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How Parkade's CEO helped to change commuting culture at Lyft

December 7, 2020

Evan Goldin
Co-Founder/CEO

TABLE OF CONTENTS

Despite higher gas prices, climate change fears and new technology, the vast majority of Americans are still opting to drive alone to work instead of using public transit or carpooling. Why? Primarily, it’s the massive availability of free parking on both sides of the commute (thanks, suburbs). It’s an expectation at most office complexes that you’ll be able to park at your office for free, and that makes it very difficult for any other mode of transit to compete with driving alone.

Yet, it turns out that a small nudge can make a big difference. And the stronger the nudge, the more people you can get out of their cars.

I used to work at Lyft headquarters in San Francisco. Being a ride-sharing service, the company always felt strongly that its team members should explore other modes of transportation before driving their personal vehicles alone. However, each office the company occupied (it grew quickly) included on-site parking spots. And, as you can imagine, when there’s free parking, people will use it — even when they work for a hip ride-sharing app.

When Lyft moved its corporate office to San Francisco’s Mission District in 2014, the problem really exploded. Despite being a short walk to BART, the new office now had 53 parking spots — up from a half dozen — and the new neighborhood had free all-day street parking available (rare in S.F.). Soon, almost half of their employees drove to work.

Those who arrived after the lot had filled up would circle the neighborhood looking for street parking. This resulted in lost productivity for the company, crowded the streets in our 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, and they might pass up open spots on the street because they had superior parking available next to the office.

We tried the logical first step: devoting a small number of spots to carpools.

While it successfully created more carpooling, the low supply created the same problem the open parking spots did — unpredictability. It only took a couple of attempts for a driver to wrangle a carpool together and then fail to find an open carpool spot to give up on carpooling altogether.

Abuse of the carpool spots was also rampant, which, short of monitoring the carpools closely, wasn’t easy to solve. We pondered making all spots carpool-only, but we expected the abuse would increase and would produce little success, and it would punish people who didn’t live near other employees.

Lyft starts charging employees for parking

Since nothing else worked, we pushed forward a simple, radical new approach: Charge employees to park by leasing each spot to a specific employee on a monthly basis. First, this strategy would inevitably create predictability in the parking lot. The same 53 people would have guaranteed parking every day, and everyone else would know they need to find other options.

Second, we wanted employees managing family schedules and living farther away to have the option of guaranteed parking. This created a way for everyone to have the option of parking, but only if they valued it enough to pay for it.

Most importantly, we redirected 100 percent of the money collected from the parking program to subsidize monthly transportation costs to those who didn’t 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.

We rolled out the program in late 2014, but it wasn’t an instant success. At first, we priced parking too high, at $200/month. Not all spots were sold and we ended up with a slew of empty spots in the lot and upset employees, who were annoyed at not being allowed to use empty spots. At the same time, some employees accused us of being “classist” and making the parking lot only accessible to the wealthy.

But we stuck to our guns and lowered prices on the parking spots until demand and supply matched and the lot was full ($150/month was the magic number at first). We made sure to address criticisms head-on and face-to-face, repeatedly explaining the benefits.

And boy, did it work. The percentage of employees driving to work fell by double digits, and many more employees starting using Lyft to get to and from work. 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. 

Thanks to the complicated U.S. tax code, Lyft was even 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 — we 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. We estimated that the monthly 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 (or taxable compensation, like Lyft credits).

Leasing spots also had an interesting side effect: It created a secondary market for parking. Through an internal Facebook group, parking spot holders could offer their spot to others when they were out of the office for a day. 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.

Or, someone who really needed a spot for a day (say they had a midday appointment or post-work plans that required a car) could request one and offer money, if that did the trick. It was a great method to make sure that the lot was always full and costs were minimized, even when spot holders were out of the office. And it kept those who only really needed to drive once or twice a week from driving every day, purely out of habit.

You can change commute culture at your workplace, too.

