José Fenollosa
General Manager Mexico and USA

Smart Parking Creates Efficent Cities

Tue, 11/01/2016 - 14:36

Commercial developments are on the rise in Mexico’s cities and parking is becoming a significant problem in highly densified areas. Efficient automated parking could help alleviate the problem while having a positive environmental impact, says parking solutions provider Meypar. There were 251 commercial developments built in Mexico between 2009 and 2013 with a total floor area of 16 million m2, of which 42 percent was dedicated to parking spaces, according to the Institute for Transportation & Development Policy (ITDP). As of 2015, the number of malls had more than doubled, shooting up to 584 – and with a total 1,800 or so malls in Latin America that makes Mexico the king of commercial real estate in the region. To keep up with the demand, the city would require five times the available space for the parking required by law. Meypar is one of the leading providers of parking solutions in Mexico, and Director General Jose Fenollosa has witnessed this growth firsthand.

“Despite growing demand, various cities throughout the country have tried to outlaw monetized parking in commercial developments,” Fenollosa says. Developers can only pay for these services through parking revenue or by increased prices. Monetizing parking not only helps developers offer security and comfort but it also discourages the use of cars, Fenollosa says. Parking lots and parking meters make the use of a car more expensive, reducing the number of cars on the streets and pollution levels. Companies can also take advantage of their off-peak hours by renting or allowing other companies to use their  parking lots. “Developing smart parking garages allows users to locate free parking spaces and facilitates the flow of traffic. Housing or stores can rent out the parking spaces they do not occupy through the use of technology. The parking sector not only generates revenue, but it also generates jobs,” Fenollosa says.

The Mexican Parking Association is working with the International Parking Institute to voice the needs of the sector and ensure the prosperity of the market. Its biggest concern is the maximum the government has placed on prices. “These prices vary from city to city," says Fenollosa. "The government should instead establish a minimum number of services the company can offer at a certain price. By establishing prices by service and not city, companies will be able to gain competitive advantages and the consumer will choose the services it wants for that price.”

The real estate boom has mainly impacted Mexico City but states like Chiapas and Hermosillo also are growing rapidly. “Shopping developers must keep in mind how much space they will need for parking as well as the revenue they could make from it,” Fenollosa says. “The revenue generated by private parking lots goes back into the maintenance of the mall, which is why more and more developers are  integrating smart parking systems into their developments.” Meypar has seen cases where parking lots were making MX$30,000 (US$1,578) in monthly revenue. After installing an automated system, income increased to MX$130,000 (US$6,842) a month. The discrepancy was attributed to the inconsistencies of the previous payment collection process. “Whenever we install Meypar systems, companies see between a 10-15 percent increase in revenue, even if the system was already automated,” says Fenollosa.

These systems also enhance the customer experience by integrating new payment methods and giving them the flexibility to pay with credit cards, cash or even cell phones, although such technologies require a higher investment from developers. “Credit card rates in Mexico are extremely high, which discourages developers and operators from offering these services to their clients,” says Fenollosa. In response, developers have begun using their own department store or loyalty cards as a way to pay for parking. “Developers have no problem offering free parking to users as long as they purchase in their stores,” he explains. “There are many benefits that can be reaped from parking lots and parking meters for both citizens and developers but a balance must be found in the quality of the systems and in the price.”