Mobile phone technology has come on leaps and bounds in the last decade. Along with making calls and sending texts, they can now be used to pay for parking. So how has pay-by-phone established itself in the UK?
Aparking ticket stuck on the car windscreen can spoil anyone’s day. Pay and display forces shoppers to stop their spending and rush back to the car park, or else face a hefty fine upwards of £40. But this could all change with the rapid uptake of pay-by-phone parking across the UK.
Verrus UK and RingGo are two major companies rolling out pay-by-phone parking in Britain. Verrus, an American company that expanded into the UK in late 2004, is currently live with 17 local authorities and seven private operators, including NCP. And RingGo has expanded out from the south west, moving from 17 to 35 local providers across Britain in the last year.
Angela Tyreman, sales and marketing manager at Verrus UK, is confident about the ongoing success of mobile phone payments. “Pay-by-phone has now come of age and typically we can expect around 10 per cent of users per annum to switch from coins to pay by mobile,” she says, adding that this figure is likely to increase as the concept becomes more widely known.
The benefits of pay-by-phone seem to extend across both operators and users. Shoppers don’t have to carry change as they pay for parking over the phone via credit or debit card, and they can receive text message reminders warning that their time is due to run out (at a cost of 10p per text).
And, crucially for shopping centres and retailers, users can top up their parking remotely without having to return to the car park. So people can take their time in the shops, go out for lunch, or go to the cinema – all of which boosts the local economy.
Newcastle City Council has introduced Verrus in five city centre car parks for its ‘Park and Pay by Phone’ scheme. People phone the number displayed on signage, and when new to the system, they enter their card details and registration number. The system recognises any registered phone so from then on shoppers only need to provide their location number and duration of stay.
In Newcastle, two of the car parks using Verrus are attached to shopping centres at Eldon Square and Eldon Garden. The system is offered along with traditional pay and display parking, but many shoppers are switching to pay-by-phone with more than 1,000 transactions a month at Eldon Square. Neil Cuthbert, head of parking services, is pleased with the growing success of the scheme. “Since it has been implemented, we have seen the numbers of users and transactions steadily grow as customers have embraced this additional method of payment,” he says.
And shoppers can avoid the hassle and expense of receiving a parking fine, which is especially appealing during times of recession. The benefits of pay-by-phone generally work to give people a more relaxed day out and as such many customers are keen to use the system.
A recent customer survey conducted by Verrus showed that 96 per cent of users in the Eldon Square and Eldon Garden car parks found the system easy to use, and Newcastle City Council believes this is a major cause of its speedy uptake. Another reason for the rapid growth of pay-by-phone, according to Anne Snelson, marketing manager at RingGo, is the recession.
“Parking departments and operators have been squeezed like everyone else, so many have had to put projects on hold or cut their budgets. This includes projects like upgrading or replacing payment machines to take credit or debit cards, which involves a considerable expense. The alternative is to roll out RingGo, which offers the same solution but at a much lower cost,” explains Snelson.
It seems that pay-by-phone makes life easier for operators in other ways too. There is no need for barriers or tickets because pay-by-phone is enforced via a GPRS-enabled device which can read the registration number of every vehicle that has paid in a given area.
And Newcastle City Council found that maintenance on pay and display machines and collection costs have both been reduced. Tyreman points out that the system is also effectively free to install. “The only additional costs are merchant charges for the use of credit and debit cards,” she says.
“We are aiming towards pay-by-phone becoming the main way to pay for parking by card. Pay and display requires more equipment, with ticketing costs, maintenance of machinery and staffing, so phone payments will be the most economical way for operators to go,” adds Tyreman.
Of course, there are marketing and launch costs associated with pay-by phone. Handheld devices are needed to read the vehicle registrations of cars using GPRS, and parking enforcement officers devices. Customer support facilities, onsite information signage and legal orders are all necessities, while operators may also choose to stage a trial or produce marketing material.
However, pay-on-foot – the common payment method in private shopping centre car parks – is seen as expensive to install and run. Shoppers collect a ticket from the barrier on the way in, pay at a machine using the ticket when they return to the car park, and insert it into the exit barrier to leave. With all this machinery at various exits, not to mention maintenance and staffing, it’s no surprise that the costs add up.
