How do parks make money with a city?

Interview with Park-Now boss : How Daimler and BMW want to earn money looking for parking spaces

"If you don't care about the topics of parking and charging, you haven't considered two important parts of the urban ecosystem," says Jörg Reimann in an interview with Tagesspiegel Background. Reimann runs Park-Now and Charge-Now, two of four business areas of the Mobility joint venture between BMW and Daimler, which was concluded in February. This also includes the Share-Now car sharing division (formerly Car-2-Go and Drive-Now) and the Free-Now taxi and ride-hailing service.

"Many cities have not yet properly recognized the value of parking space management as a tool for transport policy," says Reimann. “One is sure to shy away from including the citizens.” In an international comparison, the parking fees in Germany are still “very low”.

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Park-Now offers the app-based search for parking spaces on the roadside and in parking garages as well as cashless payment. Together with the Smartparking Association, the company approaches cities and tries to convince them of the advantages of digital parking. If this succeeds, all competitors will also have access. The providers collect a commission for each parking process, the fees flow to the city.

The subsidiary of BMW and Daimler is in competition with other providers, such as We-Park (Volkswagen) or Easypark. Park-Now is the market leader in the USA, Great Britain and the Netherlands. If you include the German market with more than 600,000 registered customers in almost 200 cities and 60 parking garages, Park-Now has 36 million customers worldwide. 100 German cities have been added since 2018.

Smart traffic management in London and Paris

Metropolises such as New York, London and Paris show that parking space management can be made smarter without increasing prices across the board. Park-Now has been active there for a long time. "I am not advocating a general increase in fees, but a different distribution of the burden," says Reimann, referring to the international experience. "A lot of traffic, high air pollution must mean: higher prices."

Take London, for example: Park-Now offers CO2-based pricing there. "Diesel drivers automatically pay more than electric drivers," says Reimann. "This has measurable effects on parking behavior, but also on purchasing behavior."

Or Paris: Here the company not only provides the data platform for parking space management. All parking meters and controls and monitoring of air quality are also connected. "The city and the arrondissements access this data pool in order to flexibly control parking fees."

The larger the number of customers, the more attractive smart parking providers become for cities. "Once we are a relevant player in a city and have the anonymized data of the parking customers, we can also very well predict when and where which traffic flows," says Reimann.

The CEO hears the question of whether Park-Now is all about more cars and more parking spaces in his talks. “We offer an ecosystem that offers a lot of attractive alternatives to owning a car,” he says.

It is not about more parking spaces, but about better distribution. “For example, we will see more Park & ​​Ride hubs on the outskirts of the city in the future.” At the same time, Reimann also admits: “Without cars, we no longer have a business model, that's clear.” For the business model, however, it doesn't matter whether someone owns a car or just parts - that applies to parking and charging.

"We are there - the customers are still missing"

The Charge-Now business is still in its infancy, because electromobility has not yet found its way out of its niche either. “We're there - all that's missing is the customers. Hopefully that will soon change with the ramp-up of electromobility, ”Reimann hopes.

The BMW-Daimler subsidiary offers - similar to Volkswagen, Renault or Tesla - its own tariffs for charging electric vehicles that only apply to certain models. The vehicle-independent business with end customers, such as Plugsurfing or Hubject, is to follow.

Charge-Now is a roaming provider for many different electricity suppliers and charging station operators, more than 380 worldwide. The customer does not have to deal with confusing tariffs and billing methods. There is a large overlap with the parking business. "Without an integrated charging facility in the parking space, the conversion towards electromobility will not work," believes Jörg Reimann.

Charge-Now covers a good 95 percent of the German charging infrastructure. “We manage the jungle - that's our business model.” This jungle of tariffs requires a mixed calculation of expensive and cheaper providers, but the customer only receives a charge-now invoice at the end of the month. There are two tariff models to choose from. "As long as the market is so opaque, we bear the risk of earning more with one provider and less with another."

Investments put to the test

Charge-Now also offers white label solutions for other brands through its subsidiary Digital Charging Solutions. For example, for customers of the Audi e-tron, Mercedes-EQC drivers or VW commercial vehicles. "Last week we reached an agreement with another international automobile manufacturer," says Reimann. He doesn't reveal more yet.

Of course, Jörg Reimann also noticed something of the turbulence in the joint venture, which primarily affects the car sharing business. “The auto industry is going through a difficult time. It is therefore logical that our shareholders should also take a close look at every investment, ”he says. Park and Charge Now continue to have "very solid support".

The limiting factor are speed and market expertise, "but in no way our financing". The strategy of expanding the business has not changed. “Of course, we are also required to act as efficiently as possible, but we are not talking about savings anywhere.” At the end of 2020, he plans to employ 750 to 800 people worldwide in his two divisions. Today there are 700.

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