Can SpotScout Take the Pain out of Parking?

2/12/08Follow @wroush

Finding parking in a busy urban area like Boston can feel like a high-stakes game of musical chairs—except that when the music ends and every parking spot is filled, there are still tens of thousands of people driving in circles.

SpotScout, a service slated to launch this month in Boston and one to two months after that in San Francisco and New York City, is designed to give users an advantage in the cut-throat competition for parking spots. In the process, SpotScout founder and CEO Andrew Rollert wants to help save the environment—and generally make it less of a hassle to own a car in the city. “I see the value of a car as being directly tied to the availability of parking spots,” Rollert told me last week. “If a car doesn’t have a parking spot in the area it’s going to, that devalues the car.”

Like so many dot-com-era and Web 2.0 businesses before it, SpotScout uses the Internet and mobile communications to make an existing marketplace more transparent and efficient. EBay did it, for example, with the marketplace for the junk in your closet that might actually be somebody else’s treasures. SpotScout is doing it for the marketplace of information about open parking spaces—many of which go unfilled simply because people don’t know they’re there.

Here’s how it works. People who own parking spots—whether they’re commercial garage operators or just private citizens with driveways or other spots that are empty during certain hours—can upload that information to SpotScout. (They’re called “SpotCasters,” in SpotScout’s parlance.) Then, using their desktop computers, laptops, or Internet-enabled cell phones, people seeking spots— or “SpotScouts”—can tell the service where they need a parking spot and when; see a list of available choices, organized by cost, user rating, walking distance to the final destination, or other criteria; reserve a spot, effectively taking it off the market; pay for the spot electronically, from their SpotScout account; and receive a text-message confirmation, sometimes accompanied by discount offers at businesses near the parking spot.

The spot-finding service (not counting the cost of parking) is free to SpotScouts, but SpotCasters pay the company a small percentage of each transaction. Rollert also hopes to earn revenue from the location- and time-based discounts offered to parkers. “A lot of people have tried location-based marketing and it hasn’t worked out,” he says. “But the key ingredient for us is that we’ve found you a parking spot and you’ve paid money to say, ‘I need you to take that spot off the market’—and that means you’re going to show up at a specific time. With other location-based direct marketing systems, they don’t really know if or when you’re going to be there. But because our users have told us what time they’re arriving, we can say that, for example, ‘Between your parking spot and your destination there are 32 businesses, and here are a few who would give you a discount if you came in just after 2:00 p.m. or right before 4:00 p.m.”

SpotScout CEO Andrew Rollert, being interviewed on NBC’s Today ShowPeople who have heard about SpotScout’s ambitious plan, which has been under development for more than two years, generally seem to welcome it, or any other idea that might make parking easier. Rollert was recently interviewed by NBC’s Today Show, and the company has been getting pre-launch publicity for months from the likes of The Boston Globe, The New York Times, USA Today, CNN, MSNBC, CNET, and NPR. Rollert’s presentation at the most recent Web Innovators Group gathering in Cambridge on January 29 won the audience-favorite vote in a text-messaging-based instant poll.

All this buzz may help attract some much-needed venture capital for SpotScout, which has been self-funded up to now. But raising capital is only one of the hurdles the startup faces on its way to generating a significant volume of parking transactions. Another is the classic chicken-and-egg problem. Drivers may not use the service unless SpotScout has signed up enough garages to offer a decent range of choices within walking distance of their destinations. But garages won’t have much incentive to sign up as SpotCasters (which means having an active Internet connection in the garage, tracking the number of available spaces, and the like) until there are a lot of people using the service.

Rollert hopes old-fashioned competition will take care of the second problem. “Once one local garage can take Internet-based reservations, maybe their competitor across that street hears from somebody that they booked their spot in advance, and this competitive practice will take place, just like it did with Hotels.com,” says Rollert. “Once there was aggregation, the Marriotts and the Hiltons said, ‘Okay, we can’t afford to be left out of this picture.’”

