shared parking, apps, artificial intelligence
Payments Innovation

Online Marketplaces Vie For The Shared Parking App Crown

Many startups desire to be the Ubers or Airbnbs of their respective industries, but taking these crowns means facing fierce competition from other services. Becoming the dominant online marketplace in the shared parking segment requires finesse. These platforms need to grow their user bases by catering to both drivers and those who rent out spaces while also providing seamless renting, payment and parking experiences that keep users safe from fraud.

Braden Golub, CEO of Boston-based shared parking marketplace SPOT, and Sameer Saran, CEO of San Jose, California-based parking app ParkStash, say juggling these needs is no easy feat. PYMNTS recently spoke with these CEOs about the challenges they faced when building out their offerings and why they looked to Airbnb and Uber as blueprints for success.

Bringing Airbnb’s model to the parking world

“A marketplace is super fickle, and being able to build that out in a city like Boston had its challenges,” Golub said. “But we were able to allow these everyday drivers to park a lot easier once they came into the city, and we scaled from there.”

He said the platform had “a very Airbnb-esque model” when it launched in Boston in 2014. The iPhone-only service has so far facilitated more than 3 million parking hours in the city.

The shared parking market seems well-suited to the platform economy, and many apps and services are competing to connect drivers with empty parking spaces. SPOT and ParkStash are joined in the space by other apps including Citifyd, JustPark, Nester and Rover Parking, and most of these marketplaces offer quick, easy bookings with near-invisible payment processes.

Saran said the popularity of sharing economy services like Uber and Airbnb had enabled the parking market to become competitive quickly.

ParkStash officially launched in January and already has more than 7,200 users.

“When we think about shared parking, a lot of people are already using sharing economy apps like Airbnb, so they are pretty open to trying new things that are coming up in the sharing economy,” Saran said. “I think [consumers’] perceptions have changed a lot … so we have seen huge, organic growth because people just want to try the new app.”

Enticing customers to choose one sharing platform over another requires more than nifty apps and competitive prices, though. Both SPOT and ParkStash have come up with new features and approaches as they continue scaling their services. They are looking to expand into new markets in 2020 and further grow in the cities they already serve. ParkStash and SPOT also both currently allow individual homeowners to list driveways or other open spaces for rent.

“What we ended up doing was getting larger swaths of real estate by talking to the owners,” Golub said. “Any spot that you are not currently utilizing, we can monetize it. It’s more money in their pocket. At the same time, for [SPOT], we gain a much larger market share because we’re getting many more spots at one time. So, early on, it was super consumer-targeted. Now we’re working with a lot more landlords [and] property owners to expose what we think is a huge waste of real estate in a lot of these parking lots.”

ParkStash has made similar moves, partnering with restaurants, churches, property owners and small businesses to increase the number of rental spaces it offers. It is also smoothing shared parking frictions by numbering its spaces and providing renters solutions such as penalty fees if drivers overstay.

“For drivers, we learned that they don’t just want a parking app where they can pay for parking. They want a guaranteed spot if they’re going to pay for parking,” Saran said. “When we talk about landowners, they don’t just want to make money. They want to know who exactly is coming to park and that they are leaving at the correct time.”

The future of shared parking

Shared parking platforms that wish to match the success of services like Uber and Airbnb will need to address customers’ preferences, including offering the payment options they seek. Sixty percent of SPOT’s customers use Apple Pay to pay for its services, according to Golub, who added the company also supports PayPal and Venmo and is determining whether technologies such as artificial intelligence (AI) and biometrics could give it an edge for future transactions.

“Marketplace dynamics are different for every industry … [but] that’s why marketplaces thrive the way they do,” he said. “It becomes part of the routine.”

Airbnb and Uber are veteran apps viewed by many as pioneers of the sharing economy. Shared parking marketplaces may wish to follow in these giants’ footsteps and experience similar success in their segments, but those hoping to do so must innovate to reach the top and stay there.

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