5 Minutes to Understand the Hundred-Billion-Dollar Smart Parking Industry

Many private car owners often find themselves circling endlessly near their destination, struggling to locate a parking space. According to IBM’s research and analysis, On average, drivers worldwide spend about 20 minutes parking, while Chinese drivers spend roughly 30 minutes. It is even more severe during peak hours or in areas with high pedestrian traffic.

Typically, the parking process begins near the destination: drivers first scan for on-street spaces, then consider parking garages. They subsequently compare options based on the varying price points of different facilities, which ends up wasting additional time, resources, and efficiency.

By the end of 2016, the national motor vehicle stock had reached 290 million, including 194 million cars, while the number of licensed drivers exceeded 310 million. From 2010 to 2015, new‑car sales in China grew at an annual rate of over 12%. However, according to international standards, the ideal ratio of vehicles to parking spaces is between 1:1.2 and 1:1.4. As of 2016, the country had approximately 80 million parking spaces, indicating a substantial shortfall in parking supply, with demand exceeding 100 million spaces. According to relevant industry data, globally, nearly 30% of traffic congestion is attributable to drivers spending considerable time searching for parking spaces. This prolonged search not only exacerbates road congestion but also wastes drivers’ time and fuel resources, while contributing significantly to environmental pollution.

Both the government and numerous enterprises have recognized emerging demand trends and industry pain points. In November 2016, the National Development and Reform Commission issued the “Notice on Launching Pilot and Demonstration Projects for Urban Parking Facilities.” While designating Beijing, Shenzhen, Chengdu, Suzhou, and Libo County in Guizhou Province as the first batch of pilot cities, it also prominently introduced… “Internet Plus Parking” The new ecosystem‑driven business model is advancing smart parking development through national policies and related financial support. Operators of various smart parking systems, equipment suppliers, and even the three major tech giants—BAT—are all actively joining the surge in smart parking initiatives.

The core of a smart parking system lies in leveraging big data to collect and disseminate real-time information, complemented by advanced technologies and equipment, with the ultimate goal of enhancing parking efficiency and reducing customers’ time and resource expenditures.

In the United States, there are more than 40,000 parking facilities, most of which operate under a collaborative management model. By partnering with third-party smart parking operators—such as software providers and equipment vendors—these facilities can deliver optimized solutions that reduce capital expenditures for owners while maximizing revenue. In its early stages, the U.S. smart parking model employed a pre-planning and pre-booking approach, initially applied to event parking—“Event Parking.”

“Event Parking”: Here, the term “event” refers to group activities such as sporting events, concerts, rallies, and the like. In the United States, many such group events rely on advance planning and reservation systems to maximize parking space utilization, reduce drivers’ parking time, and improve overall parking efficiency. Most of these parking facilities are on-site at the event venue and often collaborate with nearby lots to share the burden during peak periods.

ParkWhiz is a service operator dedicated to providing event parking solutions. Founded in 2006, ParkWhiz focuses on managing and operating parking spaces around major event venues across various regions. It enables users to make advance reservations and plan ahead through its online platform, while also expanding its reach through strategic partnerships with ticketing websites for major events and traditional ticket‑purchase channels.

As operators and suppliers of related equipment, in the United States, SpotHero and Parking Panda are both competitors of ParkWhiz. Over time, an increasing number of operators have begun expanding their service coverage, focusing on technological R&D for relevant systems, data aggregation and analysis, payment processing, and the development of access‑control hardware for parking facilities.

Meanwhile, as car‑sharing services have expanded across the United States and the rental‑car industry has boomed, an increasing number of car‑sharing and rental‑car companies have proliferated nationwide, generating substantial demand for vehicle rentals alongside a growing supply of cars. Public parking spaces can no longer keep up with this surge in parking needs; consequently, many firms have begun partnering with nearby parking facilities. Numerous rental companies have even located their outlets right near parking‑lot entrances, while well‑capitalized operators go so far as to lease entire floors of multi‑level parking structures to accommodate the storage and maintenance of their rental vehicles.

Similarly, car‑sharing platforms like Getaround and Zipcar have partnered with parking operators and established dedicated, segregated parking zones to ensure the secure parking of shared vehicles, thereby reducing rental costs for users. Likewise, ride‑hailing services Uber and Lyft have forged strategic alliances with parking‑facility operators in their service areas, working to provide additional benefits for their drivers.

As for payment methods, the U.S. does not yet enjoy the same widespread adoption of mobile payment systems like WeChat Pay and Alipay that are prevalent in China. Even with the availability of tools such as PayPal and contactless payment options, due to established lifestyle habits, many drivers still prefer cash, credit cards, RFID cards, and parking tickets for paying for parking.

