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Six trends driving transformation in the parking industry

The COVID-19 pandemic has greatly affected travel and transportation. Because more and more people are working from home, the use of personal vehicles has been reduced and hence the need for parking spaces has fallen. The car parks at airports are empty and shopping has moved online. This change came unexpectedly and has hit the parking industry with full force. According to Arvato Financial Solutions statistics and other reports, the number of parking transactions fell sharply in spring. However, there was a recovery in summer and autumn. As far as the future of the industry is concerned, some surprises can be expected.

In September, the Svepark 2020 virtual Swedish event brought together around 100 experts from the parking and mobility industry in a digital space to share knowledge and experience.
Together with a colleague from AfterPay, our pay-after-delivery solution, Peter Wilmenius (Arvato Financial Solutions) gave a presentation on “Mobility in transformation – payment solutions for the future”, in which we examined key trends in mobility and the role of the parking industry in this development.

Experts and researchers have identified a number of development areas that they believe will have an impact on the industry in the short and long term. Here are some trends:

  • Sustainability – public transport is continuously being expanded and new commuter parking spaces are being built at the same time in order to achieve the climate protection targets under the Paris Agreement and to reduce traffic in the inner cities. If we also consider the introduction of low-emission zones in the big cities, this has a combined impact on the number of cars in urban traffic and the demand for inner-city parking spaces at certain times of the day.
  • Digitalization – this has already meant that parking timers and parking columns are increasingly being replaced by apps and ANPR. However, we are only at the beginning of a major development. Surveys from other countries have shown that time gains and a reduction in driving distances of up to 30 to 40% can be achieved when apps are connected to parking spaces and provide information about free parking spaces in real time. This is combined with a navigation aid and the option of reserving the parking space. These smart features can also influence the future use of these apps by consumers. In other words, the trend is leading away from purely parking apps to the administration of additional services such as charging electric cars, renting e-scooters, organizing car pools or managing the entire journey via app; investments that enable both cost savings and new revenue streams.
  • Electrification – the proportion of electric cars will increase to 40% by 2030. A prerequisite for this growth is that there is the possibility to charge vehicles in the living environment, but also that additional charging options are provided for conventional short-term parking.
  • Millennials – this generation is expected to account for 75% of the total workforce by 2025. This demographic group is more environmentally conscious and prefers values such as freedom and flexibility over ownership. This promotes the development of subscription models in the automotive sector as well as the sharing economy as a whole.
  • Rental and sharing economy – great growth can be seen here, from micro-mobility services such as e-scooters and bicycles to car sharing directly between consumers or car manufacturers and consumers. This year, car manufacturer Lynk & Co. will already be entering the market in seven countries, including Germany, and will present new subscription solutions. All vehicles will also have an integrated sharing platform following the peer-to-peer approach.
  • Autonomous vehicles – very rapid development was generally expected here, but safety issues and new legal regulations are delaying the introduction of this technology. Some car manufacturers believe that we will see self-driving cars on motorways in the coming two years, but it will take a while to roll out in city traffic.

 

 

Overall, the parking industry is facing challenges, but also major opportunities such as:

  • a working environment with less attendance at the external workplace, i.e. fewer trips to and from the workplace. Parking will occur more at home.
  • the increasing rethinking and growing proportion of the sharing economy combined with simultaneously declining ownership of vehicles. This implies more efficient use, but also higher demand for parking spaces in inner cities.
  • the more efficient use of public transport, which competes with passenger car transport.
  • And for the future – autonomous vehicles

At the same time, there is significant development in the parking industry, in which private and municipal providers are implementing many interesting projects. In the coming months and years, we will see how conventional parking spaces will undergo a transformation process and more services will be offered around them that create added value for mobility. At Arvato Financial Solutions, we are proud to be part of this ecosystem, to contribute to the further development of this transformation together with our business partners and customers and to handle suitable billing solutions and outstanding receivables.

Read more: APCOA is waiting in the wings, with its ambition and experience, for the European parking market to be ready for a more convenient customer journey.

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