Fast Track to R.O.I.
Sensor-Based Parking Is Smart Business
COVID-19 has had a pronounced effect on U.S. cities of all sizes, leading to increased expenditures and reduced revenues virtually across the board. The projected hit to U.S. economic growth from the ensuing recession will exacerbate the situation, presenting even more challenges for cities as they struggle to maintain structural balance.
While the federal relief package is designed to help state and local governments in the near term, the timing and support remain in flux. This uncertainty places more pressure than ever on liquidity levels, and is forcing many communities to look for alternative sources of potential revenue.
In the vast majority of cities, parking stands out as a particularly under-leveraged source of funds. The average city only collects about 60% of the maximum possible parking revenue from each parking meter and typically captures less than 8% of violations in total.
It doesn’t need to remain that way, however. Cities can tap into parking’s revenue-generating potential by upgrading their parking technology. A reasonable expenditure in the short-term can soon lead to an expeditious R.O.I., and quickly become the much-needed influx of revenue cities seek—typically in less than two years.
Upgrading metered parking to a sensor-based system can improve the 60% collection rate immediately while making enforcement far more efficient overall. Fybr’s Smart Parking Solution costs less than $0.43 per day per space, making single space vehicle detection a means to begin generating incremental revenue that can be used to support further revenue-generating and cost-cutting efforts.
When looking at the numbers, the benefits of Fybr’s Smart Parking Solution become clear. The lift required to pay for the system has modest requirements: cities can issue 3.4 more parking tickets per space annually, raise parking rates in high demand areas by as little as $0.05/hour, or arrive at some combination of the two. With an average ticket costing $45, it’s not difficult to see how that adds up. Additionally, cities could expect to see an increase in paid compliance of 3.4% from people who normally don’t pay. The flexible nature of Fybr’s Smart Parking Solution allows communities to increase the rate per hour in response to demand.
The average city only collects about 60% of the maximum possible parking revenue from each parking meter and typically captures less than 8% of violations in total.
Fybr’s platform and single space sensing is more than an affordable and profitable measure to enact—it’s also among the easiest to implement. It requires only minimal adjustments to the current city policies and procedures. Plus, the high-value benefits of significantly reduced congestion, enhanced safety, lower carbon footprint, and the impact of a smart parking system on a city’s environmental sustainability and livability benefit the entire community, including the drivers themselves.
Among under-leveraged sources of income for cities, parking stands out. It’s something nearly every city possesses, yet relatively few optimize as a source of revenue. Now more than ever, it’s time for cities to realize what their parking is worth.
* Fybr’s fully-inclusive cost to City A for 1,000 sensors averages $225 per sensor installed with warranty, plus $9 per month per sensor, for a five-year contract to provide parking data and various applications. This is only $153 per year per sensor-equipped space, $12.75 per space per month, 42.5 cents per day.
A recent study found that, in the United States, drivers on average lost 99 hours in 2019 due to congestion—two hours more than in 2017, and the highest annual amount measured to date. Urban growth trends further complicate the picture—currently over 55% of the world’s population lives in urban areas, and by 2050, that number will exceed 68%.
It’s no surprise that thousands of U.S. cities are anticipating significant budget cuts this year. The widespread financial chaos isn’t sparing any sector, and communities large and small are hurting. Sharp declines in tax revenues due to closing businesses are already causing cities to slash expenditures and, barring new developments, we can soon expect reductions in local public safety agencies, police department staff, public works, and more. It makes sense then, that investigating ways to rapidly inject revenue into cities has taken on a new urgency.
Cleanliness has become a new national obsession. And for good reason, as arresting the spread of COVID-19 and “flattening the curve” requires both sanitary diligence and social distance. Yet as people adopt these new preventative measures, the technology we rely upon often lags behind. In the case of parking meters, perhaps too far behind to keep pace.