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Parking apps will allow owners to rent out parking spots by the hour

With companies like Uber and Airbnb shaking up traditional industries, other firms believe parking may be next frontier. The question becomes: Is it legal?
May 21, 2015
By Vanessa Lu

Uber is shaking up the taxi industry. Airbnb is eating into the hotel business. And now companies like Rover, WhereiPark and HonkMobile are sprouting up to cash in on empty driveways and parking spaces across Toronto.

Welcome to the sharing economy, now in overdrive, as companies and consumers try to figure out new ways to monetize existing assets.

Grant Brigden and Tim Wootton are working on their Rover Parking app, due to launch in late June or early July, where drivers can rent private spots by the hour.

“We want the parking to be cheaper than street parking or lot parking,” said Brigden. “The owners set the price, but we set the parameters.”

That means capping rates at no more than $2 an hour, though an algorithm will also offer a daily maximum rate. Rover will take 20 to 30 per cent from every transaction, split equally between owner and renter through fees added to the hourly price.

It plans to offer parking across the city, but is looking to concentrate in neighbourhoods like Roncesvalles, College St., the Danforth, Yonge and Eglinton, King West and Queen West.

But with the City of Toronto trying to crack down on Uber, the question becomes: Is it legal to rent out a parking space?

Like everything at city hall, it’s not a simple answer. Under the city’s zoning bylaw, the city has required most newer houses - whether it’s detached, semi-detached or a townhouse - to have one parking space. It can be in a garage, backyard or side yard.

“If you don’t have a car, we still require the space to be there,” said Klaus Lehmann, manager of the zoning bylaw project. “That space is under the owner’s control.”

If owners wish to rent out that single space, that’s fine. But you can’t rent out your driveway or line up cars in your backyard. “Once you do that, you become a commercial parking lot. That’s not permitted,” he said.

However, such activity is only enforced if someone complains. According to Mark Sraga, the city’s director of investigations, violators could face up to a maximum fine of $5,000 - but there have been no such charges in recent years.

While Rover is still trying to get off the ground, other companies are already fully operational including WhereiPark, which arranges parking spots on a monthly basis, and HonkMobile, which helps drivers find, reserve and pay for parking.

Jeremy Zuker and Alex Enchin launched WhereiPark last October when they realized there was no central online place to track spots available for rent.

Toronto's explosive condo growth has made parking even harder to find, with many former surface lots now home to condo developments.

“Parking is one of the budget line items everybody hates,” Enchin said. “Part of our early hypothesis is if people are paying $200 a month, will they walk an extra block or two to save $40 to $50 a month?”

So far, it’s working. They have rented out hundreds of spots and have about a thousand spots available - some managed by large parking companies and others are an individual’s driveway.

There is no cost to list, but they add a 20 per cent charge to the monthly rate. They collect the payments by credit card every month and send it to the owner through direct deposit or via bank e-transfer, avoiding postdated cheques.

HonkMobile CEO Michael Back, who founded and sold a successful payments company, likens what his firm is doing for parking to what Uber is doing to the taxi industry.

With HonkMobile, users register their licence plates along with payment information, which can include a credit card, bank account or PayPal number. The system is connected to 300 parking lots, mostly in Toronto, representing almost 11,000 spaces.

“You can drive in, press a button and pay for parking instead of digging for coins, or freezing outside,” said Back, adding the program will notify users if time is about to expire.

“We are doing people’s driveways, but that’s not our focus,” he said. “It’s better if I can grab 10, 20, 50, or 100 spaces.”

HonkMobile, which is the midst of raising $2 million in financing, is already working with some property owners who have many spots in places like Burlington, Pickering or Oshawa that are located near GO stations, where parking is in high demand.

“It is suburban residential so it’s a few dollars a day,” he said, but adding there are lots of other potential locations of underused space.