Blog post

Smart Parking System: What Is the Market Lacking?

Learn what types of smart parking solutions the market demands and how not to get lost in the search for a parking spot

Updated on November 18, 2021

9 mins read

Parking is a big problem. Sometimes it reminds you of an F1 race to get into the parking spot first. You experience a lot of inconveniences and competition as you cruise in search of a place to park, not to mention the carelessly parked car spanning two spots and the parking meter nowhere to be seen…

We could go on and on with complaints about parking, but let’s not dwell on them. Instead, let’s think about how the parking process can be fixed.

Why the need for smart parking systems is sizzling

Parking isn’t just a public (in)convenience — it’s an acute business issue for urban planners, private parking owners, and transportation managers alike.

Too few parking spots lead to more pollution and traffic congestion. Too many spots end up being unprofitable; plus, they eat up a chunk of prime curb estate.

Cities like Amsterdam and Singapore are pursuing “unparking” strategies. City planners aim to reduce the number of parking lots and convert them into spaces for other uses by encouraging people to opt for shared transportation over private vehicles.

The transition to shared mobility models will bring tangible reductions in parking infrastructure, with a smaller number of cars that are idle less. As much as 86% of current parking spaces (in Singapore) are freed up or repurposed if a complete switch occurs from private cars to shared mobility.

MIT Senseable City Lab

But space optimization isn’t the only driver of smart parking solutions. Almost every city and its residents, whether that city is car-light or car-centric, can benefit from a tech-enabled approach to parking management. Here’s how:

  • Drivers: Cars won’t disappear completely. Owned and shared vehicles still need to be properly parked. Yet when no parking places are available, many drivers engage in “negative” behaviors 34% will park illegally, causing traffic issues and risking a fine, while others may cancel their planned activities and go elsewhere.
  • Logistics companies: Commercial vehicles spend 28% of total trip time cruising for parking on average. Effectively, a driver doing 30 trips spends over an hour per day looking for parking. Given the spike in last-mile deliveries, this results in suboptimal fuel management, delayed deliveries, and a worse customer experience for end users.
  • City authorities: Cruising vehicles can account for 15% of traffic in the best case and up to 74% in the worst-case scenario. As a result, streets become more congested and emission levels go up. If cities are to hit net-zero targets, reducing parking cruising time is a must.
  • Parking managers had a challenging year last year. In the US, revenue from parking lots and garages nosedived from $10.27 billion in 2019 to $7.49 billion in 2020. Even though the clientele is (partially) back in 2021, driving patterns have changed. Fewer people now drive to work. More and more choose shared mobility options. In response, parking managers need to seek alternative revenue sources: renting space to carsharing companies with long-term contracts, installing/expanding e-vehicle infrastructure, and offering more competitive pricing.

Comprehensive smart parking systems can fulfill the needs and address the woes of all these parties. So why shouldn’t you be the one to build such a system?

Smart parking management system: a product roadmap

Smart parking technology — connected ticketing systems, IoT devices, location-based services — has been around for several years now.

Yet few market players have managed to turn this tech into a coherent, city-wide smart car parking system. How come?

Because technology is a tool, not a solution per se. Apart from having the technical capabilities to code a product, you also need to ensure that there is:

  • Sufficient supporting infrastructure in place (hardware)
  • A scalable IT architecture to support large-scale deployments
  • Efficient data and process governance across locations
  • Consistency between the digital and physical customer experience

Can you achieve all the above during the first product iteration? No, that’s a bit too optimistic. What you can do, though, is create a sharper, bolder product vision for your parking management system. We’ve got several ideas worth adding to your backlog (and the expertise to develop them too).

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Parking guidance and information systems

The end to every grand journey is…finding a place to park the car. This can be cumbersome in your home city and even more arduous when you’re in a new locale. Data proves this: 76% of drivers are interested in using an app to guide them to the nearest parking lot with available spaces. Owners of connected cars also prefer to have parking information transmitted to the dashboard.

From an urban planning perspective, getting people to use turn-by-turn parking guidance systems not only reduces cruising time but also leads to increased payment compliance. When you get billed straight from the app, there are no “oh, I forgot to run to the parking meter” type of situations.

Recently, the Intellias team worked on a smart parking management app for one of our clients. They were looking to develop a new mobile-friendly map format and a guidance system that could work in both online and offline modes.

We developed a proof-of-concept solution with a simple yet effective workflow. After entering a destination, the user receives several suggested free and paid parking lots with an estimate of travel distances and ETAs. After choosing a parking option, the app first builds a driving route to the parking lot. Then it creates a walking route from the parking spot to the selected destination. Data on parking availability comes from the platform’s volatile layer, which in turn obtains accurate information from vehicles whose onboard sensors have detected parking spots while navigating the area.

The above, however, is just one way to obtain real-time availability data for parking management system software. You can also:

  • Integrate a commercial parking information API such as Parknav or ParkWhiz API
  • Use publicly available or crowdsourced data sets to build a predictive parking algorithm
  • Collect proprietary information using an on-site smart parking loT-based system that verifies occupancy rates

With the ubiquity of big data sources in transportation, new options are emerging every day.

Learn about viable big data use cases in the transportation and mobility industry

Read more

Parking reservations

Many people and businesses need regular parking spots. Digital parking systems can help balance demand and supply. By offering short-term and long-term reservations, city authorities and parking managers can:

  • Ensure maximum occupancy
  • Manage traffic flows and demand for spaces
  • Provide residents with discounted parking
  • Allocate more lots to private companies — logistics and mobility providers

Such systems can significantly increase the profitability of operating a lot and show urban planners demand dynamics.