If you are tired of having to deal with inadequate commute culture at your workplace, we can help you out. Parkade is a smartphone application that transforms any workplace parking lot into a lot with reservable parking for employees who work there. You can easily apply all the methods Lyft did, with a press of a button on your smartphone. 

Here’s how Parkade works.

Reliable parking

If you want to ensure parking reliability and predictability to your employees, then offer them monthly parking. Parkade allows those who reserve monthly spots to reshare them with others on days when their plans change and they don't drive to work.

Reservable parking spots

Parkade makes it easy for your workplace to offer reserved parking. Once you've added some or all of your numbered parking spots to Parkade and invited your employees, they'll be able to instantly book parking at work.

You can even offer parking daily (only one person can park in a spot each day) or hourly (for workplaces that have multiple shifts).

Pre-tax payments

Using Parkade, employers can offer reserved parking to their employees for free or for a price. You can offer your employees to pay via pre-tax options like WageWorks or Navia commuter benefits cards. Different prices can be set for hourly, daily and monthly reservations.

Charging for reserved parking won’t work for everyone, but I strongly encourage more companies to try it. I’ve talked to dozens of companies who have complained they don’t know how to change their employees’ habits, while their parking lot hosts hundreds — or thousands — of cars, all parked for free. Even $40/month for the most desired spots in the lot could be enough to ignite a massive shift change, especially at a company where most people drive to work.


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BlogParking Management Software ROI

Investigating the ROI of parking management software

With parking being one of the largest drivers of ancillary revenue at multi-family properties, it's imperative to get it right. But just how much return can you expect from parking management software? Read on to find out.

Published: August 7, 2024
Hannah Michelle Lambert
Content Writer
Boosting ancillary revenue is often a major focus for property managers and owners alike.

Especially given that the baseline forecast for rent growth is slightly lower this year than average (2.5% versus 2.9%), properties are increasingly looking for ways to raise their bottom line without compromising the quality of living for their residents. 

One often overlooked but significant opportunity lies in parking. If managed well, it’s a potential treasure trove for additional revenue. But that’s only if it’s done well. 

Parking tends to be one of the biggest thorns in the side of a property manager. Because traditional systems — like spreadsheets and rentable items — are not built to handle tenant parking efficiently, teams aren't able to reap the full benefits parking has to offer as an ancillary revenue source. As soon as a team makes the decision to invest in a proper parking management system, the benefits often more than pay for themselves.

In this guide, we will explore those benefits, touching on both the financial and operational upside of a solid parking management strategy.

We’ve combed the data from all of our clients to identify the exact numbers to prove that there truly is ROI in parking management systems like Parkade. 

Understanding parking management

Before we dive into the numbers, let’s first establish a baseline of what exactly parking management entails. As any property manager will tell you, it involves much more than just hanging a tag on a resident’s car and calling it a day.

The key components of a parking management system are:

  • A system of record to track parking assignments, lease lengths, vehicle details, and parking prices, ideally integrated with your PMS.
  • An enforcement strategy that ensures parking rules are clear and establishes consequences (typically fines or towing) when someone breaks them.
  • A method to pay for parking, whether it’s bundled in with rent (which we don’t recommend) or paid for in a separate system.
  • A self-serve system for residents and guests to book long or short-term parking. 
  • If there is a gate on the property, provisioning and deprovisioning of gate entry should also be considered in the parking management strategy. 

The old-school way of addressing these needs isn’t cutting it anymore. Many properties are still using manual processes, like an Excel spreadsheet, rentable items, or even a physical piece of paper to keep track of their parking. 

And far too often, properties are relying too heavily on staff members to handle parking matters that take up a significant amount of time, like enforcement or guest parking.

Moreover, there’s one point that just can’t be ignored: If you’re still using old-school parking management systems like spreadsheets and rentable items, you’re leaving money on the table. 

So the parking management we’re discussing here that delivers positive ROI is a technology-led solution that automates all aspects of parking operations, improves resident experience, and unlocks new revenue streams.

