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Autonomous vehicle technology represents a major source of disruption in virtually every industry. We interviewed Jeff Eckerling, Senior Vice President of Revenue and Growth at SP+ Corporation, to discuss the potential impact of autonomous vehicles on marketing, branding and operations in various industries. SP+ (NASDAQ: SP) manages parking facilities with more than one million parking spaces across the United States and Canada.
Mike Zeinfeld: We’re talking with Jeff Eckerling about the impact of autonomous vehicles. Before we delve into that, Jeff, tell us a little bit about what your responsibilities are at SP+.
Jeff Eckerling: So I’ve been at SP+ now for a little over a year and a half. And this role is a brand new role at the company. My responsibilities fall into a couple areas. First, I am responsible for building out a new capability which is taking something that we see is done in other industries. So things like, the airlines, rental car, hotel industry, they have huge parts of their organizations that are focused on revenue management. One of the things that we’re trying to do here is build out that capability within our organization because at the end of the day, parking is very similar to how a hotel thinks about revenue per available room. We think about revenue per space, so something very similar.
In addition to that, I’m responsible for our marketing organization, which really serves two purposes. One is marketing our own brand, both to clients and to customers. And the other piece is providing marketing services to our managed clients. So that can be everything from an airport to a municipality to a commercial facility. That can include building websites, running advertising campaigns, providing digital services for those clients.
I’m responsible for our digital strategy which includes how we promote our brand online, but also how we think about online and various channels where we put our content and and parking inventory.
And then the last area that I’m responsible for is bringing what I would call both parking and ancillary revenues to our facilities by leveraging national relationships. So that’s where things like carshare/rideshare programs and other partners that we may want to work with at a national scale come into play.
So I’m really the one who’s thinking about the the future, as parking has changed a lot. And how we as an organization need to be thinking about how that affects us and our clients now and in the future.
MZ: So let’s talk about how “parking has changed a lot”. Even just the phrase “parking has changed a lot“ is interesting in and of itself. You wouldn’t think of parking as something that would change at all. So how do you see technology and changes in transportation affecting the parking business?
JE: If you think about parking and that decision that a consumer makes, if you go back five or ten years ago, people didn’t plan in advance and didn’t have the tools really to even plan in advance for where they were going to park.
The way that someone arrived at our facilities, it was literally by driving down looking for parking. That is what we would call our transient business, which was someone who would see our sign and it happened to be near where they were going. If you use the “burger and fries” analogy, parking is usually the fries, right? Someone’s going somewhere else and they need to put their vehicle somewhere but it’s not the reason they’re going to that destination.
Then the other part of our business which has historically been monthly parking, someone would become a monthly parker and the reason they become a monthly parker is maybe they were going to a facility a few times a week as a transient parker and they decide to sign up for monthly parking. It’s close to their office. It happens to be in the building where their offices are or it could be near where they live.
But now with all the different means that you can discover places to park your car, whether it’s a smart-phone or an alternate method. There’s numerous channels, channels you can go to, to do research and then create a more seamless experience where you can buy in advance. That’s really changed the dynamics of the industry. Our industry has really lagged a lot of other industries in terms of digital adoption. I was part of the prelaunch team at Orbitz and that was in late 2000 and bringing travel to the web. That’s 17 years ago. So the parking industry by contrast has really lagged a lot of others in terms of what I’d call digital adoption.
MZ: Thinking about the launch of the iPhone back in 2007, who would’ve thought that a smartphone would disrupt parking? Whether you’re in a strategic position or you’re an owner of a company, how does one think about self driving cars potentially disrupting your business?
JE: I think the first question around autonomous that one needs to answer is: do you believe that autonomous vehicles are going to happen? That question may sound ridiculous but there’s plenty of people out there who don’t believe it. They don’t see how it’s ever going to happen.
I fall into the camp of it is going to happen. But what is difficult to predict is when it’s going to happen at some sort of material scale, right? There’s obviously billions of dollars being invested in to the development of autonomous vehicles and the technology that will power those vehicles. I think of the things that do not get talked about a lot in the media fall into the public policy issues around autonomous vehicles and the challenges that municipalities are going to have… or for example what’s going to happen to the insurance industry. A person is insured, but if the person’s not driving, how is that going to affect the insurance industry?
MZ: Or if there are no accidents…
JE: Right, or if there’s no accidents… what happens to the insurance industry? So as it applies to the parking industry, we’re definitely thinking about this. It’s not like self driving vehicles are going to be able to be constantly be on the road. They’re going to need to go somewhere. There’s going to be a significant congestion problem. For us, what does autonomous mean for our business and how do our facilities change along with the corresponding revenue streams?
MZ: How real is autonomous driving in your organization? Is it something that people are feeling like it’s going to happen?
JE: Yeah, I think, we and other folks in the industry think about it in the way that we talk about it at conferences… we would agree that this is going to happen, but what it necessarily means to our business is difficult to predict right now. I think there are a lot of other factors that are changing our business that are happening today and will continue to evolve before we even have autonomous vehicles.
MZ: If you’re in a industry that feels like it is going to be severely disrupted, first off, how do you communicate this to the organization? And second, if you don’t have someone like you who’s thinking through the long-term plan, who does that responsibility fall to?
JE: I think in the case of an organization that’s nearly as big as ours, it starts at the top. Having buy-in that leadership needs to be thinking about the future. For us, approximately 80 percent of our locations are managed clients, so our clients are looking at us to run and maximize revenue. We have to be the ones to have a point of view on what’s going to happen to the future. And then we need to ensure that our employees across our organization understand this as well. This is fairly complicated stuff. So you have to make sure that you’re educating your organization, especially if they’re out and interacting with clients who expect you to be the experts.
MZ: Well, even if you think about the unintended effects of decisions that you’d make at a business level or at a regulatory level… if there’s less parking on the street, there’s potentially higher demand for your product. So there’s all sorts of consequences and indirect consequences. And it has to be extremely confusing if you’re in an effected industry.
JE: Yeah, there’s no doubt about it. And I think about other industries, such as travel, where I’ve seen material changes. When I started in travel, less than five percent of the airline tickets were purchased online. Today I think it’s 80 percent of the airline tickets are purchased online. So if you build the capabilities on day one, you’re not going to see a seismic shift, but there is certainly a tipping point.