Why Cities Are Banning 'Free Parking' Apps As Parking Woes Escalate

We are at a crossroads, as it were. We have evidence - and we would like to believe - that technology can solve a lot of the world's problems. Perhaps not the really big ones like world hunger or war, but a lot of daily challenges that make life more difficult than it needs to be. And, frankly, smartphones may even address some of those gnarly ones by making it easier for small farmers to get a better price for their crops or for potential adversaries to communicate first and shoot later, if at all.

But back to daily life. Urbanization is one of the widely acknowledged global mega-trends. Putting more people in smaller spaces tends to result in frustration and, sometimes, conflict.

The problem is that most governments, whether local or otherwise, have as a fundamental proposition that there is such a thing as the common good and that at least one of their responsibilities is to safeguard it. And yes, we get that corruption, cronyism, self-interest and politics often create a rather noticeable gap between aspiration and reality.

Technology companies, for all their highblown rhetoric about making the world a better place, are primarily dedicated to making money for their founders and investors. And this is where the conflict arises. Because the technological solutions offered to solve public problems all too frequently appear to provide financial benefits for the few based on generating revenues from public assets owned by the many. Like highways designed to improve commuting with pay-extra lanes, or traffic signals ostensibly set to reduce accidents but at which green to red lights speeds are increased to catch more motorists who must then pay fines.

Parking meters were originally, and largely remain, a municipal solution to a limited supply of spaces. Classic economics. But like everything else in the public realm, they are now being auctioned off to private companies in lieu of raising taxes, which has become a politically unpalatable solution. Free parking apps could be an answer, but like Uber and Airbnb and other supposedly 'sharing economy' models, they are really technologically enhanced methods for avoiding taxes and regulation that penalize existing businesses.

So back to that cross-roads: governments, with the support of their voting and tax paying publics, are pushing back against the tech companies: against Amazon and Google and Facebook and little companies wishing to solve little-ish problems like urban parking by auctioning off spaces.

 It's not so much the tech solution or that someone is making a few bucks, but that tech itself, is no longer seen as a clean-hands partner in this. It has allied itself with those who are perceived to be screwing the little guy whose household income hasnt risen in 30 years. And until tech figures out how to get on the other side of that transaction, it is going to continue to invite conflict, which, in turn, constrains growth. JL

Christopher Mims comments in the Wall Street Journal:

Many of the most desirable parking spots are controlled by cities that seem helpless to allocate them in a way that makes sense.Up to 30% of the congestion in cities is due to people searching for on-street parking.
I found Eric Meyer ’s office on a historic Baltimore street so narrow it might qualify as an alley, which is appropriate since his startup helped people find parking in crowded cities. Or his app Haystack would, if he hadn’t been forced to shut it down after it was banned in several U.S. cities.
Parking and the congestion it causes is one of the primary headaches of living in or visiting a city. Startups like Parking Panda and dozens of others, which are sometimes described as the Airbnbs of parking, tackle this problem by teaming up with citizens and private garages to allow drivers to reserve parking via an app. But this approach doesn’t address a fundamental problem: Many of the most desirable parking spots are controlled by cities that seem helpless to allocate them in a way that makes sense.
Up to 30% of the congestion in cities is due to people searching for on-street parking, says Donald Shoup, professor of urban planning at the University of California, Los Angeles. Throw in the emissions that go with that, the health impacts of which are worsened by density, and “free” and even metered parking have significant issues that most of us tend to ignore.
The idea behind Haystack and its competitors was simple: Provide an incentive for people to let others know when an on-street parking spot is open. In Haystack’s case, it was $3 in Baltimore or $5 in Boston.
You don’t have to remember the controversy that ensued to understand that such a system has potential for abuse—what’s to stop someone from simply occupying public parking spots and selling them off one by one?

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Fear of just such an outcome inspired Boston, Los Angeles, San Francisco and Santa Monica, Calif., to ban the app. Before a vote on the ordinance to ban Haystack and its ilk, Boston city council member Frank Baker said: “My understanding was that they were trying to buy and sell public property that wasn’t theirs to buy and sell.”
To most observers, this outcome was a victory in the battle between public goods and predatory encroachment of aggressive tech entrepreneurs. One Boston city council member asked what would be next, people renting out park benches?
But all the cheering ignored a simple fact: The problem these parking startups sought to address remained unsolved.
It didn’t have to be this way. “We had a meeting with several senior parking and administration officials in the mayor’s office, as well as multiple meetings with the Mayor’s Office of New Urban Mechanics,” says Mr. Meyer. “We offered to modify our model, and offered to share data and revenue with the city—they were uninterested.”
Consider that many cities already do the following: Reduce traffic through “congestion pricing,” in which they charge everyone entering their limits a flat fee; reduce the availability of on-street parking by renting hundreds of city-owned spots to car-sharing services like Zipcar and Getaround; charge higher rates on parking meters at times of high demand, to try to keep more spots open; spend millions of dollars installing sensors in parking spots to accomplish exactly what Haystack could have accomplished: Alert drivers with smartphones to which spots are available.
Boston has already done exactly this with 330 parking spots in the city’s “innovation district.”
Haystack offered to share revenue with the cities in which it operated. Couple that with its attempts to collaborate with city governments and you have a company hardly deserving the “jerk tech” label attached to it in a July editorial on TechCrunch, a website focused on technology firms.
If anything, the problem with Haystack and other parking apps was that it made the mistake of not rolling out in cities before local governments had a chance to regulate it out of existence. This tactic is used again and again by ride-sharing service Uber, which currently operates in places like Copenhagen and the state of Maryland despite being technically illegal in both. By solving a headache for consumers first and asking for forgiveness later, Uber has cracked the code of what Adam Thierer, a senior research fellow at the Mercatus Center at George Mason University, calls “permissionless innovation.”
His colleague Christopher Koopman described it to me like this. “We should be allowing people to innovate and enter into transactions and then adjust on the margins as issues actually arise.” In the case of Haystack, regulators took a different approach—imagine the worst-case scenario, and move to block it before there’s any evidence it will come to pass.
For example, Haystack had all the data it needed to know if users were abusing the system by sequentially grabbing and selling parking spots—and banned them from the app. And while the company did allow some users to auction off their spots for more than a few bucks, Mr. Meyer said this represented only 10% of transactions while Haystack was in operation.
Had cities engaged with Haystack, they could have asked the company not to do things that might be egregious—like allowing the auctioning of spots. And money isn’t the only incentive that would work to convince people to alert others when a space is open.The entire business model of Recyclebank, for example, is predicated on the idea that people need incentives to recycle. Recyclebank takes over the recycling programs of cities, and gives citizens points for the amount they recycle, which they can spend at Recyclebank’s online store. Perhaps politicians and media would have been more comfortable with this kind of incentive system for alerting others to open parking spots.
“If I wave somebody down [to take my parking spot] cities wouldn’t try to ban that, but because people are incentivized to do it by exchanging money, cities seem to be aghast,” says Mr. Koopman.
Other approaches to solving cities’ parking woes, like reservation systems for private garages and app-based valet systems, have rushed in to fill the gap. Compared to Haystack they are expensive, and that’s perhaps the ultimate tragedy of this story. In an age of ever cheaper and more accessible smartphones, why shouldn’t we figure out a way to eliminate parking-related congestion at a price that, arguably, almost everyone driving in the dense urban core of a city could afford?
Smartphones are the ultimate sensor and alert system for cities, and trying to reproduce their functions with custom hardware, like smart parking spots, is a waste of resources. But somehow that got lost in the rush to declare that parking startups that address a failure of local government couldn’t possibly have a net benefit for citizens.