Setting the stage: Residents value good parking

Delivering on resident expectations should be a main priority for any multifamily property, and parking is one area of the resident experience that is especially critical to consider here. 

65% of property managers cite parking as a top concern among residents. Whether it’s for existing residents or prospective residents, providing a simple, reliable, and flexible parking solution has a direct impact on the success of your property. 

Part of this is due to reputation. Properties have reported a 44% increase in their reputation scores after fixing their parking problems. And this boost in a reputation score can trickle into several different areas, boosting not only the number of new residents, but also leading to more renewals from existing residents.

But we know you want the hard dollar amounts, so let’s talk more about some real-world outcomes that Parkade's parking management software delivers. 

So, what do the numbers say about the ROI of parking management software?

Long-term net parking revenue for stabilized buildings

Once properties implement a system to help them optimize pricing and management of long-term parking, they see immediate gains in their long-term parking revenue. The average 6-month increase in net long-term parking revenue for the cohort of 7 properties we sampled was 24%, translating into thousands of extra dollars. 

Long-term net parking revenue for lease-ups

Better parking management also empowers properties to far outperform their projected revenue from long-term parking when they’re in the lease-up phase. 

On average, properties from the cohort we sampled estimated that they would bring in $15,925 on average from long-term parking revenue per month. But thanks to Parkade helping them optimize their parking strategy, better enforce their parking rules, and keep a better record of who is parking where, the average revenue from long-term parking was $23,450 on average, which is a 47.3% increase from the estimates in their pro forma. 

Total net parking revenue for stabilized buildings

For buildings that are already at full occupancy, the average increase in parking revenue sits at 31% once they implement Parkade’s parking management solution. 

Revenue metrics for lease-ups

The best time to implement new parking management systems is at the inception of the building. Getting parking right from the beginning ensures that you are maximizing total parking revenue from day one, as well as establishing a positive reputation around parking. Many properties underestimate the revenue from long-term parking and may often leave out potential short-term parking revenue altogether. 

When a few properties we worked with during this phase were estimating parking revenue at the start of their lease-up, they estimated around $35,000 on average. But the results, since they decided to go with Parkade right from the start, blew those numbers out of the water. In reality, they were able to bring in closer to $58,000 on average, which is a 66% increase from the estimates.

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Short-term parking: An opportunity

The boost in revenue continues to be apparent when you zoom out to look at short-term parking, too. Short-term guest parking can be one of the most underutilized revenue streams, and represents a huge opportunity for multi-family properties to tap into. However, it's historically been very difficult or impossible for properties to see this revenue without parking management software that automates the process.

Especially in popular areas, like city centers or near shopping malls and sporting arenas, there’s often a high demand for short-term parking. When properties put a system in place to monetize this guest parking, they can unlock hundreds or even thousands of extra dollars per month. 

Automating guest parking

Without a good system in place to manage parking, many properties often leave guest parking as a free-for-all (meaning they don’t make money from it), or if they do attempt to monetize guest parking, it turns into a massive beast to handle. 

Erica, a property manager at Thrive Properties, told us about her pre-Parkade experience with guest parking, preventing them from delivering on a key resident need: “There was no world where we were doing short-term parking by the hour or even by the day because there was just no way to manage that.”

If you have a complicated or inconvenient system for guests to reserve parking, especially one where they have to walk into the office during office hours, guests are often more likely to try to get away with not paying for parking. (And if you don’t have a great system to enforce parking, they may very well get away with it).

With the right parking system, you’re able to give guests a flexible, 24/7 solution, removing any previous barriers that may have caused them to break the rules out of convenience. 
Maximizing guest parking availability

Another way that manual parking management may stand in the way of effectively monetizing guest parking is the inability to accurately track how many spots you have available for guests to reserve in the first place. 

