes that the hope of creating new revenue streams will incite cities, transport companies and infrastructures owners to participate9.

  1. NRIX 2017 Global Traffic Scorecard. Online: http://inrix.com/scorecard/
  2. World Economic Forum, From Oslo to Paris, these major cities have plans to go car-free. Online: https://www.weforum.org/agenda/2017/02/these-major-cities-are-starting-to-go-car-free
  3. London’s Mayor Transport Strategy 2018. Online: https://www.london.gov.uk/what-we-do/transport/our-vision-transport/mayors-transport-strategy-2018
  4. See Parker Magazine “Parking in the Driverless Era”, part I and II. Online: http://canadianparking.ca/parking-in-the-driverless-era/  and http://canadianparking.ca/parking-in-the-driverless-era-part-2/
  5. EY, EU Infrastructure Advisory Team, November 2017, Mobility tomorrow: a new business model for our parking infrastructure. Online: http://www.ey.com/Publication/vwLUAssets/EY_future_of_transport_mobility_insight_paper_3.1_nodia_final/$FILE/ey-future-of-transport-mobility-insight-paper-3.1-nodia-final.pdf
  6. The Telegraph, October 15, 2017, Is the car sharing industry finally ready to move up a gear? Online: https://www.telegraph.co.uk/business/2017/10/15/car-sharing-industry-finally-ready-move-gear/
  7. Transport & Environment EU, Does car sharing really reduce car use? Online: https://www.transportenvironment.org/newsroom/blog/does-car-sharing-really-reduce-car-use
  8. http://media.groupe-psa.com/en/psa-peugeot-citro%C3%ABn/press-releases/group/psa-group-and-eysa-launch-emov-car-sharing-service-madrid
  9. 30 August 2017, EY advancing future of transportation with launch of blockchain-based integrated mobility platform. Online: http://www.ey.com/gl/en/newsroom/news-releases/news-ey-advancing-future-of-transportation-with-launch-of-blockchain-based-integrated-mobility-platform
SHARE IT:

Leave a Reply

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>