Scooters Aren’t Big Business for Parking
Dockless scooters have caused chaos in many cities. Just one visit to LA and you’ll notice the scooters strewn all over the city. Blocking sidewalks and spilling into roadways, inconsiderate users just leave the scooters wherever they’d like.
The dockless model also requires contractors to roam the city, picking up scooters for repositioning — and charging. It’s a complex model that seems to have just as many opponents as proponents.
As an alternative to dockless, scooter companies are considering renting space from parking operators to station scooter pick-up and drop-off points. It’s good business for them: centrally-located scooter parking is a key component of providing the best experience for customers.
At face value, this could also be a good business for the parking industry: you can fit more scooters in a single parking spot, which could result in some predictable income from otherwise variable demand.
Yet, all is not what it seems; scooters aren’t good business for parking.
Location. Location. Location.
First up is the most obvious: location, location, location. Parking adheres to that classic real estate mantra. Your locations must be close to destinations that attract people needing to park.
And so do scooters. Scooter hubs must be located in convenient locations that provide the most direct access to the greatest number of potential customers. A scooter, like a parking spot, is of the most value when it’s nearest to those who want to use it.
So that puts scooters in competition for the most premium locations in areas likely to already be parking constrained. Not only that, but scooters must be on ground floor. No one is going to want to have scooters going up and down ramps or elevators, disrupting customers and causing potential hazards. Yet, those very same spots are often the most lucrative for monthly rentals. Workers at nearby offices want to spend the least amount of time parking their vehicles, and ground floor spots are in high demand. It can be especially costly to give up prime spots to scooters.
Scooters also need to be near entrances and exits, close to sidewalks or other accessible points in a parking lot or garage. This also puts them in competition with handicapped spots, which also require easy accessibility. So, between the value of ground floor for monthly parking and the necessity to preserve access for disabled patrons, there’s a lot competing for these coveted spots. Which makes them more expensive - see next point.
Low Margins and the Ability to Pay.
And there’s no reason to believe the scooter companies would be able to pay for these premium spots. Or even that they would be able to pay much at all, given the low-margin economics of the scooter business.
Most of these companies are only making cents on the dollar, which doesn’t leave much room for paying parking operators enough to justify the hassle of adding an additional mode of transportation to the daily rhythms of a parking lot or garage.
Case in point: we were approached by a large scooter company here in New Orleans. The company was having issues getting dockless approved by the city, and wanted to price out what it would cost to put their hubs and drop off zones on our properties.
We priced it out with very little markup on 40-50 locations scattered throughout the city; it was basically the amount of revenue we would have received from parking vehicles in those same spots. We never heard back. Clearly, there’s not much wiggle room for scooter companies to rent space from parking operators - unless they decide to raise prices for riders, which is not a likely outcome in a commodified business like scooter rentals.
While it’s true that scooters don’t take up that much space, they do add complexity to a parking operation.
Even the smallest additional complexity can cost operators money in the form of additional labor. Because, inevitably, if a scooter company’s customers have questions, they’re going to bring them to the first person they see: a parking lot attendant.
Even if there may be some incremental dollars around storing or charging scooters — two major line items for scooter companies — it’s not usually enough to compensate for the additional operational complexity.
It’s Just Not Worth It.
Bottom line: it’s just not worth it for parking operators to pull inventory away from vehicles for scooters.
And it’s not only the top-line revenue.
It’s also the potential liabilities from hosting such high-traffic items within an active parking operation. Lots can go wrong with scooters constantly coming and going (and being used by riders of varying degrees of capabilities)!
All it takes is one bad driver or reckless scooter rider to sideswipe a parked car — or worse, fail to yield to an oncoming car — for all potential profits to go out the window. Even if scooter companies indemnify operators from liability, a costly lawsuit is a very real possibility. Fault or no fault, the lawyers still get paid.
The reality is that scooter parking is just not worth the headaches for the parking industry.