Posted in: Uncategorized

Valet Parking Startups and Non-Consumption as the Real Competition

In the past few months I’ve met, read about, or been introduced to a number of companies that are working on solutions to make parking in cities a much easier experience for consumers. Most of these services are focusing on the SF and NYC markets, both of which are know for limited street parking, high prices for garages and lots, and a propensity for the local authorities to write parking tickets. Some of the more interesting companies in this space include Zirx, SpotHero, ValetAnywhere, Caarbon, Luxe, and others. I think they are all working on an interesting problem and I wanted to share my thoughts on the space.

I posted the tweet below and got a lot of good feedback from some of my followers:

One of my favorite replies came from Josh at Freestyle and I wanted to give him credit:

Having met with a few companies in this space and having thought about the problem, I get why these companies are attacking this problem. If you drive, parking is a pain in many cases. Making parking less painful is a noble goal. And I think the growth of on-demand services like Lyft, Uber, Postmates and others has changed how consumers think about both transportation and logistics. After thinking about this problem for a bit, I believe the following to be true:

The real competition for these valet services is not really existing valet and parking options. I think it’s really a potential secular move away from driving and parking as the primary way people move about in cities. Increased urbanization plus innovation across the transportation stack (ridesharing group transportation alternatives, and public transportation extenstions) are putting pressure on driving.

With that context, I wanted to explore a few other ideas I have around the valet parking space:

Waiting for a Ride vs. Waiting for a Valet

The basic service parallel between valet parking and ridesharing services such as Uber and Lyft is obvious. All are on-demand services around transportation. Having tried out some of the valet parking services, I was struck by the differences between waiting for a ride and waiting for a valet. Waiting for a ride to show up is easy. I can usually find a way to entertain myself while I wait for my Uber or Lyft to show up. Waiting for a valet to show up to take my car is different. I’m behind the wheel. And in many cases I’m getting a valet because I don’t know where to park and I have somewhere I need to be. I found myself feeling more impatient, rightly or wrongly, when waiting for someone to come grab my car than I did waiting for a ride to show up.

Logistical Complexity of Moving Valets and Cars

One of the more interesting things is the logistical challenge that these models create. In the case of ridesharing, you have a stationary passenger and the target vehicle moves to wherever said passenger is. The passenger and driver then move together to the route endpoint and then separate. There is no need for the same car that dropped me off at my endpoint to be the same car that picks me up on the next leg of my journey. For these valet services, there are humans in the loop. There needs to be a model for moving valets from dropoffs and pickups as consumers request

The opportunity for good and bad “Surge Parking”

If you’ve ever looked for parking when there is a sporting event, concert, or other large mass of people in one place, it’s not uncommon to see parking prices increase drastically. As a consumer, I have two choices in these scenarios. I can park my car farther away from the venue for a cheaper rate and walk or I can pay a premium to have my vehicle as close to the venue as possible. But why does this linkage need to exist? I do think there’s an opportunity for these services to give consumer-friendly surge pricing that will be cheaper than those lots near major venues because the cars can be stored a ways away and returned when the event is over. On the flipside, I can imagine that these services will have some issues with surge pricing if everyone wants his or her car on Friday afternoon at 5 PM and the supply of valets is limited.

Why Non-Consumption is the Real Competition

I think the most existential threat to these valet parking services is the reduction of intra-city car commuting. I’ve been trying to think of a way to organize my thoughts around how I get around San Francisco. In thinking about it, I basically have two dimensions I consider when I’m getting ready to take a trip:


This model doesn’t take into account other important considerations, such as the total distance to cover, the time of day, where I am heading next, and whether I need a vehicle to carry stuff or store stuff. However, this is my starting point. If I have time to plan my trip to a known location, I have the luxury of weighing cost and convenience. When coming to the office, I can drive, take Uber, use MUNI or BART, or walk. If I had a job that required me to drive into town most days, I think I’d probably just reserve a garage near the office – it would lead to a predictable, guaranteed spot close to the office every day. Or I might also just find an alternative way to get to work that didn’t require me to own a car.

The one area where I do think the valet services have a real opportunity is the case where I am making an unplanned trip that is going to happen by car and where there is some risk that I won’t find parking easily. That could be due to the fact that I don’t know the parking situation in the destination very well or because I know it well and know that it’s hard to find parking in that part of town.

With all of the new transportation options available in cities these days, the number of instances where I have to drive to get from point A to point B or where I choose to drive continues to decline. And I wonder what that means for these services as they grow.

As always, thanks for reading. Feel free to leave a comment below or share your thoughts on Twitter @chudson.

Comments (8) on "Valet Parking Startups and Non-Consumption as the Real Competition"

  1. I haven’t driven since I moved to SF. I originally joined Zipcar, but when I didn’t use it at all in 2 years, I cancelled. It’s more convenient to just take MUNI or an Uber.

  2. First world problems indeed. Wouldn’t an app that told you where the nearest/best/cheapest parking spot be almost as useful, and need 1/10th of the logistics and investment?

  3. I’ve been thinking about this as regards to my own startup – a walking/running app – and what kind of cultural shifts could threaten it. When people don’t have to go to the grocery store themselves, can move a mile by Uber for $5 conveniently and can task rabbit anything else, the trends pushing towards even more sedentary lives begin to lurk.

    So I’m glad to hear some think that “non-consumption” is threatening car-based businesses… makes for more walkers. 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top