Taylor, the property manager at Strata and Venue, shared her experience of desperately needing more guest parking and discovering they had a full 50 more open spots than they thought. 

“We actually had way more spots that we could have used for guest parking, but we didn’t know that because of the way we were using our parking system. Not to mention, we wouldn’t have the system to leverage them without a Parkade.”

When your parking management system gives you an accurate, real-time view of available spots, you can leverage guest parking to its full capacity.

Utilizing idle parking spots

A reliable parking-management system also allows you to make the most use of every single spot available. With technology that uses smart inventory management, properties can release idle or unassigned parking spots into the system for short-term use. So spots that would have otherwise been sitting empty between leases can suddenly be leveraged as an extra revenue-generating spot in the meantime. 

Net revenue for short-term guest parking

When properties have a great system to implement paid guest parking, without putting too much strain on their staff, they immediately see a boost in revenue.

They’re able to turn an operation that was perhaps bringing in no money — or some revenue, perhaps at the expense of staff time —  into a significant revenue source with little-to-no staff involvement. 

On average, Parkade customers experience a 303% increase in their guest parking revenue after Parkade fees. And there were some properties that saw almost a 400% increase.

Opex (operational expenses) savings

When handled manually, parking management can steal hours from on-site property management teams every week. Between fielding requests or complaints from residents, tracking down parking records, walking the lot to enforce rules, handling guest parking, and manually inputting rentable items, parking can quickly balloon into one of the most time-consuming tasks for staff.

Parking management software can automate away a lot of the most tedious aspects. For example, Parkade gives residents self-service access to reserve and pay for parking (while allowing for any rule sets the property wants to enforce), provides hands-off enforcement support, and even automates gate access via the app so that teams don’t have to worry about distributing or replacing clickers. 

Properties have seen that the time teams no longer spend on parking leads to a direct decrease in operational expenses. As a result, they can redistribute those team members' time to more meaningful tasks.

On average, we’ve seen properties decrease their operational expenses by $60,000-$100,000 from savings on parking operations alone. This means that they were able to save what’s equal to a full-time employee’s salary. 

Annual NOI improvement

All of the revenue metrics mentioned up until this point have been after Parkade's fees. 

When you roll everything up together — both the increase in revenue (after fees) and the opex savings — investing in parking management software has an incredibly positive impact on annual Net Operating Income (NOI).

Whether teams are looking to calculate their property value, secure financing, make operational decisions, or pitch to investors, NOI is one of the most critical numbers to boost. 

By coming at NOI from both sides, in terms of opex savings and revenue generation, parking management technology is extremely low-hanging fruit when it comes to boosting NOI. 

At the Parkade properties we surveyed, teams saw anywhere from a $66,000 to $126,000 improvement to their net operating income from parking alone. 

While parking may not seem like it deserves to be the biggest priority for many properties, the numbers tell a different story. By investing in a proper parking solution, properties are able to significantly improve upon all of their business goals, whether it’s boosting revenue, streamlining operations, improving resident experience, or all of the above. 

About Parkade

Parkade is the #1 parking management software for multi-family buildings. With our resident-facing app and staff dashboard, parking runs itself. Your team will boost revenue, reduce time spent on parking, and improve experience for residents and guests, all without lifting a finger.

Explore our features below, built for communities just like yours.

Resident Parking

Track all resident assignments and easily collect payments

Seamless Visitor Parking

Guests securely book parking last minute, or in advance

Gate Integration

Let parkers open the parking gate via our mobile app

PMS Integration
NEW!

Sync Parkade with your property management system (PMS)

24/7 Enforcement

Parkade automates enforcement, and we even calling for towing

Custom Parking Rules

Apply your preferred parking rules and prices automatically

Revenue Management

Explore our suite of revenue-boosting tools for parking

Public Parking

Located in a busy area? Optionally rent excess parking to the public

Ready to transform parking?

Ready to optimize your parking operations and start seeing the immediate ROI?

Reach out to schedule a demo now.

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