Boston Bans Haystack, Nixing Companies That Profit from Public Roads

8/20/14Follow @curtwoodward

[Updated 1:50 pm to add details, document.]
Parking-search app Haystack has been banned in Boston, and any other companies that want to follow in its footsteps will face a similar fate.

The City Council voted Wednesday to ban private companies that try to make money by selling or leasing public roadways without the city’s permission. The new ordinance takes effect immediately and levies a fine of $250 per violation, which could be assessed each day a company is operating in violation of the new law.

The immediate target of the ordinance, mobile app company Haystack, said it would suspend operations in Boston as it seeks to find a workable arrangement with city officials.

It’s a swift reaction to Baltimore-based Haystack, which started offering its service in Boston in mid-July. The company, headed by CEO Eric Meyer, offers a smartphone app that connects drivers who are using public parking spots with those searching for a space.

The central problem is that Haystack allows drivers circling the block to pay someone who is vacating a spot. The money only changes hands when the parking spot is exchanged, and Haystack takes a cut of the proceeds.

City officials recoiled at the idea of a private company harvesting fees for access to public property. While it’s legally acceptable to charge fees for parking on city streets, the government is generally the only entity that can collect those fees.

Haystack countered that it was merely letting drivers pay for access to information about whether a parking spot was about to be vacated, but that bit of legal parsing didn’t convince city leaders.

“They were trying to buy and sell city property that was not theirs to buy and sell,” councilman Frank Baker said before the vote. “I don’t necessarily understand all the apps, but I understand what this one was trying to do.”

A similar standoff happened earlier this year in San Francisco, where officials slapped down apps including Monkey Parking that offered a similar service.

San Francisco was able to point to a specific city rule outlawing that kind of business. Boston officials didn’t have a similar law, but told Meyer that Haystack was still considered illegal in the city. On Wednesday, the city made it explicit by passing the new ordinance.

In response, Meyer said the new law was “a step in the wrong direction for parking innovation, and for innovation of every kind.” But he also said the company would cease operations in the city as it tries to work with local officials “to identify a modified approach to parking issues that can be supported by City Hall.”

Here’s a copy of the ordinance the council approved Wednesday:

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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