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INNOVATION INSIGHTS: How this Australian startup is trying to solve a problem for millions every day around the world

Can
This post is part of the Innovation Insights series, sponsored by CommBank. At CommBank we believe innovation starts by asking questions. Discover new ways to keep your business moving. Start today at commbank.com.au/canbusiness.

If you’ve ever found yourself desperately trying to find city parking, you’re not alone.

The problem of sourcing parking, especially in central business districts, is a common problem for many Australian commuters who are travelling into the city for work everyday. And it hasn’t been helped by the high costs of parking and number of spaces which have been designated as loading and no parking zones throughout the day.

Photo: Divvy Parking/ Facebook.

According to NRMA, Sydney has one of the lowest number of CBD parking spaces compared to other cities in the US with just 209 parking spaces for every 1,000 employees. It also has the highest median daily parking rate with some drivers paying around $67 USD ($88 AUD) per day just to park in the city.

Australian startup Divvy Parking is helping to curb this problem by allowing commuters to tap into thousands of unused parking spaces in high-demand CBD locations.

Founded by Nick Austin in 2011, the agile parking solution gives drivers the opportunity to search and book for parking spaces in commercial buildings at a fixed daily or monthly rate. Commuters are able to reserve a parking spot before they leave home saving time and energy traditionally spent on searching for spaces in the CBD.

“We use technology to create a digital marketplace allowing owners to list their spaces quickly and allow commuters to search for those spaces, and book them, at a touch of a button,” says Austin.

“A user is able to come to the city knowing exactly which building to go to, book competitive rates with full flexibility instead of having to circle around.”

It also gets rid of the use of old plastic swipe cards, booking systems and cash seen in traditional parking spaces.

“Divvy manages the whole aspect of the booking including payments, reporting, member communication. We essentially create transparency where it didn’t exist before. We automate the whole transaction and we make it safe,” says Austin.

Nick Austin, founder and CEO of Divvy Parking. Photo: Supplied.

The digital startup currently has around 3,000 parking spaces in its commercial parking portfolio across Sydney, Melbourne and Brisbane with another 10,000 in the pipeline.

Austin says that as well as having hourly, daily and monthly rates, the startup is even looking to introduce rates by the minute in the future which would put it in competition with other services such as Wilson, one of the biggest parking operators in Australia.

“Divvy is on average 20-50% cheaper than traditional parking in the CBD. If you take Margaret Street in Sydney for example, the full day rate would be around $35 with the benefit of having unlimited flexibility and entry compared with 65-$70.

“On a monthly basis in Sydney’s CBD, the full rate for parking would be $1,200 whereas Divvy would be $700 making it around 30% cheaper. In Melbourne, the typical rate could be $700 with Divvy charging 350-$400 instead.”

But the startup has had to go through a number of transitions to reach the business model it has today.

In 2011, Divvy set out to be a peer-to-peer service allowing people to lease vacant parking spots such as garage spaces to other users. The startup gradually pivoted into the commercial sector after Austin realised there were large swathes of commercial parking spaces that were going unnoticed from commuters.

“We realised that the problems we wanted to help solve — congestion, expensive parking rates, pressure on our existing infrastructure — all had to be addressed on another level as well, not just by individuals,” said Austin.

The “Uber-style” startup eventually struck partnerships with commercial property giants such as DEXUS Property Group, GPT Group and Knight Frank and expanded their services into commercial parking spaces, with its mobile phone technology allowing for greater transparency for drivers to pinpoint idle assets when they were coming into the CBD.

The roll-out was made easier after the company secured $2.5 million in a Series A funding round in June last year, following an initial $300,000 raised in seed funding.

Park like a boss. Photo: Divvy Parking/ Facebook.

The innovative solution not only addresses a daily frustration for drivers but has also allowed property managers to improve the yields on their unused assets. While many parking spaces were privately owned and leased to tenants, workplaces are gradually becoming more agile with staff coming in two to three days a week leaving many of the parking spaces vacant.

“We are looking at three new elements for the startup: being bookable on demand, using a mobile phone to pay for booking and using a mobile phone to access buildings,” says Austin.

Instead of having to find the tenant and exchange swipe cards to access the building, the new hardware allows users to search, pay and access every single building using the same device.

“The mobile phone technology also plays right into the ‘smart city’ space with everything revolving around the phone, wallet and access location technology.”

Since launching in Sydney five years ago, the startup has expanded into Melbourne and Brisbane.

It has also set its sights on global markets including Hong Kong and China where high-density areas are proving difficult to accommodate for enough parking spaces.

“If Australian cities are to compete with the ‘smart cities’ of the world, across Europe, Asia and the US, we need to encourage greater collaboration in this space between the private and public sector; if we don’t, our cities won’t be ready to make the most of the incredible technology and innovations coming our way in the near future, and we’ll fall behind,” says Austin.

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