In hotel industry, there is a rather clear ceiling for their revenues; when the rooms are all booked out, it’s pretty much it. There might be some cash inflows from F&B and other event-related revenues such as renting out a conference room, but they are more-or-less still dependent to the room sales.
Such a unique ceiling allows hotel operators different perspectives on revenues. First, they are less interested in extending their revenues, other than opening up a new location or licensing out your brand name if you are a hotel franchise. Second, they are willing to bend their backs to sell a night of a left-over room that is already there. After all, something is definitely better than nothing.
Now, what if you could apply that perspective to other industries, or even to something else that is not yet considered as an industry?
Seoul metropolitan in Korea is a very dense city (only next to Tokyo, Wikipedia) with more than 25 million people living in the area size of Los Angeles County, Calif. And it is no brainer that such density of the city will make it very hard for the good folks in Seoul to get around the town. And it is even worse if you drive around the city because it will be almost always impossible to find a parking spot around the place you go to, even when you are willing to throw a few bucks for it.
On the flip side, the odd thing is that, just like any other big cities, there are lots of empty parking spaces attached to commercial buildings, residential complexes, or just empty lot that could be offered as a public parking. And if you’re the owner of the piece of land, it would not be too hard to guess that you would be willing to have people park their vehicles in your property for a profit. After all, no matter how small the profit is, something is definitely better than nothing.
So if you are very entrepreneurial, you would want to build something like ParkMe for poor drivers and lot owners in Seoul, so they can solve each other’s problem. The challenge is, however, unlike the cities in the United States or other motorized countries, those empty lots in Seoul are not standardized, and the data is not just available; the lots are mostly owned by individuals or small businesses hence it is nowhere near something you can call an industry, and the sizes of the parking spots all vary so sometimes even my X5 could not just be pulled into the small spot that only Elantra or smaller can park into.
Lucky them that they have Park Here, a Korean startup!
Taeseong Kim agrees that hotel metaphor can be applied to parking.
“Parking lots are hotels for cars. The difference is that for parking the turn-around is much faster than that of hotel – maybe even every 10 minutes. Also you don’t have to change sheets or make room for parking spots. I think that makes parking a great business,” says Kim.
However, the challenge still pertains even though Kim sees the opportunity. There was no public data or data on the rack.
“So we need to innovate the whole industry, not just to try to build something under some concepts like ‘share economy,’” adds Kim.
To innovate the industry, or even to “industrialize” the market, Park Here let its people out to every streets out there in Seoul to collect and structurize the data on publically available lots for public parking. The team investigated more than 23,000 different places for six months and gathered information on not just location, availability and parking rate, but also more hands-on information such as the average width and depth one parking spot in the specific parking lot.
Since its launch in January 2014, Park Here – who now connects drivers and empty parking lot operators at the parking rates of 73% average discount, has accumulated date of more than 5,000 parking lots in popular parts of Seoul Metropolitan Area, and reserved more than 89,000 parking spaces as of December 2015, which is a 435% increase from the previous year. For parking lot owners, Parking Hero has contributed to make an additional income of KRW 10,696,000 ($8,500) per month per owner, which would otherwise have not been made.
The Seoul-based startup with the unprecedented sets of data is expected to see an even more acceleration in the growth in the upcoming years, given the EV (electronic vehicle) market is just opening up in many countries in Asia including Korea, where Park Here can easily be integrated into the smart system of EVs such as Tesla and the likes.
Park Here has so far acquired early stage investments of undisclosed amount from various investors including SmailGate, Mirae Asset Venture Investments and KTB Network. Park Here also established strategic partnerships with and provide its service to DaumKakao, SK Planet, Kia Motors, Hyundai MnSoft (a subsidiary of Hyundai Motors), Jeju Island, and more.