Thinking Differently

If your program was like most before the pandemic, outside of providing daily transient parking, you may not have been able to offer parking products that would address the current desires of a hybrid worker. There was no need to consider such products, or your budget might not have provided sufficient funding to offer another low-cost product. However, now your customers are making their needs clear. They want a parking product that allows them to pay less for parking since they come to the workplace less often.

Challenges

It seems logical, really. Why should they pay for a permit that provides daily access when they do not need it? Unfortunately, a solution may not be as simple as it may appear on the surface. There can be numerous hurdles to providing a parking product that specifically addresses the demands of a hybrid worker, including (but not limited to):

• Budgetary constraints. In most situations, a semester or annual parking permit is less expensive than the cost of daily transient parking (when calculated daily). There is, in effect, a discount when a customer commits to purchasing more parking. However, many parking customers would not be willing to simply pay the daily rate. Instead, they want to pay the lower average daily rate a permit would provide. If a high percentage of employees work a hybrid schedule, this could mean significantly less revenue and make covering your expenses almost impossible, with no guarantee that you will find enough new customers to offset the losses.
• Price equity and the market. This concern can vary from location to location. If your operation is situated in a competitive market, and/or you have already developed parking products and prices that depend on the level of commitment the customer makes, determining the appropriate price of a hybrid parking product could prove challenging. Either the price reduction for the product is not sufficient to meet customer desires or help increase sales, or the product is priced too low and leads to several undesirable outcomes (e.g., significantly less revenue, cannibalization of other parking products, significantly under-market pricing, or an increased distortion of transportation choices).
• Debt or credit rating concerns. If you have debt, generating less revenue will likely be frowned upon by your bank, noteholders, and/or credit rating agency. Less revenue could mean lower debt service coverage ratios, challenges meeting other debt covenants, lower credit ratings, tough questions from your noteholders, and potentially default on one or more loan terms.
• Equipment and/or enforcement limitations. Perhaps you have found a way to resolve any financial concerns. Your next challenge is finding a way to properly enforce any parking limitations that may come with a hybrid parking product. For example, you may offer a parking permit up to three days per week. How will you ensure that a person only parks three days per week? Will you take their word for it? Maybe you have installed parking access and revenue control equipment or utilize mobile license plate recognition. Can your system provide the flexibility necessary to control and enforce new parking products adequately? If they cannot, you may lose more revenue than you think.
• Impacts on transportation goals. Like many parking operations, you may be working hard to reduce the number of vehicles parking daily. You may be using some combination of pricing, limited supplies, commuter programs, transportation subsidies, and transportation infrastructure investments to discourage single-occupancy vehicles. Providing a below-market parking product (or yet another below-market product) would likely directly conflict with your transportation planning goals. You may have more people driving, increased traffic, additional emissions, reduced pedestrian and bicycle safety, and reduced transit use.

At the end of the day, meeting the parking demands of the hybrid worker is likely to prove challenging for your operation. The understandable request of hybrid workers for a more flexible parking option can quickly morph into the demand for a heavily discounted parking product that negatively impacts your ability to meet expenses, puts your debt and credit rating at risk, and is counterproductive to your transportation goals. It is unlikely your customers will care about the market you are in or what your goals are—they are laser-focused on their needs.

Solutions

What can we do to offset all the challenges and provide appropriate parking services for our employees and customers?

Well, if anyone knows and lives in the university setting, you know most changes come slowly. However, the entire world, including colleges and universities, moved rapidly when the pandemic hit. How do we change on a dime again and develop a new rapport with our hybrid workforce? It starts with gathering data and talking with stakeholders.

• Know your hybrid personnel. Who are they, how often are they on campus, and which are expected to be peak days?
  
  

• Know what your budget can handle. Are there other sources of funding, or must you be self-sufficient?
  
  

  

• Research what your equipment and software can do. If you have ideas about rates, permitting structure, and dynamic pricing, understand if implementation will require additional expenditures.
  
  

• Consult with your parking peers across the industry. There is no need to reinvent the wheel here. Others have surely considered these issues as well.
  
  

  

• Talk with your customers and senior leadership about their expectations. This will give insight into how (and whether) things can be changed.

With all the modern technology available, one may think adjusting would be easy. Unfortunately, for those without enhanced technology, it is a major undertaking. While changing parking to a more hybrid environment in a university setting may be great for the employees, the management team must create additional revenue streams that may be unavailable if they are tied to a captive audience.

Here are just a few ideas discussed as to how to accommodate your campus’s hybrid workforce parking without large financial losses:

• Rate adjustments. Whether anyone likes it or not, rates may have to be adjusted to not further risk financial hardship. While the hybrid community is not necessarily paying for parking when they are working from home, rates, when they are at the workplace, may need to be adjusted in tiers, with the larger discounts being applied for those on campus and smaller discounts for those on campus less.
• Create flexible passes. This ability to provide flexible passes goes hand in hand with your current parking technology and the rate adjustments mentioned above.
• Reduction of staff. It is never easy but reducing staff and providing a centralized operation office with video and intercom capabilities at each lane and/or parking lot can reduce expenses.
• Increase outside business/community use. This works only if you don’t have a captive audience. In this scenario, you may be able to increase your transient or monthly numbers daily, knowing when your hybrid personnel will be present.
• Add EV chargers. With the ongoing push to go to electric vehicles, if you are ahead of the game and have available EV chargers in place, this can help drive additional parking.
• Reduce facility hours. Set hours to accommodate the majority, not the few one-off individuals. Ensure the information is clear to parkers and those who work longer hours; offer them other close parking with extended hours.
• Push for public transportation/bicycles. While this will likely further reduce traffic and revenues, it may allow for better overall strategic planning and possible repurposing of the no longer needed parking facilities.
• Reassess the long-term vision. One potentially happy result of hybrid work is a long-term reduction in parking demand per employee/student. Current development plans will likely require less new parking, and over time, you can backfill empty spaces in existing facilities as the campus grows.
• Celebrate the win. If you have a hybrid workforce, you probably have fewer vehicle miles traveled and less pollution and congestion, which likely helps your sustainability goals.

All indications are that flexible working arrangements and hybrid employees will be a major part of the workforce in the foreseeable future. As we all continue to work to balance our books and keep our employees and customers happy, remember that the one real constant we have is change. It is our responsibility as parking professionals to adjust and adapt to whatever is thrown our way. ◆