And there’s another element of SpotScout’s business plan that seems to be asking for trouble. Say you’ve found a precious on-street parking spot on Newbury Street, Boston’s posh fashion row, and you know that you’ll be leaving at 3:15 p.m., when your meter runs out. You can send that information and the spot’s exact location to SpotScout, which will sell it for a buck or two to someone else who’s looking for parking in that neighborhood. The transaction is anonymous and the money gets transferred between accounts automatically; all you have to do is leave your spot at the promised time.

At first blush, it sounds like a good idea. If you knew that someone was about to vacate their on-street parking spot, you wouldn’t have to drive around in circles looking for one. (And you’d save gas and reduce your emissions in the process.) But in practice, it’s easy to imagine the service generating controversy—if not outright fisticuffs. Think about it. If you’re a SpotScout user and you’ve already paid for the information that someone is leaving their Newbury Street spot, you’re likely to feel a little bit entitled to that space. If someone else chances upon the open spot 10 seconds before you arrive, you’re likely to have a few choice words for the parking poacher. It’s not hard to imagine things getting out of hand. TKOs in front of DKNY?

SpotScout LogoSpotScout goes out of its way to explain on its website that public parking spaces cannot be reserved and thus cannot be guaranteed. People leaving on-street spaces are selling only the information about their departure time—not the spot itself.* (Even that much is illegal in some cities, including New York, Rollert acknowledged in response to an audience question at the Web Innovators meeting.) But while I might be underestimating my fellow urbanites, I predict that SpotScout will have to abandon the on-street SpotCasting feature after the first couple of newspaper stories about this new outlet for road rage. Some things are best left un-monetized.

Rollert, for now, is just focused on getting SpotScout up and running. He says the company has focused its garage-recruiting efforts on Boston, where the service could go live as early as this week, and on New York and San Francisco, where it will be switched on by mid-April. Other cities will follow. “The largest supply will be in Boston, New York, and San Francisco at the beginning, just because of the way people have been pre-registering,” Rollert says. “But that doesn’t mean you won’t find spots in Chicago, Seattle, and Miami.”

Personally, I’m intrigued by, but withholding judgment about, Rollert’s argument that SpotScout is good for the environment. The idea is that if people can drive straight to a pre-arranged parking spot, they won’t spend as much time clogging streets, burning gas, and spewing carbon dioxide. I get that, and it does seem indisputable that there are inefficiencies in today’s system—picture the driver tooling endlessly around Boston’s North End when there may be a reasonably-priced lot with an open space at Faneuil Hall—that an information service like SpotScout could eliminate. Plus, you have to admire SpotScout’s canniness in appealing to drivers’ (and investors’) current concerns about urban congestion and global warming.

My question is about what happens if SpotScout really succeeds in reducing the inefficiencies in parking. Wouldn’t that simply encourage more people to drive into the city, in lieu of options like public transportation, leading to a net increase in traffic and emissions? I’m sure there’s some urban traffic engineer at MIT’s Department of Urban Studies and Planning with the right kind of software to model this question.

Meanwhile, it will be interesting to monitor SpotScout’s growth, once the service goes live, and to try out the service myself. No one likes to be the loser in musical chairs—all the less so if you’ve got a 2-ton metal box that you need to deposit somewhere while you go about your real business. I’ll see you on the road.

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*Here’s SpotScout’s fine print about on-street Spotcasting: “On-street spaces cannot be reserved under any circumstance. Information pertaining to another individual’s departure time may be traded and/or purchased. Purchase of departure information does not allow, or transfer any rights to a space. Furthermore, an individual purchasing said information is not empowered with any additional rights over other parties wishing to occupy that space.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.parkingspots.com ParkingLady

    Another recent addition to the online parking landscape has hit the scene. http://www.parkingspots.com is designed to connect those needing parking and those that have it. Leveraging non traditional parking spots (driveways, condo buildings etc.) as well as more traditional lots, parkingspots.com has been building rapidly across North America since its launch in February. WHile it is not yet mobile, it serves to help connect monthly parkers across Canada and the US. An interesting complemenet to Spotscout, it’s something to keep your eye on…