ParkWise

While city dwellers could spend hours debating the proper etiquette of parallel parking, we can all agree on one thing: finding street parking in a city can be a nightmare. Several platform-based startups have launched to disrupt the status quo, and several of them have been shut down by regulators. ParkWise’s platform solution, however, is surviving the regulatory environment.

About ParkWise

Around the time that Boston City Council passed legislation to effectively ban another parking app (Haystack), ParkWise announced its entry into the space [2]. ParkWise is an app that helps users find open public parking spaces and manage other difficulties associated with on-street parking. Users can view a map that overlays street cleaning schedules, open parking spots, and soon-to-be-open parking spots. The app also lets users keep track of where they parked and notify others when they’re about to leave their space. [3]

Value Creation

The value for users comes from solving pain points associated with street parking: quickly finding a spot, being warned about street cleaning, and keeping track of the car. Users can open the map as they approach their destination to locate a spot, check for street cleaning conflicts, and mark where they last parked. This could save several minutes per day of circling the block to find a spot or walking around it to find the car. It could also save users from being ticketed/towed on street cleaning days.

The platform could create value for businesses through location-based advertising. The app tracks when/where someone is about to exit their car and walk down the street, a perfect opportunity for the Dunkin Donuts around the corner to trigger an impulse purchase.

Value Capture

As with most early platform businesses, ParkWise is not trying to capturing value. The app is free to download and ParkWise has no apparent revenue streams. Many believe that ParkWise will monetize its model through advertisements once it has a large installed user base [5]. This could be a promising option because ParkWise’s real-time location information could be used to better target users with location-specific ads.

Commentary

Network effects are very strong with this platform. A high number users is critical to maintaining complete, timely information about parking availability. The size of the installed user base will similarly affect the value proposition to businesses. To acquire early adopters, ParkWise offers the app for free and attracts users through features that function without a large user base. Reviews in the App Store/Google Play indicate that people install the app for the street cleaning or car tracking features alone [6, 7].

ParkWise’s approach to value capture could be fairly unique in the space of parking apps. Other apps allowed users to “sell” their space and captured a portion of that revenue, which received catastrophic backlash from the public and city officials. Haystack, for example, was chided for profiting from the sale of public property and creating inequalities in access to a public good [8]. By shifting to an ad-supported model, ParkWise will profit from the location information of users as opposed to the access of public property. This may explain why ParkWise has received a warmer reception than competitors [9].

Another aspect worth noting is how ParkWise leverages technology to avoid relying on crowdsourced information. Without this technology, users could open the app to find a spot but not report where they’ve parked or when they’re about to leave. In fact, I imagine this would likely occur because ParkWise does not allow users to “sell” a space. Instead of relying on users to report information, ParkWise has an algorithm that determines when someone has parked or is leaving a space based on changes in their speed [9]. This means that anyone who uses the app passively contributes information. I wonder if ParkWise could–or may need to–partner with complementary apps (e.g., ParkBoston) to leverage location information of other installed user bases.

Summary

Despite strong regulatory opposition to disrupting the street parking system, ParkWise has entered the space with a platform business that is palatable to city officials. Though it currently delivers some aspects of its value proposition, it will need many more users to provide useful parking availability information and eventually monetize through ads. Its ability to quickly grow this user base will be a key risk. It will be interesting to see what strategies ParkWise pursues going forward to mitigate that risk.

 

Sources:

[1]  http://basementrejects.com/wp-content/uploads/2014/04/seinfeld-season-3-22-the-parking-space-george-costanza-vs-mike-parallel-parking-pull-in-back-in-jason-alexander-lee-arenberg-review-episode-guide-list.jpg

[2] http://bostinno.streetwise.co/2014/08/25/parkwise-north-end-city-of-boston-parking-app/

[3] http://parkwise.us/

[4] ParkWise press kit

[5] http://www.betaboston.com/news/2014/09/08/ylsned-parking-apps-that-boston-may-not-ban/

[6] https://itunes.apple.com/us/app/parkwise-street-parking-made-easy/id904568698?mt=8

[7] https://play.google.com/store/apps/details?id=com.tatinfotech.northendparking&hl=en#details-reviews

[8] http://www.betaboston.com/news/2015/06/10/the-endless-saga-of-haystack-an-illegal-app-that-tried-to-sell-public-parking/

[9] http://www.betaboston.com/news/2014/09/08/ylsned-parking-apps-that-boston-may-not-ban/