City Hall moves toward privatizing parking-meter operations, but says it won’t be like Chicago

A parking meter in transition. (ekonon via ekonon)
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On Monday, the Bloomberg administration asked private companies interested in operating New York City's expansive parking meter system, the largest in the country, to send in their qualifications. 

All responses are due at the end of July, and it is on the basis of these responses that the city will decide whether to outsource the system. (The request is viewable here.)

Chicago embarked on a similar path in 2008, with mixed results.

That year, Chicago mayor Richard M. Daley handed over control of the city's parking meters to a Morgan Stanley-backed company called Chicago Parking Meters for 75 years, in exchange for an upfront lump sum of nearly $1.2 billion.

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The following year, parking rates increased fourfold. The company has sought compensation from the city for taking parking spaces out of service for parades.

The Bloomberg administration wants to make clear that New York City's outsourcing of its parking meter management would not be like that.

"The basic structure is totally different—Chicago sold the system for a one-time cash infusion," said mayoral spokeswoman Julie Wood, in an email. "We are looking for a private operator but we would still own the meters."

New York City has about 89,500 parking spaces, the vast majority which are for on-street parking. Most use muni-meters. The rest rely on old-fashioned single-space meters, but the city expects to phase those out by the end of the year.

In contrast to Chicago's outsourcing adventures, the city would retain control over meter rates, the installation and removal of meters, meter operating hours and enforcement.

In order to qualify, companies will need experience managing at least 100,000 spaces, with at least 20,000 of those spaces on the street.

“In contrast to certain precedent U.S. parking transactions, the City’s objective is not to structure an upfront payment," reads the request (emphasis theirs). "Rather, the City views the possible [Private Management Agreement] as an asset management partnership through which a Private Manager would earn compensation for driving long-term value and service to the public and creating Parking System upside for the City.”

The proposed benefits of privatization in New York City remain vague. The request for qualifications mentions better financial results, and the ability to “extend the City’s record of innovation in this area.”

That could, according to the request, include new technology to help customers find spaces, more payment options, and new ways to combat double-parking and the blocking of fire hydrants.

The mayor's office said one new payment technology might be payment by phone.

Muni-meters are themselves an innovation and are already beginning to transform the ways in which New Yorkers pay for parking.

In fiscal year 2011, customers paid with cash 62 percent of the time, and with credit 22 percent. This May, customers used cash 54 percent of the time, and credit 29 percent.

The city has also introduced a program called PARK Smart in some neighborhoods, which seeks to increase turnover by increasing meter costs during certain hours in high-demand areas like Greenwich Village and Park Slope.

New York's parking system is a cash cow, netting $80 million in 2010 and $93 million in 2011. It’s expected to net $99 million this year.

It's unclear how the system's unionized workers—466 are funded in next year's budget—would fit into this. But, presumably, the reduction in the workforce size would be another way a private company could reduce operating costs.

The request for qualifications only says,“Respondents will be asked to provide with their response an explanation of plans concerning the utilization of these City employees.”

Transport economist Charles Komanoff says the move "might be an initial step towards the city rationalizing and optimizing the use of curbisde space to improve both parking and transportation."