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Parking space apps driven out of San Francisco, and that’s a good thing

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Why just drive away from a great parking spot when you could auction it off? It came as news to me, but people are already doing this in San Francisco thanks to iPhone apps like MonkeyParking and Parkmodo, which let you sell your parking spot to the highest bidder.

The fun appears to be at an end, however, as San Francisco’s top lawyer has sent out a cease-and-desist telling MonkeyParking to stop renting out city property without permission.

“Technology has given rise to many laudable innovations in how we live and work — and MonkeyParking is not one of them,” City Attorney Dennis Herrera said in a statement, adding that he is also asking Apple(s AAPL) to pull such apps from its store.

The head of MonkeyParking disagrees, and is framing the city’s decision as an example of overbearing regulation.

“We believe that a new company providing value to people should be regulated and not banned. This applies also to companies like Airbnb, Uber and Lyft that are continuously facing difficulties while delivering something that makes users happy,” said CEO Paolo Dobrowolny in an email statement to the Wall Street Journal.

The legal case is interesting. San Francisco is arguing that the parking apps violate a city law that forbids anyone to “enter into a lease, rental agreement or contract of any kind…for the use of any street or sidewalk.” MonkeyParking, for its part, makes a clever counter-argument that people are simply selling information about their departure time and not, as the city says, renting real estate.

So who’s right? My own two cents is that San Francisco and other cities should smother these services as possible. Despite MonkeyParking’s attempt to try to frame its apps as part of the so-called “sharing economy,” the comparison doesn’t hold up.

While other “sharing economy” examples involve companies using technology to expand and better allocate existing inventory such as taxis (Uber) or apartments (Airbnb), the parking apps are predicated on introducing new scarcities. They create an incentive to introduce more cars to further limit parking, which will aggravate city stress — and in way that favors the rich to boot.

“It’s as if AirBnB were paying people to burn down hotels,” wrote one wag on HackerNews, pointing to ParkModo’s reported practice of paying people $13 to sit in cars and rent out spots.

Update: it turns out there’s a peer-to-peer service called CARMAnation that lets users swap and sell private parking spaces. Co-founder Ashley Cummings wrote to say San Francisco gave them a green light this week (which makes good sense given that the site involves the leasing of private property, and will increase parking resources.)

Here’s a copy of the cease-and-desist and a press release with more details:

Monkey Cease Presskit

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7 Responses to “Parking space apps driven out of San Francisco, and that’s a good thing”

  1. Mcbeese

    Self-driving/parking cars is the real solution, and I can’t wait. Imagine these commands in an app…

    – loop the block (while i get my coffee)
    – park (new lots for self driving cars… much denser because nobody is getting in/out of car)
    – return
    – go home
    – flight pick-up (enter flight number and app sends car to airport when appropriate).

    This is not that far away…

  2. Seth Rosenblum

    San Fransisco is doing the right thing, but the wrong way.

    If the market will bear those costs for parking, the city just needs to increase the cost of parking meters on the street. Once you hit the price point where there’s 1 to 2 free parking spaces on each block, these services will have no value and people won’t be willing to pay the additional expense.

    Then again SF is ahead of the curve with market-rate meter parking…

    • Thanks for the comment, Seth, but I’m not sure if parking spaces lend themselves to a pure market solution. Don’t forget that many spaces, in San Francisco and elsewhere, are free — presumably because they are also a subsidized public service

      • Jim Jackson

        How does subletting your apartment out, when you have a lease specifically prohibiting subletting, lend itself to a ‘pure’ market solution?

        How does bypassing city and state regulations on taxis lend itself to a ‘pure’ free market solution? Does the Uber driver attend training? Are they fingerprinted for a true background check? Are they tested? Do they have commercial insurance? Does Uber and their drivers pay the city fees based on the business they are in?

        A true ‘pure’ free market hinges on a level playing field. Instead we have a new entrepreneur focused on how they can gain advantage by bypassing Government regulations and private contracts. This is not innovation it’s illegal though not criminal inj nature.

        • Mcbeese

          How does getting into a taxi with a complete stranger compare with getting into a car with a driver who has a published track record?

          How does giving your credit card to a stranger compare with paying the company directly through the app?

          There is a difference between a taxi company and a ride booking company.

          A true free market is open to disruption. Taxis are a couple of decades overdue for disruption.

          • Jim Jackson

            In San Francisco the licensed taxi driver submitted their 10 year driving record when becoming a taxi driver – does Uber pull a 10 year driving record?

            The taxi driver submitted fingerprints for a background check – does Uber get fingerprints from those it plans to use as drivers and make sure every time that it’s the same person that will be driving the car? They can’t do that without a face to face to see who is actually getting into the vehicle and driving it.

            The taxi driver submits to training and is tested – does Uber train and test its drivers?

            The taxi company provides commercial insurance on their vehicles which covers paid passengers and any use of the cab. Does the insurance policy of a normal use private vehicle cover commercial use? Are those drivers informing their insurance companies that they are ferrying passengers around for a fee?

            Uber maintains that the drivers, and their actions, are not their responsibility.

            The insurance industry says personal policies won’t provide any coverage.

            The insurance industry says ride-service drivers will have to buy commercial insurance to be covered when they’re driving for hire and maybe even when they’re not.

            At least some ride-service drivers are keeping their status secret from their insurance companies because they’re afraid of losing coverage. I called Uber to see about this posing as being interested in driving for them locally. The first thing they asked me was whether I was insured. Insurance is mandated by State law but my insurance isn’t going to cover me driving people around for a fee. That’s a commercial use of my vehicle.

            UberX Driver Arrested On Vehicular Manslaughter Charge – in between Uber calls so Uber says they have no responsibility. If a cabbie is driving the cab they are covered by the full commercial insurance policy. Its not like cab drivers don’t drive to the store in between calls to eat and such. The CPUC mandates $1 million in coverage all the time on cabs yet Uber months after that accident bought a policy covering $100k when a driver is logged in yet not on a call.

            The Uber driver who killed the child is named Syed Muzaffar. Is that a complete stranger?

            Then there is the Uber drive who hit a car, a tree and a fire hydrant causing probably millions in damages when medical is included because the hydrant hit a woman. Uber has distanced itself from the suit, pointing to clauses in its terms of service that absolve it from any accidents caused by its drivers.

            The difference between a taxi and a ‘ride booking company’ is that despite doing the same thing – one is operating within the law while the other is skimming money by operating outside the law.