[Updated 5:15 pm with reaction, comment]
Boston’s city government is not budging in its regulatory stare-down with a startup that lets drivers pay for access to public parking spots.
But the company is forging ahead anyway.
Haystack, a Baltimore, MD-based startup, plans to start operating in Boston on Thursday. It has scheduled a launch party for Tuesday night in the city to promote its service, which lets users pay to find a public spot that is about to be vacated by someone else.
City officials, however, aren’t happy with the idea of a private company selling access to public resources, and now say they’re considering legal action to stop it from happening.
“These spaces are publicly owned, and cannot be privately sold,” Kate Norton, a spokeswoman for Mayor Marty Walsh, said Tuesday. “City representatives have met with Haystack to explore their service, and at this point, we remain concerned that their app, and apps like it, artificially inflate the cost of parking, and allow individuals to profit from public space. We are exploring our options to protect the residents and consumers of Boston.”
The Boston Transportation Department adds that it “will continue to evaluate any and all systems that may infringe upon the public’s right to equal access and/or those that may artificially inflate the cost of spaces,” and “will take appropriate measures to prohibit any such app that is determined to do so.”
Haystack charges a $3 rate for finding most parking spots. The company keeps 25 percent of fees as a commission and passes the rest along to the person leaving an empty spot. Similar companies have run into legal trouble in San Francisco for trying to make a buck by selling access to public streets.
Haystack founder and CEO Eric Meyer says his company isn’t helping people sell public parking spots. Instead, Meyer says, Haystack allows them to buy and sell information about whether they’re looking for or leaving a parking space.
“It’s information about when a spot’s going to become available. It’s not a physical spot. Nobody owns that physical spot, nobody’s leasing that physical spot,” he says. “It’s simply information that may lead to a successful exchange and it’s simply convenience for neighbors.”
That’s not exactly how Haystack sells itself to consumers.
On the company’s website and app, the marketing pitch is all about paying for—and making money from—public parking spots: “Offer your spot for cash,” the company says. “After you have confirmed a successful exchange, your spot is paid for automatically from your Haystack account or card on file.”
“It’s quick and easy for me to offer a spot,” an actor says in a promotional video. “And I even get paid when it’s taken.”
There’s also the Haystack app’s “Make Me Move” feature, which allows a desperate or deep-pocketed driver to name their price for getting another car out of a parking spot. The “information broker” argument doesn’t seem to hold as much water here, although Meyer denies the open-bidding feature constitutes an auction because there is no back-and-forth among drivers trying to one-up each other.
“The Make Me Move option is a great option for when someone happens to be parked in a coveted spot, for no reason, to make money,” he says. “They are willing to inconvenience themselves for a neighbor who’s really in need.”
There are also possible benefits for a city, Meyer says—getting people out of circling idling cars, and into paying parking spots, can both help reduce some emissions and make the city more money on its meter rates.
Meyer says “thousands” of people in the city have already pre-downloaded the app in anticipation of it launching this week. After hearing of the city’s continued opposition on Tuesday, Meyer said his company would begin offering its service as planned.
“There’s no action that’s been taken, and Haystack is still planning and excited to bring simpler parking to the streets of Boston this week,” he said.
City parking has started to draw more intense interest from digital entrepreneurs, who see a nagging problem that might be solved with the ever-growing network of smartphones being carried by consumers. But that’s also brought conflict as these upstart companies have run into the owners of some of the most valuable parking spots—the public.
San Francisco’s city attorney, Dennis Herrera, ordered a company called Monkey Parking to cease operations in late June. He also has targeted startups Sweetch and ParkModo, the latter of which was planning to pay people $13 an hour to camp in city parking spots as it tries to promote the app.
Herrera pointed out San Francisco police code that makes it illegal “to enter into a lease, rental agreement or contract of any kind, written or oral, with or without compensation, for the use of any street or sidewalk.”
Boston, of course, also has jurisdiction over its public roadways and controls who can or can’t make money there. It now looks like the city will have to use legal force to convince Haystack that its opposition has teeth.
