Rise of parking app makes the rich richer as motorists struggle | Automotive
AThis summer, exasperated motorists tapped their phones, trying to download and install yet another parking app. Then comes the endless drudgery of entering card and license plate details, which can ultimately be derailed by a poor phone signal or glitchy app.
Anti-ageism campaigners say navigating the process can be overwhelming for some seniors who, in the words of veteran consumer champion Dame Esther Rantzen, are at risk of being “housebound”.
Those who hate this seemingly inevitable aspect of the modern world will take little or no comfort in knowing that the rise of digital parking is making some rich people even richer.
Ten members of Germany’s sprawling Porsche car dynasty, which controls Volkswagen, were named in accounts filed at Companies House this month as “persons with significant control” behind PayByPhone, one of the most popular parking apps. most successful in the UK. It paid dividends worth £13.6million in the year to the end of December 2020, the documents show.
The accounts for the past year show a return to profit after the impact of the pandemic, with a profit of £172,000 thanks to a 24% increase in revenue to £4.2million.
Local government revelations show the company has spread across Britain, winning contracts with councils including North West Leicestershire, Luton, North East Lincolnshire and Sheffield, to name a few.
Its website lists more than 120 areas where it collects money from drivers, encompassing hundreds of local authority sites, as well as private businesses and the National Trust.
But PayByPhone is just one player in a booming market that includes Saba, Just Park and UK market leader RingGo, which has contracts with the City of London, North Devon, Leeds and Nottingham, and counts thousands of locations on its website.
RingGo is part of Park Now Group, which was owned by another German car giant – BMW-Daimler – until it was sold in 2021. The buyer, EasyPark Group, is in turn owned by Vitruvian Partners, a pan-European capital- investment. with approximately £8 billion in assets.
Vitruvian’s 12 members – senior employees entitled to a share of its profits – have pocketed payouts worth more than £100million in the past two years alone, thanks to smart investments such as EasyPark .
The accounts of the Dutch parent company of Park Now, a subsidiary of EasyPark, show that it is doing something common to technology companies in an effort to dominate their sector, such as Uber and Tesla: grow very quickly while suffering heavy losses. .
Revenue in 2017 was €46m (£39m) – including the US and Europe – but had doubled to €92m in 2019, the latest period of reference before the pandemic affected sales. Over the same period, a pre-tax profit of €1.1 million turned into annual losses of more than €30 million, largely due to a tripling of personnel costs as the company annexed more and more of parking lots.
The accounts also reveal exactly where Park Now makes the bulk of its revenue. In 2019, €7 million came directly from councils paying for its services, but the vast majority, another €79 million, came directly from app users. EasyPark declined to comment.
Councils that use these services deny that they are losing valuable revenue that could be spent on public services. A spokesperson for Leeds City Council said it did not have the capacity to operate its own app-based parking service.
The local authority benefits, she says, as they collect the parking fees, with RingGo taking a 15p transaction fee. Customers who pay cash will not pay these fees.
In Nottingham, a council spokesman said using PayByPhone saved authorities money, reduced incidents of vandalism and theft at vending machines and meant there was no need to have vehicles on the road to collect money.
There may, however, be another advantage to the advice of a system that some find more difficult to use. Data obtained under Freedom of Information legislation earlier this year showed councils collected £158million in parking fines in areas with a cash option. In those that didn’t, the figure soared to £257m.
What can be lucrative or pragmatic for municipalities can be stressful for drivers, especially in the growing number of regions where cashless payment is the only option.
Earlier this year, music writer Pete Paphides was inundated with stories of bad experiences with digital parking, after tweeting about how her 84-year-old father struggled to use an app while trying to arrive on time for a friend’s memorial service in Birmingham.
“It was him and a bunch of other former Cypriots, all phoning their kids because there was nowhere to park and they thought maybe they could contact the company and explain “, said Paphides. “But of course you can’t reach a human being.”
Paphides’ father died before he could pay the resulting fine, forcing the writer into a long and unwelcome dispute with a debt collection company, requiring him to provide a death certificate.
Asked about the options available to help the elderly in cashless places, Nottingham City Council said – like other local authorities – had set up pay points at local shops, where drivers could hand in cash. bills or coins.
However, this option can be confusing, time-consuming and require extra physical effort for the elderly or disabled.
Caroline Abrahams, charity director at Age UK, said the charity had discovered that many older people did not have smartphones or credit cards, meaning car parks that do not take money is of no use to them.
“If they also have mobility issues, it can be even worse, even preventing people from leaving their homes altogether,” she said. “We are still light years away from a world where digital technology can help everyone, and public bodies and companies that run car parks should recognize this.
“Operators can save money by not handling cash, but it’s the digitally excluded in their communities, many of whom are elderly, who pay the price.”
There is another route councils could take, one prominently on the harbor arm of the Kent seaside town of Folkestone. The land is not owned by the council but by a private company, the Folkestone Harbor & Seafront Development Company, whose website proudly states: “Our parking site does not use RingGo payment.
Instead, the company – owned by Sir Roger De Haan of the dynasty behind the 50+ Saga brand – hired a small company to provide an automatic number plate recognition system, which it plugs into its own payment website.
Although using the internet remains the main point of contact, no app downloads are required and the site is much more intuitive than an app, closer to buying from an online retailer.
Machines that accept cash are also on hand, as is a service agent who can help with any issues.
Luke Bain, director of the Folkestone Harbor & Seafront Development Company, said not only was the company making money from its system, but visitors were finding it easier.
“We didn’t want people to associate our parking lot with penalty notices and a fine,” he said. “I expect councils just can’t be bothered to do anything different from the norm because they have limited resources.”