So why is this method so popular with shopping centres? “Councils have the money to enforce parking methods like pay and display or pay-by-phone. But private shopping centres can’t afford regular patrols and don’t have the power that local authorities have to collect the money once a fine has been issued,” Tyreman explains.
Despite the fact that costs are significantly higher, private shopping centres car parks are sticking with pay-on-foot to avoid the issue of enforcement. Car parks run by larger operators or local authorities are still far more likely to adopt pay-by-phone methods.
But Tyreman is looking to the future. “If this little hurdle can be overcome, for example by hiring a private contractor to enforce pay-by-phone, then shopping centres will discover just how cost-effective paying by mobile can be.”
And in some cases, the issue of enforcement is outweighed by other benefits. Army & Navy, a mixed-use scheme on the edge of Chelmsford town centre, installed pay-by-phone in its privately-run car park. Shoppers and hotel guests both make use of the car park, as the scheme houses a Travelodge alongside retail units.
According to Snelson, Army & Navy implemented RingGo’s system because it allows more distinction between long-stay and short-stay parkers. Travelodge reserves 20 spaces in the car park and offers guests discounted rates to park in these spots. But shoppers, who only will only stay for a few hours, have to pay full rates. RingGo allows the hotel guests to enter a code when they pay for parking, which gives them the discount.
“There’s a joint benefit to the shops and the hotel, because their customers can use the car park together without any hassle. Hotel guests can get their discount easily and they can park anywhere they like within the car park once they have paid over the phone,” says Snelson.
National car park operator Britannia Parking runs RingGo’s phone payment system in several locations, including Travelodge car parks. Britannia is not currently operating pay-by-phone in shoppers’ car parks because it found that the system works best for long-stay parking, where people are less likely to pay by cash.
Brian Parker, regional manager for Britannia, says: “The biggest benefit is at hotels and train stations; anywhere that involves a long-term stay. We found that drivers who want to park overnight for two or three days make the most use out of paying by mobile phone. Having rolled out RingGo across all car parks that we operate on behalf of Travelodge, long-stay parking definitely seems to work best.”
There is also the matter of cost to the shopper. Pay-by-phone companies put a service charge of 10p or 20p on top of the parking fee. Although the charge is only small, it could deter customers from using the system if they are only parking for a short while.
As Snelson explains, “RingGo works best in sites where motorists park regularly and ticket prices are either relatively high (over £1) or require lots of coinage – for example an 85p payment requires a minimum of four coins.
“Higher prices per hour reduce the relative significance of the 20p convenience charge, but most customers recognise the benefits of paying by phone and by credit card so don’t mind paying a little extra. We have several sites which charge relatively low hourly rates which are successful.”
And shoppers are likely to park longer than an hour if they stop for lunch or want to spend time browsing. Analysis of Eldon Square and Eldon Garden, which typically see short to medium length stays, showed that shoppers using the pay-by-phone system were parking for around three hours.
While operators can benefit from introducing pay-by-phone alongside pay and display, this is not necessarily the case with private operators who run barrier car parks. Pay and display tends to limit users to cash payments, so pay-by-phone works as a good alternative as it allows people to pay by a different method.
However, pay-on-foot offers both cash and card payment through the pay stations, so Tyreman and Snelson concede that integrating pay-by-phone in these locations is not as strong an argument.
But there are some cases of operators integrating the two. Earlier this year, West Berkshire Council added pay-by-phone to five car parks in Newbury which already ran pay-on-foot systems. Councillor Emma Webster at Transport for West Berkshire says that offering both payment methods makes parking easier and more attractive, thereby enticing more people to the area.
“We want to offer the motorist as much choice as possible in the ways that they can pay to park,” says Cllr Webster.
“The introduction of the flexible Verrus service across all of our car parks including the pay on foot locations gives the motorist another choice in how they can pay and will hopefully make parking in West Berkshire easier and more attractive in the current financial climate.”
