Parkade co-founders Curtis Rogers and Evan Goldin met at Lyft in 2012, and pioneered parking experiments while working at the ride-sharing giant. Their major experiment — paid, assigned parking, for employees — changed how many employees got to work, and enabled the company to double in size while adding zero additional parking.
Lyft moved its corporate office to San Francisco’s Mission District in 2014. Despite being a short walk to BART, the office now had 53 parking spots — up from 6 at its last office — and the new neighborhood had free all-day street parking available (rare in S.F.). Lyft, as most companies do, made the parking lot first-come, first served for its employees.
Soon, half of Lyft's employees drove to work.
Those who arrived after the lot had filled up would circle the neighborhood looking for street parking. This created lost productivity for the company, crowded the streets in the neighborhood and frustrated employees on a daily basis. And because the parking was free, even employees who had other options drove to work, taking spots from those who didn’t. Doubly frustrating, because those arriving early would pass up open spots on the street because they had superior parking available next to the office.
Lyft briefly attempted to create more dedicated carpool parking spots, but those spots were similarly unreliable and solo drivers frequently abused them. A hard problem to solve without hiring someone just to monitor the parking lot.
A new approach
Goldin and Rogers pushed a new approach: Charge employees to park by leasing each spot to a specific employee on a monthly basis. This would have three major benefits:
- First, it would create predictability in the parking lot. The same 53 people, every day, would have guaranteed parking, and everyone else would know they need to find other options.
- Second, employees managing family schedules and living farther away would have the option of guaranteed parking. Lyft didn't want to create "CEO Parking" or "CFO Parking" spots, especially since those folks didn't necessary need to drive. Instead, everyone was given the option of guaranteed parking, but only if they valued it enough to pay for it.
- Most importantly, 100 percent of the money collected from the parking program was used to subsidize monthly transportation costs to those who didn’t opt to lease a spot. That new money — $75/month per employee for about 250 employees at the time — buffered the program against internal criticism from those that “lost out” on parking.
The program worked, and worked amazingly well.
We were able to double the size of the company, with the same number of parking spots.
The percentage of employees driving to work fell by double digits, and many more employees starting using Lyft to get to and from work. At another company switching to charging for parking, the parking fund could easily be expanded to subsidize public transit passes, bike supplies or other means of alternate transit.
Those that did get spots finally had predictability in their commute. This improved employee retention and made life much easier for parkers, especially the parents who were driving to work so they could drop off and/or pick up their child at school. Many of the drivers even started giving Lyft rides on their way to/from work (using the app’s destination filter), which often covered the costs of the parking spot.
Thanks to the complicated U.S. tax code, Lyft was able to charge employees for parking pre-tax, straight out of their paycheck, minimizing the hit to their bank account.
Parking remained so popular that to keep the lot full — and the waiting list short — Lyft raised prices consistently, eventually hitting $275/month. With 53 spots rented out, that collected $14,575 each month that was redistributed to non-parkers in the form of Lyft credits. The estimated post-tax cost to employees with parking spots was only around $8,750/month, yet the entire $14,575 could be given to non-parkers to spend on tax-free transit passes.
Lyft's former head of HR, Nasim Assadi, shared:
"Offering employees the ability to use assigned parking on a monthly and daily basis transformed how employees got to Lyft's Harrison St office. We saw fewer people driving their own vehicles, and the ones who did reported a faster, more reliable and less stressful commute. With the program in place, we were able to double the size of the company, with the same number of parking spots. It was even — dare I say — fun to roll out the program here."
Need for Parkade
Leasing spots also had an interesting side effect: There was a clear need to share spots when a parker wasn't coming into the office, or when a non-parker really needed a spot.
Goldin and Rogers hadn't created Parkade yet, so the company resorted to using a mix of Facebook groups and Venmo.
Each week, as employees worked from home or went on vacation, they would offer their parking spots up. Or an employee with an occasional, large need for a parking spot would post and offer above-market rate to secure a spot. Sometimes those offering spots asked for a cup of coffee in return, others asked for money and a few just asked for a correct trivia answer, or nothing at all.
This system ensured parking utilization stayed at 100%, reduced parking costs for monthly lease holders and gave those employees who just needed an occasional spot a way to get one.
Of course, it also led to the creation of Parkade, which makes sharing parking among employees at a workplace far, far easier than the Facebook-groups-and-Venmo system Lyft employed.
And with Parkade, everything they did can be easily replicated with little effort. Companies can offer assigned parking, can charge a price for it (or not) and employees can reshare those spots when their plans change — and those without spots can ask those with them to give them up for a day (making monetary offers if desired).
Equipped with Parkade, any office can tame its parking lot.