In the domestic market, amid the “Internet Plus” boom, the concept of “Internet Plus Parking” has certainly remained a hot topic. Between 2014 and 2015, numerous startups emerged in the smart‑parking sector, including Parking Treasure, Dingding Parking, China Good Parking, and Worry‑Free Parking. However, the most talked‑about player remains ETCP, a veteran in the smart‑parking industry. Founded in 2012, ETCP leveraged a “three‑free policy”—free installation, free maintenance, and free upgrades—to partner with over 3,000 parking facilities by the end of 2016, signing contracts with more than 5,000 parking lots. Its services cater to high‑demand areas such as airports, commercial centers, office buildings, and residential neighborhoods. In 2016, ETCP also secured nearly RMB 2 billion in Series B funding, further strengthening its competitive edge and cementing its position as the industry leader in China today. ETCP’s primary user experience revolves around an app that enables drivers to check real‑time availability, navigate to parking facilities, enter and exit without stopping, and make automated electronic payments. At its core, ETCP capitalizes on big data and a robust platform to offer ancillary automotive services—such as car washing, maintenance, insurance, and repairs—while also promoting related value‑added offerings, thereby covering the entire parking journey. By leveraging data analytics and LBS‑based push notifications, ETCP delivers even greater convenience to users.

In addition to startups specializing in smart parking, the BAT trio—Baidu, Alibaba, and Tencent—have each leveraged their respective strengths to build software platforms and enter the broader smart‑parking ecosystem, pursuing strategic positioning. Baidu boasts Baidu Maps, the most widely used map app in China; Tencent’s WeChat commands the largest user base in the country; and Alibaba’s Alipay has long been the most popular and actively used payment method nationwide.

The concept of smart parking is currently all the rage in China, with major players eager to stake their claim and rapidly expand their footprint. They are leveraging a variety of strategies to secure funding, accelerate growth, capture market share, and carve out a prominent position in the industry. Some argue that the smart‑parking ecosystem remains immature, with unclear business and revenue models. Indeed, numerous challenges lie ahead in its development. Nevertheless, the sector still offers ample opportunities—worth exploring—for those willing to invest time and effort.

A competitive landscape characterized by fragmented, siloed operations poses significant challenges to the market’s long-term development. Given the limited availability of market resources and customers’ strong demand for standardized technology adoption and operational practices, integrating resources and achieving standardization has become the industry’s central issue—particularly within the same city or province. Current trends mirror those of China’s sharing‑economy model, leading to a “big fish eat small fish” dynamic: the entity with greater capital secures more resources.

The concept of smart parking is not overly futuristic, yet for some customers, awareness of basic parking safety standards remains inadequate. In particular, in certain second- and third-tier cities, even fundamental traffic‑management systems are still underdeveloped, which has likewise had a significant impact on the current parking industry.

Surveys reveal that, in China, purchasing a new car is no longer the sole option for consumers’ mobility: the used‑car market, rental agencies, ride‑hailing and car‑sharing services, and related ride‑hailing apps are increasingly favored. As in the U.S. market, seamlessly integrating other stakeholders across the value chain—and aligning this with the current convergence of the domestic car‑rental sector, the sharing economy, and traditional car‑ownership models—presents both a new challenge and a promising entry point.

Meanwhile, the number of consumers willing to purchase electric vehicles has tripled since 2011, thanks in part to government subsidies and tax incentives. In addition, in certain first-tier cities, the administrative advantages associated with registering electric vehicles have further boosted consumer favorability.

However, most consumers still have certain reservations about purchasing electric vehicles. First, they worry about the safety of emerging technologies; second, they are concerned about charging times; and perhaps most importantly, the lack of charging infrastructure severely limits the practicality and convenience of using electric cars.

As technology advances and the number of stakeholders grows, autonomous vehicles, smart parking systems, and other innovations are increasingly being integrated into smart parking solutions, driven by the development of government‑led smart cities.

The development and widespread adoption of electric vehicles and autonomous vehicles (AVs) are driving a growing array of related demands. Today, many smart parking system operators are focusing on designing dedicated parking spaces for EVs and AVs, often leveraging sensor technology or robotic automated parking systems. These innovations help maximize parking space utilization and improve parking efficiency. Preliminary experimental results indicate that automated parking systems can complete the process—from locating a vehicle in the parking garage to delivering it to the owner—in just 3 to 5 minutes. In Somerville, Massachusetts, Audi is collaborating on AVs and automated parking technologies. In 2017, Audi unveiled its latest breakthrough in AI‑powered automated parking with the A8 model. Meanwhile, Mercedes‑Benz’s museum in Stuttgart, Germany, has become a pilot site for the brand’s automated parking system, which uses a dedicated app to manage vehicle parking. By analyzing available space at the destination, the system employs sensors to autonomously position the car in the most suitable spot.

In fact, beyond the already widespread business models—such as shared parking spaces, valet parking, parking reservations, online payments, and ancillary services—smart parking still holds numerous untapped commercial opportunities. A single tree cannot form a forest; the standalone development of smart parking systems is bound to face many setbacks and challenges. As an essential component of smart city initiatives, the most promising path forward lies in aligning with the broader trajectory of smart‑city development and fostering genuine, collaborative progress among all stakeholders across the industry chain and the wider ecosystem.