It's an all-too-familiar motorist ritual: enter a destination into a GPS or route-planning app, drive there, and then start the quest for parking, often circling endlessly.
"You don't know where [parking] is, if it exists or how much it costs," says Michael Back, founder and CEO of Toronto startup Honk. "When I got out of my payments business in 2013, it became obvious this was an industry that was screaming for change."
Back, a 42-year-old serial entrepreneur, ran a payments company from 2001 until 2013, when he sold it. He then started work on an app that makes it easier for drivers to find and pay for spots.
That app is HonkMobile. It shows on-street meter spots and off-street lots and the price per hour or day at more than 550 locations across the Greater Toronto Area. The goal is to connect anyone who owns a spot – from a single stall in a condo to a lot with a few thousands spots – with drivers.
"It is a broken transaction," says Back. "If you think about parking, you have an industry that was stuck in the 1950s … it was pretty much the only thing you couldn't find on the Internet."
HonkMobile brings all parts of the parking ecosystem under one umbrella, similar to what Uber did for transportation. Rover, another popular app launched last year, is strictly for personal unused parking spaces. The Green P parking app is only for Green P lots in Toronto. "We're the only app that lets you buy the commercial inventory, private inventory and reserve it in advance," says Back.
If the idea sounds familiar, it is because Back was featured on CBC's Dragons' Den, where he made a deal. It fell through, so the company instead raised $3-million from a venture capital firm by the end of 2015.
Honk charges a lot operator a transaction fee, and the price for using the app to pay for the spot is often the same as paying at the lot. The benefit to the operator: The app increases business by making drivers aware of the lot.
"We're changing the business by creating more operators and giving them the ability to make more money," says Back.
Back hopes the app will change driver habits, prompting people to start looking for spots sooner and making decisions about whether they want the closest spot or a cheaper spot a block away. Not only can the app save a driver from time spent circling, there's no more fumbling with coins – users input their license plate information and pay through the smartphone. Users also get a warning sent through e-mail 15 minutes before the payment runs out.
Just as Airbnb and Uber have changed lodging and transportation – allowing people to make money from their home or car – Honk aims to do the same for parking. The idea is to think of an empty parking spot as available real estate.
"We have a tire store, during the day it has bays … but, at night, they close for business and turn the real estate into paid parking," Back says. "We do churches, schools, right down to people's driveways."
The app includes about a dozen universities, parkades in downtown Toronto and city parking in Oshawa – including spots on the street. In that city, drivers can pay with their phones and don't have to rush out to refill the meter. The system used by parking enforcement officers won't let them write tickets during the payment period.
However, HonkMobile won't be facilitating transactions in which motorists parked in free street spots sell them. This is how Haystack, an app created by a Baltimore man, worked. People sold access to public parking spaces through Haystack, which took a cut of each transaction. There was a public outcry and Boston city council eventually banned the company from making money on a public resource.
HonkMobile fully launched at the end of 2014 and today has more than 50,000 spots in more than 600 locations – and is expanding into the United States.
"It's not just an app, not just parking, it is a whole new way to deal with the parking transaction," Back says. "Why not know where your parking spot is before you get there?"
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