Adding dynamic pricing and data-driven revenue management units to a parking reservation unit can make the return on investment even more attractive.

An effective revenue management module requires the following elements: Smart Parking System: What Is the Market Lacking?

Source: MDPI — Is Parking in Europe Ready for Dynamic Pricing? A Reality Check for the Private Sector

Parking reservation data, as well as a no-show parking fee and cancellation rates, can be used to forecast occupancy rates and demand at different times. Based on forecasts, you can then apply different pricing tiers for an array of customer segments — local residents, business travelers, tourists, or commercial entities.

The current state of machine learning and AI in transportation allows for building highly accurate price-sensitive algorithms, processing an array of data points to nail that sweet spot.

For instance, a parking revenue management system recently installed in the French city of Nimes can provide 256 pricing options with discounts ranging from 1% to 60% depending on the demand. San Francisco has also reported positive outcomes from the SFpark pilot — a city-instituted dynamic parking pricing program. Parking availability improved by 16% in pilot areas and occupancy rates went up by 31%. Also, the percentage of time parking was available increased from 10% to 85% due to better parking management practices.

Occupancy prediction module

Similarly to dynamic pricing, parking revenue management can be improved through a better occupancy predictions. By knowing the dynamics in demand, you can better manage your inventory and increase occupancy rates.

Apart from adjusting prices, you can use big data analytics to:

  • Run location-based promo campaigns for attracting nearby drivers
  • Increase the number of recurring subscriptions and long-term bookings
  • Rent out extra space at a competitive rate to carsharing and mobility companies

In this case, however, you may also need to update your on-premises infrastructure to detect parking spot occupancy. Sensors and cameras connected to a parking loT management system should do the job. Alternatively, you can opt to use the vehicle-to-vehicle (V2X) communication standard to collect data from parked vehicles and estimate occupancy rates this way.

Curbside management

With ecommerce deliveries on the rise and ride-hailing services as active as ever, managing the curb has become increasingly important. Delivery trucks as well as passenger pick-up and drop-off activities cause congestion and create traffic hazards. Innovative parking solutions can help authorities better manage loading zones and delivery schedules.

Adding a special commercial vehicle loading zone at a destination reduces vehicle trip times by up to 6.5%. But officials are often reluctant to convert lanes or walking zones into such areas. You can help them make better decisions by supplying them with the insights they need, plus guiding commercial users towards the newly established zones.

For instance, City Tech Collaborative and partners recently presented a data-driven Curbside Management Solution. Using anonymized data, the team developed a predictive algorithm for identifying the main bottlenecks and friction areas across selected locations. The goal was to pinpoint where curb demand exceeded supply, and vice versa. The results were impressive.

In Chicago, the team found that a 75% reduction in loading zone spaces and the addition of 250 new off-street parking spots, 250+ taxi spaces, 300 rideshare spaces, and 500+ bikesharing stations could lead to a sharp increase in revenues (without harming traffic management).

Modeled vs baseline space revenue
Smart Parking System: What Is the Market Lacking?

Source: CityTech Collective — Making Space: City Tech Solution Demonstrates How to Better Allocate Curb Space for Multiple Mobility Modes

Connected payments

Paying for parking already feels like a drag. But when the payment process is inconvenient, more people skip this step. Instead of penalizing people, it may be worth trying something else — coercing people to pay through convenience.

As more connected vehicles hit the roads, parking payments can be made fully invisible — integrated into in-car dashboards and handled with a quick tap of a button. Such embedded in-car payment solutions offer many advantages:

  • Frictionless and fast payment experience
  • Discounts on parking/charging from nearby providers
  • Ability to add a parking subscription to your car
  • High compliance with parking payment rules

Learn more about implementing connected payment systems in cars

Read more

Drivers too are tired of fumbling for coins or even reaching for a card. According to the 2021 Connected Vehicle Commerce report, 65% of drivers want to pay for parking using their voice. This cohort is getting more vocal (pun intended) in key automotive markets like Germany.

Appyway, a curb management platform, recently partnered with Visa to co-develop a payment component of their parking application. The One-Click Parking™ solution allows drivers to auto-pay for parking with one quick tap when they navigate out of the lot. The billing engine supports per-minute billing after charging a location’s minimum flat fee.

Parking availability predictions

Finally, if you still have room on your roadmap for a smart parking system, adding a long-term parking availability prediction engine can be a good idea too.

Such a system could help:

  • Drivers to reduce the time spent parking
  • City authorities to better plan lots
  • Parking managers to keep occupancy rates high

To understand the demand for parking in an area, you can install sensors and cameras as well as analyze free-floating cellular data and vehicle data to map common driving and parking patterns. Then you can create a simulation and perhaps even a visualization of parking demand across the tracked region (rather than individual lots or parking networks).

Another way to increase model accuracy is to use geospatial data along with other data sources. Recent research by WHOM? suggests that parking availability prediction models using GIS perform 25% better than those that don’t. Likewise, parking payment information can be a good proxy for modeling demand in areas where physical sensing infrastructure is limited.

To conclude

An hour later, the product manager drives to another parking lot. This time she sees just one spot and no exit gate in sight. Sensing the confusion, the parking manager says “we’re still at the MVP stage.”

Building a coherent, flexible, and scalable smart parking system is a tedious process. Between infrastructure limitations, technical issues, and negotiations with authorities, you have a lot on your plate. Thankfully, you don’t have to go on this drive alone.


Intellias is an experienced technology partner for companies in the transportation and urban mobility sectors. Contact us to discuss your product vision and get some sound advice on refining your backlog.

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