Almost getting sued for running a startup and innovative solutions from a parking technology company
Frank Jing, Product & Sales at GoParkr
We all know how marketplace startups can often land in grey areas when it comes to legality. This is a highly debated topic since many believe that the time the startup uses to work out all the legality issues with their business is unnecessary, especially at the beginning. Therefore, many startups follow the build a plane while it falls mentality.
The Uber for X and Airbnb for Y fad have also occurred other adjacent industries, with startups that attempt to execute Airbnb's exact model for private jets to parking spots. GoParkr started with the same concept: Airbnb for parking. The platform currently has parking spaces in downtown Toronto and North York. Individual homeowners and commercial real estate owners such as general contractors, restaurants, churches, and developers have listed over a hundred parking spaces across both cities. The parking marketplace started to help drivers find affordable parking closer to their destinations such as office, school, or homes, and owners easily rent out their extra parking spots on their own schedule whether 24/7 or Monday to Friday 9 am to 6 pm. GoParkr is quickly growing as a parking rental marketplace in Toronto.
Parking on the surface seems relatively straight forward; however, the legality of renting out a parking spot using a platform to the public involves multiple stakeholders: the city, homeowner, and if the parking spot is inside a condo - property management and the owner based condo board. The complexity furthers when taken into account operations, pricing, security, and enforcement.
With the increase in parking transactions and traction, GoParkr also received unwanted attention, especially in the condo segment. A week ago, our office got a call from the property manager of a Toronto high-end condominium in the waterfront area. The property manager accused GoParkr of facilitating the rental of resident-only parking spaces to the public, an act which is against the condo rules. The property manager then proceeded to threaten to pursue immediate legal action if we do not remove all of the parking spaces listed at their location.
Despite the fact that we have written agreement which clearly asks all parking owners who list with GoParkr to comply with local laws, regulations, and most importantly the property management or condo board. The parking space owners specified in the parking spot description that the space is for building resident only. The property manager was still convinced that GoParkr is the cause of the issue. In addition, parking owners have the ability to approve or decline parking requests at a touch of a button. The property manager still insisted that we remove all of the spots immediately, in which we promptly complied. As a marketplace, it is virtually impossible to stop people from listing on GoParkr other than to specify that they should consult with the building property management first and fully comply with the local condo rules. .
Airbnb ran into similar issues where the condo is rented out without the consent of the landlord or condo board. Platforms such as Airbnb can help reduce the occurrence of non-compliant listings by educating the owners on the legality of the sharing economy, but this does not solve the underlying problem at its core. On the flip side, if Airbnb had tried to figure out all the legal aspects of short term rental in a residential setting back in summer of 2007, then Brian, Joe, and Nathan would have never launched Airbnb.
In reality, the reason the property manager is against the idea of allowing residents to rent out the otherwise unused parking to the public is due to security and the perceived excessive parking operations or management effort required. The security concern is a valid one; however, drivers can be vetted and insured. Additional security measure can be made. More importantly, an intra-marketplace model in which residents and their guests can reserve tenant parking on an hourly or monthly basis can solve the overwhelmed visitor parking that most condos face on a daily basis.
During the construction of highrise towers, parking is estimated to account for upwards of 30% of the capital expenditure of the project. Therefore by allowing residents to share parking with other residents and visiting guests could reduce the number of visitor parking and tenant parking required which leads to a reduction in initial construction capital requirement. Furthermore, the security concern of the property manager is eliminated since the parking is not shared with the public. All parking transactions are updated in real-time and shared with the property manager. This means the property manager would be able to know exactly who is parking at which specific spot, when did they park or leave, as well as license plates and associated condo unit numbers. Since this entire process is fully automated, the property manager can save hundreds of hours per year dealing with tenant or visitor parking and have more time to focus on their bore business - property management.
In the future when property managers and asset managers are better educated on how technology can help them save time and headache on parking, we hope they will work alongside us instead of trying to sue the very people who are working on innovations that could benefit them. Change is hard, but when it is for the good, open-mindedness can go a long way.
Please share this article with your friends or colleagues.
Author: Frank Jing, Product & Sales at GoParkr