Fee collection for private parking violations not out of reach for companies
Not all private parking companies have gone down the road of issuing their own parking violations. Smaller operations in particular might operate under a belief that the additional workload to manage violations is beyond their budget or their resources. If a small staff contingent is already overworked, why would they want to add another level of responsibility? Wouldn’t it be easier to either forgo violations entirely, or farm the process out to a 3rd party? Don’t jump to that conclusion too quickly. While there certainly are hurdles to navigate, and pros and cons to taking this on, many smaller private companies successfully manage violations and generate a positive return on investment while seeing other operational benefits as well. We’ve outlined a few things to think about so you can decide what makes the most sense for you.
Know what parking tickets or charges are possible before you start
First things first. It’s important to understand your market if you don’t already. Municipalities differ in what and how they allow and manage tickets or charges for illegal parking. Many municipalities will limit who can issue “tickets” to the municipality itself or licensed private companies. While there are some practices that are common across Canada, your first stop should be with your local municipal office. You may need to work with your local municipality to create something suitable for your situation.
Expect to hear “Do I really have to pay this private parking ticket?”
Part of your job if you choose to collect on parking violations is to manage communications around the requirement for payment. It’s common for people to question the authenticity of the charge as well as the company’s authority to issue it in the first place. The average person also probably isn’t aware of the difference between a municipally issued “parking ticket” and the private parking violations that you issue – if any (again depending on your municipality).
Let’s take a closer look at some of the pros, cons, and issues you’ll have to consider.
- First and foremost, this is a potential revenue opportunity. Unique to each operation, you’ll need to determine for yourself if the cost associated with implementing this will be offset by the potential revenue generated. You also need to consider how much of a return will make the extra effort worth it.
- One of the benefits of the threat of further costs for parking illegally is that drivers tend to be more compliant with the rules. If they know it’ll cost them for parking longer than they should or trying to park without paying, they’re more likely to follow the rules and pay the required fees. The first charge or action by you is often the only notice a person needs to understand that their actions have implications. Compliance will improve over time, which could have an impact on your revenue and ROI analysis.
- Along with the improved compliance comes happier customers. Drivers will be less likely to park in reserved or permitted customers spaces so fewer legitimate customers will be inconvenienced when a spot is unavailable. This also makes it easier to manage times where parking is prohibited for everyone (for line painting, snow removal etc). Customers are notified via email, you have minimal illegal parkers (if any), and you can quickly make the spaces available again.
- Violation management software will help you to track repeat offenders and manage them appropriately. There are different strategies you can consider, including collections, towing (which can be cost prohibitive), or booting a vehicle. Often, parking management companies will work with a repeat offender to reduce the total owed to clear the account quickly and to hopefully encourage compliance in the future.
- For many operations who start collecting for parking violations, they find efficiencies in how they operate. They deal with fewer issues with their good customers, and have a formal and effective process to deal with those in violation. Some also find that with better compliance and processes, they can consider more options for how they issue permits and manage their lots. This often leads to further revenue opportunities because you better understand your customers. For example, you might notice a large group of customers consistently stay beyond their allotted time which might be the catalyst for a new, longer permit type that you can sell for a premium.
- You will have new operational costs. The biggest costs will be around the staff and resources needed for patrol staff. You will also need to factor in any costs for plate lookup for unknown vehicles which will generally be with local state or provincial departments. Collections will also have a cost. In many instances, parking operations try to manage collections themselves as much as possible and only use collections as a last resort. However, both processes will have costs.
- You need to manage this within the process required by your municipality. This means meeting any municipal certification or licensing standards. Patrol people for example generally need to be licensed to issue an official municipal ticket. Work with your local municipality to understand what you can and can’t do outside of an official designation. You may need to work out a special arrangement with them to achieve a scenario that makes sense for you.
- If you are issuing municipal tickets, the municipality gets the ticketing revenue. If in your municipality, this is the only option available to you, then any ROI is generated through improved compliance and more paid permits rather than fines or violations.
- Collections are not always easy. Whether you choose to use an outside agency or manage it in house, there is a cost associated with it. You can help yourself by making the process of payment easier with an online payment and appeal system that is easy for the driver. The additional of images to help document the violation typically leads fewer appeals as drivers have a hard time debating the evidence. You can check out our blog Pesky Outstanding Fines – The headache for parking managers for some suggestions on how to structure your collections process for the best results.
- You may be required to meet a formalized process to satisfy municipal requirements. This often includes having clear evidence of where and when an infraction took place, allowing for an appeal process, and options for early payment discounts. A solid violations management system (like what you can get with OPS-COM) comes with many of those features already included so this may be an easy hurdle to navigate.
Find out what others are doing
Other private companies have successfully implemented a process for fee collection of private parking violations. If you have connections with colleagues in the industry, you might want to reach out and see what their experience was like. We’ve had many conversations with parking operations about issuing and managing violations and would be happy to talk about your unique situation and options. Feel free to contact us online or give us a call at 855-410-4141.