Mark Lawrence founded his company after receiving heaps of parking tickets in his hometown of Chicago. SpotHero was born in the Windy City, where people may love to drive, but parking can be painful. Surprisingly, Lawrence found that the challenges facing the parking industry had nothing to do with availability of spaces, but rather the difficulty in finding them. This meant drivers would often be left circling the block looking for parking.
The first phase of SpotHero functioned as an Airbnb for parking, connecting businesses with available spaces (i.e., churches, schools, banks) with would-be parkers. After validating the idea and building reliable network effects, the platform quickly expanded its partner list to include parking companies and garages, which now comprise 99% of its offered inventory.
Balancing the scales
SpotHero offers parking at 3,100+ locations spread across 20 cities. Lawrence found that the market had plenty of parking supply, but needed a hand in optimizing consumption.
To that end, the company's goal has been to create a better parking experience for drivers while serving as strategic business partners to parking operators. Parking availability and pricing have long been a blind spot for drivers, and increasing visibility for this market are a primary objective for the company.
"Now, drivers have an easy method for discovering and booking parking in advance, ensuring they can get where they need to go with confidence," said Lawrence.
Connecting all of these disparate spaces is no simple feat. SpotHero accounted for this by building key integrations into their operator API, making it possible to connect the different technologies critical to the industry.
"We are dealing with a highly fragmented market in terms of technology with a very diverse spectrum ranging from cash-only to sophisticated systems," said Lawrence.
Some garages run their booking systems in the cloud, while others host private server systems. Half of parking companies in Los Angeles and a third in New York City still operate on a cash-only basis and rely on paperwork for tracking. SpotHero focuses on building a flexible platform with a low barrier to entry that can work with any operator's existing infrastructure to bring the market closer to its true equilibrium.
Pricing is parked
Parking companies have traditionally done little to gauge how their prices bear against the market. SpotHero's research has shown that pricing for parking has largely remained static, neither rising or falling to match the level of demand.
Accordingly, SpotHero collects utilization data and shares it with parking operators to foster operational efficiencies, including better pricing and increased bookings. Prices are set by the parking companies, so they retain end-to-end control over their business.
However, by increasing visibility into demand and offering data-driven insights, operators can better manage their inventory and maximize their return. And since SpotHero monetizes by taking a percentage of the fee for every parking space booked, it has a vested interest in its operator partners' success.
Driving the future
Autonomous vehicles are a hot topic, and Lawrence is optimistic about the potential they offer the parking industry. Although driver behaviors will undoubtedly change as more and more driverless cars hit the road, he predicts significant continued demand for parking. After all, self-driving vehicles will still need parking within urban areas.
"The way our cities are set up today, cars simply can't drive around all day," said Lawrence. "Even for electric cars, the current grid can't support them all at once, and we're not set up to absorb the strain on energy resources. There's a lot more that needs to evolve than the automotive technology alone."
In the meantime, Lawrence notes, cars will become increasingly connected. He envisions a future in which self-driving software will hook directly into SpotHero's API and sync driver schedules with available parking. When cars needs to park, they can easily locate the most viable parking options, optimized for the vehicle owner's' preferences for cost, proximity, and length of stay, and simply roll into the lots or garages.
Partnering with SpotHero today--putting inventory online and becoming increasingly data-driven--ensures a much easier transition for operators wherever the future takes us.
There's a lot to be done, yet Lawrence is exuberant about the opportunity ahead. SpotHero was founded five years ago, but the 31-year-old CEO believes the company is just getting started in an ever-evolving industry. Keep parking, SpotHero.