‘Uberising’ parking to solve traffic woes HI-tRaC
VALUE MINING
The author’s shorthand for Happiness Index, Infrastructure, Talent, Regulations, Access and Capital. The 6 pillars that make the UAE a great place for a startup. This week’s article is about happier parking.
Greetings. The reason that you read this column is probably because you are an entrepreneur or one at heart. Or you have a keen instinct for potentially lucrative opportunities. You’re mostly optimistic and strongly believe that all problems can be solved — with a dash of technology, loads of common sense and an executable concept. Which is why you are most likely to have driven around Naif Road or Khalidiya and thought about the clear prospect to make money by solving parking woes. Apparently, the current system is not working well enough and it could probably get worse.
You’re not alone in thinking that way. MarketsandMarkets forecasts that the global parking management market is estimated to grow from $3.03 billion in 2016 to $5 billion by 2021, at an estimated CAGR of 10.6 per cent. Other unconfirmed estimates place market value at more than $7 billion in the same time frame. This critical situation is stirring up an immense interest in parking-related tech solutions. According to industry data, 30 per cent of traffic congestion occurs due to vehicle drivers struggling to find parking space.
The real story is not in the growth of the parking industry alone. The bigger picture is the completely broken situation in high growth emerging markets. Urban planning in most of these markets has not accounted for the explosion in population, wealth and automobile usage. Beijing, New Delhi and Sao Paolo have amongst the most nightmarish traffic and air pollution conditions in the world. Statista states that China has quadrupled vehicle sales between 2008 to 2016 to a level of 24.4 million. Overall, the Asia market has doubled in sales in this same period. Research from BMI indicates that the Mena market will grow by 7.2 per cent in 2018, above the global average. Brazil will see sales of above 3 million vehicles in 2022, based on the 2016 Auto Industry trends report by PwC.
Nicolas Guillon and Sulaiman Azhar are the co-founders of Nester (www.nester.io). They get straight to the point — parking is a universal problem, all cities throughout the globe are affected. It is estimated that traffic congestions costs 1 per cent of a country’s gross domestic product. That seems so intuitive when you consider that each journey begins and ends with parking. Billions and billions of trips a year. At any point of time, 1 out of 3 cars on the road is searching for parking and it takes an average of 20 minutes to find a slot. Therefore, there is mounting pressure to release the gridlock through the release of parking-related congestion.
They estimate that in the UAE alone, traffic congestion costs more than Dh10 billion annually. This is on the back of the fact that just Dubai alone had over 1.4 million registered cars (2016 figures) and on an average, for every 2 residents, there is one car.
But what seems totally counter-productive in terms of utilisation of space is that 75 per cent of parking spots in residential apartments are unoccupied between 7am and 5pm. In office buildings, parking slot availability increases from 75 per cent at about 5pm to up to 90 per cent from 9pm onwards. Imagine if there could be a creative way to fully use parking space. That’s what Nester seeks to solve. Conceptually you could call it the “uberisation” of parking space or the application of the shared economy to this industry.
In short, Nester aims to be a marketplace that connects parking space owners and parking space seekers. Using the solution, parking owners may be able to rent out their private parking spots when they are not using it themselves. This could allow parking owners to put up their availability schedule and parking rates. Ideally, it could be a source of revenue for private parking space owners, even if it’s just a couple of hours a day.
The solution is also targeted at building owners with unrented apartments or offices. The proposition is to enable them to put unallocated parking spaces up for rent. One benefit for them could be increased retail traffic footfall. Additionally, by allowing their tenants to rent their parking spots, they could generate additional revenues for the facilities improvement and management. The Nester solution would ideally seamlessly integrate with existing infrastructure of buildings, creating “Nests”.
The envisaged user journey is that once the app is downloaded, users can easily search, reserve, pay and access their next parking space from their smartphones. They can potentially get a clarity on where to park in advance and never be late for a meeting, catch up with loved ones and hopefully drive with sense of a peace of mind. It could be a win-win enabler for building owners, carpark operators, residents and the city itself. Theoretically, less traffic, less pollution, less stress, happier people.
The platform is designed to integrate with the building infrastructure. The skills of the co-founders give them an advantage. Nicolas has an engineering background. In 2010, he was the founding director of a systems integration company based in Dubai. He gained a strong experience in parking integration and has worked with multiple facility management and real estate companies in the region. Sulaiman is a University of Wollongong alumni with a Bachelors of Computer Science. He has been involved with startups for the past few years with deep experience in app development. He is passionate about solving the parking problem logically.
The model could scale up to multiple urban conglomerates globally once it builds up momentum in the UAE. This is yet another innovative platform from in5 which continues to build a strong pipeline of startups in the UAE.