Secrets of the $131 Billion Parking Industry with Jonathon Barkl (Co-founder and CEO of AirGarage)
Nov 8, 2023
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Jonathon Barkl, Co-founder and CEO of Air Garage, discusses the business model of parking, the outdated nature of the $131 billion parking industry, and how Air Garage increases parking lot profitability. He shares the inspiration behind Air Garage and the sales lessons learned. Jonathon also talks about securing funding, dynamic pricing in parking, and the impact of parking on cities.
The traditional model of the parking industry lacks integration and efficiency, resulting in missed opportunities and a poor user experience.
Air Garage helps real estate owners monetize their parking lots by providing technology and services to optimize revenue and improve the user experience.
Parking has a significant impact on cities, and Air Garage aims to optimize parking space to make cities more efficient and sustainable.
Air Garage's data-driven approach and revenue share model can increase parking owners' profitability by 4-5x.
Deal structure and aligning incentives are crucial in maximizing profitability for property owners in the parking industry.
By implementing dynamic pricing, Air Garage increased revenue by 44% in a parking lot, showcasing the importance of pricing strategy.
Deep dives
The Parking Industry's Complex Structure and Inefficiencies
In the parking industry, there is a complex structure involving asset owners, property managers, and parking management companies. The traditional model involves buying different systems from different vendors, leading to a lack of integration and inefficiencies. Operators often make more money from ticketing and towing rather than parking itself. This asymmetric relationship between owners and operators can result in missed opportunities and a poor user experience.
Air Garage's Approach to Parking Management
Air Garage is a full-stack parking management company that helps real estate owners monetize their parking lots. They provide the technology and services to transform a parking space into a fully operational and income-generating asset. By optimizing technology, streamlining payment collection, and improving the user experience, Air Garage can significantly increase revenue for owners. Their approach focuses on data-driven dynamic pricing, personalized customer interactions, and efficient operations.
The Impact of Parking on Cities and Real Estate
Parking has a significant impact on the design and operation of cities. In the United States, approximately 30% of the surface area in urban areas is dedicated to parking. This excessive amount of parking leads to inefficient land use, increased driving, and a lack of walkability. Air Garage aims to optimize the use of parking space, ensuring that it's not overbuilt and that it serves the needs of businesses and visitors. By rethinking parking and utilizing data-driven strategies, Air Garage can help cities become more efficient and sustainable.
Air Garage's Value Proposition and Revenue Enhancement
Air Garage offers real estate owners an opportunity to significantly increase their parking revenue. Through their integrated technology and data-driven approach, they optimize pricing, simplify operations, and improve the overall parking experience. Traditional operators often lack transparency and financial insights, leading to missed revenue opportunities. Air Garage's revenue share model ensures that owners receive a fair share of the parking revenue, resulting in a potential 4x or 5x increase in profitability for their parking assets.
Transforming parking lot deals for property owners
Air Garage presented a proposal to reduce a property owner's lease cost and increase their revenue by implementing a revenue share model and dynamic pricing. This showcases the importance of deal structure and aligning incentives to maximize profitability for property owners.
Optimizing revenue through dynamic pricing
Air Garage successfully increased revenue by 44% in a parking lot by implementing dynamic pricing. They discovered the pricing scheme was undercharging, and by adjusting the prices based on demand, they were able to significantly improve profitability.
Introducing the Space Force for efficient parking enforcement
Air Garage developed a workforce known as the Space Force, which consists of gig workers who scan license plates and issue tickets for parking violations. This scalable approach allows for enforcement across the country and aligns incentives with the workers' pay per scan, ensuring effective enforcement and increased revenue.
Streamlining the payment process for a frictionless experience
Air Garage simplifies the payment process for drivers by allowing them to pay through their phone. With clear signage and straightforward payment options, drivers can easily start and end their parking rental, resulting in a frictionless and convenient experience.
The Value of Quick and Efficient Business Development
The founders of Air Garage shared their experience of building the company, highlighting the speed at which they were able to secure deals and launch their product. They signed a contract with a church in Tempe and within a week, they were operating and managing its parking lot. This quick turnaround demonstrated their ability to seize opportunities and execute rapidly. Additionally, they discussed the importance of navigating business decisions and recognizing the right opportunities at the right time.
The Impact of COVID-19 on Air Garage and Its Journey to Recovery
The podcast episode explored how COVID-19 significantly impacted Air Garage's revenue, causing a 90% drop. However, it also proved to be an opportunity for the company to pivot and find new avenues for growth. By targeting owners of underutilized parking lots and garages whose leases were not being honored by larger parking companies, Air Garage was able to quickly secure new partnerships and expand its business. This shift in strategy led to a 12x year-over-year growth and a successful series A fundraising round.
The Long-Term Vision of Air Garage's Disruptive Impact
Air Garage envisions a future where the use of real estate, particularly parking lots and garages, can be optimized and more effectively managed. By providing a digital system of record and leveraging data-driven insights, Air Garage aims to facilitate on-demand allocation of parking spaces for various use cases. This includes enabling businesses, farmers markets, food truck parks, and rental car fleets to easily access and optimize real estate for their specific needs, ultimately disrupting the way cities function and creating value for real estate owners, consumers, and the broader community.
The Importance of Branding and Positive Customer Experiences
Air Garage places a strong emphasis on branding and creating positive customer experiences in an industry where customer satisfaction is often lacking. By standing out with their orange branding and adopting a user-friendly approach, Air Garage aims to create delightful experiences for drivers who park in their lots. This customer-centric approach has driven loyalty and repeat business while differentiating Air Garage from competitors in the parking industry. By focusing on building a strong brand and positive customer perception, Air Garage aims to create long-term value for both customers and real estate owners.
Jonathon Barkl is the Co-founder and CEO of AirGarage, a full-stack parking management company that helps real estate owners increase their income.
Jonathon and his co-founders Chelsea and Scott started the company in 2017. They’ve since raised roughly $15 million from investors including Founders Fund, Floodgate, a16z, Abstract, and prior guest of the show Ryan Delk.
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