3 Operational Strategies to Consider When Choosing a Parking Operator

New technologies are constantly emerging to better process parking transactions and provide real-time availability. The true success of any parking facility must still follow some very basic operating principles. Real-time vehicle movements, revenue transactions, and data management are all great operational resources for owners, but if industry best practices are not in place, annual facility success and customer satisfaction will be marginal at best.

Parking operators compete in an RFP tender process for the opportunity to manage or lease a facility. A well structured and detailed RFP document assists in comparing key operational targets and site requirements, but operator proposals vary greatly between projected revenues, suggested parking equipment and operating expenses. Parking operators should outline their merits, corporate strengths, and achievements in a proposal. Below, three operational strategies that should be considered before deciding on a parking operator.

Monthly Parker Audits

How will the parking operator monitor access cards/transponders for the facility? How often does monitoring occur? Have parking operators provide a comprehensive monthly revenue report to ownership, that includes an “audit” of monthly parker access cards/transponders.

By comparing the list of paid parkers from the parking operator’s billing system vs. the parking equipment’s active parkers list, the parking operator can be held accountable if monthly parking payments go uncollected.

Fees and Expenses

Management agreements should clearly define the payment of expenses for both the parking operator and property owner. Expenses that are to be reimbursed by the client to the operator should be limited to site-specific operating expenses only. Ensure that a detailed breakdown or invoice for each product or service is included in a monthly revenue report. Charges include such items as credit card fees, site supervision, supplies or parking enforcement.

Although these expenses are shared amongst a parking operator’s whole portfolio, many products or services are billed in full for each specific site and not on a shared ratio. For example, many sites are billed for 30hrs of parking enforcement per month, but does an enforcement officer really show up for an hour every day? If 30 hours of enforcement are being billed at twenty different sites, it would be physically impossible for an enforcement officer to visit that many sites per day. Ask the parking operator to provide a detailed enforcement schedule to verify how often sites will be enforced.

Other fees, such as credit card processing rates, are very low for operators (1.7%-2%) but are always marked up to clients by as much as an additional 5%. Some facilities process more than $1M/year in credit card transactions so it’s easy to imagine what a 5% mark up in credit card fees could mean to a facility’s bottom line. Always negotiate the facility’s credit card processing fees/rates.

Realistic Revenue Projections

When reviewing RFP revenue projections, ask the parking operators exactly how they plan to generate and sustain their proposed revenues. Does the proposal contain any new business initiatives or marketing campaigns? Sometimes, operators submit “shot in the dark” revenue projections in hopes of winning the contract by providing the highest revenue bid.  Ensure it is not just some made-up numbers in an Excel sheet.

Gaining visibility into your sites also makes them accountable

It is also important to issue an RFP Tender for parking operations every three years. It may seem unnecessary given the relationship with the current parking operator, but it is the only process that ensures the highest revenue yield for the parking facility while providing the best level of customer service. Industry competitors must adapt to their client’s needs and expectations or simply get eliminated from the selection process. If an incumbent parking operator is truly the right choice, then an RFP tender process only highlights and reaffirms their strengths and achievements and supports your decision in the long run.


When done, here is content other readers find helpful:

Refer to the Automotive and Parking category for checklists, how-tos and best practices for the automotive and parking industries.


About the author:
Ross Frangos is the President and Founder of AuditPark Services Inc., a parking consulting firm based in Toronto ON. He specializes in Requests for Proposal, parking documents and assisting his clients in the procurement of parking management services.

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