Parking Demand Trends: The Impact of Transportation Network Cos.

By Adina Marcut

Mary Smith

Ride-sharing services such as Uber and Lyft are disrupting the status quo by offering cheaper, more flexible transportation, changing the way we get around. On one hand, these companies present challenges to traditional county revenue streams, while on the other hand, they provide new opportunities to improve county planning, mobility and service models. Walker Consultants’ Vice President of Parking Consulting Mary Smith spoke with Commercial Property Executive about how Transportation Network Companies (TNCs) are affecting parking demand and how that impact could play out in the next few years.

Where do you currently have projects under development?

Smith: Personally, I am working on projects in Doha, Cairo, Dubai as well as in Atlanta, Los Angeles and New Jersey.

Do you think TNCs are a positive or a negative? Why?

Smith: There are many positives, including providing additional mobility options, and for urban dwellers, supporting a car-free lifestyle. Someone can use transit for most trips and TNCs when transit doesn’t work well. However, studies are finding TNCs are negatively impacting transit, walking, biking and car sharing, proportionately more than driving and parking. A study by UC Davis found that roughly half of the trips by TNCs would have been made otherwise by transit, walking or biking or not going at all. They found that TNC use reduces bus ridership by 6 percent and light-rail usage by 3 percent, but increases heavy rail transit by 3 percent. Other studies have similar findings. So there are legitimate concerns about TNCs’ impact on traffic and congestion, transit etc.

Which businesses are impacted the most by TNCs and how are they affected?

Smith: Aside from parking, the biggest issue for TNC rides right now is the impact of passenger loading. Airports are finding increased congestion at the curb and are moving pickup for TNCs inside parking facilities. Sports and event facilities are dealing with problems staging vehicles for pickup after events, with the volumes still growing rapidly year over year.

How do TNCs impact cities?

Smith: Cities are beginning to have to turn on-street parking to passenger loading zones. Over time, they will lose parking revenue if TNC use outpaces parking development growth.

How are ride-sharing services impacting parking demand?

Smith: From a parking perspective, airport parking transactions per enplanement are down by 5-20 percent with parking by business travelers appearing to be most impacted. It depends upon the parking rates and convenience of parking at the specific airport. Moreover, the impact is even greater on taxis and rental cars at airports and the fees that airports receive from those transactions. In turn, hotels are seeing up to a 70 percent decline in parking by business travelers, although there is much less impact on leisure traveler parking, as well as banquet and local event parking. Restaurants and bars, particularly those with valet parking, are seeing up to an 80 percent reduction in parking, apparently due to concerns both for convenience and cost of parking, and to avoid drinking and driving. Sports and events facilities are seeing a 3-6 percent reduction in parking from a few years ago.

How will driverless cars impact parking demand?

Smith: While many in the planning community project as much as a 90 percent reduction in parking demand in the U.S. within a decade or so due to autonomous vehicles (AVs), we believe it will be slower and much less impactful. We simply don’t believe that 90 percent of Americans can or will give up cars and use driverless cars instead, particularly shared-ride providers like UberPool and Lyft Line, which are necessary to get to the 90 percent figure cited in most articles.

How will parking demand change in the next years?

Smith: About one-third of Americans live in areas with a population less than 200,000 people, where shared TNC rides are unlikely to be nearly as cost-effective and convenience and comfort will play a bigger role. Further, we have 260 million non-automated vehicle (AV) cars on the road today, and millions more that will be sold in the next decade (before AVs are available to consumers). We think there will be a maximum reduction in parking demand across the U.S. of about 40 percent, and that the full impact won’t be achieved until at least 2050. Where a parking facility serves activities that grow with population, like airports, downtowns and universities, the parking demand will continue to rise through about 2030 and then come back down to the demand today around 2050. Certainly, the impact will be much higher than a 40 percent reduction in the urban core areas, but it will be lower in suburbs and much lower in rural areas and smaller cities and towns.

How do you think self-driving vehicles will impact parking planning?

Smith: In addition to the reduction of parking due to driverless TNC rides, “autonomous parking” by privately owned AVs, will allow passengers to be dropped at the door and then the car will go and park itself, perhaps at a lower cost parking facility a few blocks away. Wherever they park, they can park closer together, because car doors don’t need to be opened at the parking stall. As a result, the capacity of parking facilities may go up at the same time parking demand goes down. We need to plan for significantly increased passenger loading zones in the future for most parking structures designed today.

There is significant potential for the seas of asphalt surrounding most suburban developments to be redeveloped with office, residential, hotels, restaurants and even retail that would share with existing parking recourses.

Can you name a few metros that are experiencing parking issues?

Smith: We are hearing the above referenced reductions to hotels, airports, bars/restaurants are pretty consistent in major metro areas across the US. Las Vegas is having enough problems with TNC loading that they are starting to turn on-street parking into loading zones.

What are the future plans regarding parking demand?

Smith: The impacts on parking in downtowns, universities and others land uses that have multiple parking facilities, will be absorbed by the market over time; surface lots in prime locations will be developed with little or no new parking, and older deteriorated garages will be torn down and redeveloped as well. While many talk about designing new parking facilities to be completely converted to other uses in the future, we haven’t found a single client willing to pay any significant premium to do much more than provide more floor-to-floor height now.

And if you don’t take other design steps now, like strengthening the structure for the heavier loads of office, retail and apartment uses and/or providing a façade that is easily converted, it will cost much more to convert in the future, while you will end up with a space that is probably significantly compromised compared to what the future market wants and needs.

Image courtesy of Walker Consultants