Chicago Test of Mobile Payments for Parking Accelerates Into Massive City Rollout

The private operator of Chicago’s 36,000 parking meters announced Tuesday that drivers will be able to pay with mobile phones at all of the city’s metered street spaces later this summer. The expansion reportedly makes Chicago the biggest market for mobile parking payments in the country and comes just three weeks after Chicago Parking Meters LLC, the private organization licensed to operate the meters, and the city announced a test of mobile payments involving fewer than 300-metered parking spaces.

The test in a neighborhood just west of downtown generated more than 3,500 downloads of the ParkChicago app for Android and iOS mobile devices, and more than 1,600 people used it. “We launched the pilot to garner feedback from the public, and the response from drivers and local businesses has been very positive,” Dennis Pedrelli, chief executive of Chicago Parking Meters, said in a news release. “We look forward to introducing this new service to residents, commuters and visitors around the city, as we continue to seek out new ways to improve the parking experience in Chicago.\”

The free app was created by Charlotte, N.C.-based PassportParking Inc., which has developed Internet-based parking systems for 70 jurisdictions, including a mobile app for the city of Omaha. A PassportParking spokesperson says Chicago’s will be the nation’s largest mobile-parking program when it’s fully rolled out.

Jordan McKee, senior analyst of mobile marketing and commerce strategies at Yankee Group in Boston, says he can’t confirm whether Chicago’s is the biggest mobile-parking rollout ever, but it undoubtedly will be near the top. “I would absolutely say the size of it is impressive,” McKee tells Digital Transactions News.

McKee sees parking and mass transit as acceptance niches that are particularly well-suited for mobile payments because smart phones can eliminate what he calls “pain points” that include the need to carry cash for small transactions. PassportParking’s ParkChicago application as well as apps from other software developers typically not only enables the driver to pay for parking, but also to receive alerts that their time will soon expire. Then the driver can “feed the meter” again without having to rush back to the car.

“Mobile payments are best suited for implementation where a pain point resides,” says McKee. “[In] the majority of initiatives, largely centered around the mobile wallet, there isn’t any real pain point.”

To use ParkChicago, drivers download the app on a smart phone or go to the ParkChicago site on online or mobile browsers to create an account linked to a major-brand credit or debit card. They fund it with least $20. Balances are replenished automatically with $20 when they fall below $10.

At the parking spot, drivers use the app or a mobile browser to enter their license plate number and the six-digit zone number displayed on a nearby ParkChicago sign, and pick how much time they want to park. Some 42,000 signs will be replaced with new ones with ParkChicago information. Hourly rates are the same as conventional payments, although mobile users will pay a 35-cent fee for time under two hours. Single transactions for longer times are not assessed the fee.

Mobile users do not get a dashboard receipt from a nearby paybox as regular payers do. Instead, meter readers enter the plate number to confirm payment. Drivers receive an alert 10 minutes before their time is to expire, at which time they can pay for more parking. Consumers with feature phones can use the system via text message.

Street parking has been a pain point for Chicago-area drivers since late 2008 when former Mayor Richard Daley strong-armed the City Council into agreeing to lease the meters for 75 years under a controversial privatization deal that generated $1.16 billion for the cash-strapped city. Chicago Parking Meters subsequently raised parking rates considerably and is entitled to reimbursements when the city has to take metered spaces out of service. The company, however, says it has spent $40 million since 2009 on modernizing street parking, including replacing old, single-space meters with multi-space kiosks that accept credit and debit cards as well as coins.