San Francisco: No-Go to Sharing Economy Parking App

Has the sharing economy concept gone to far?

This week San Francisco City Attorney Dennis Herrera issued a cease-and-desist demand to the mobile-to-mobile bidding app that’s been gaining a popular footing in the parking-poor Bay Area, MonkeyParking. The service, which is currently used on iOS devices, allows drivers to auction off their public parking places. As of this week, it was still available on the Apple Store, with the tagline that the app “lets you make money every time that you are about to leave your on-street parking spot.”

And that, says the city, doesn’t fly.

Herrera has apparently sent a letter to one of the CEOs of the Rome, Italy-based startup, Paolo Dobrowolny, to let him know that there is “a key provision of San Francisco's Police Code that specifically prohibits individuals and companies from buying, selling or leasing public on-street parking.” And, the letter says: “Police Code section 63(c) further provides that scofflaws – including drivers who 'enter into a lease, rental agreement or contract of any kind' for public parking spots – face administrative penalties of up to $300 for each violation. Because MonkeyParking’s business model is wholly premised on illegal transactions, the letter contends that the company would be subject to civil penalties of up to $2,500 per violation under California's tough Unfair Competition Law were the city to sue from buying, selling or leasing public on-street parking.”

Oops.

Reading city bylaws is always a good thing to do before launching a locally-based startup (this appears to have been one of the worst cities to choose for a hang-loose premise like auctioning public property use). But it also looks like the enthusiasm for sharing-economy startups may be wearing just a bit thin in SF. Only last year, the city launched a suit against another three-member partnership, FlightCar for its airport drop-off-and-share concept. It seems the service overlooked the sizable revenue that the city gets from traditional car rental companies that operate at the airport.

FlightCar's growing popularity has highlighted consumers' frustrations with airport parking costs, but it also dug into the revenue that the city uses to cover airport operating costs. San Francisco's suit against the startup, which launched last year, is still ongoing and, not surprisingly, could ultimately have an impact on the rights and responsibilities of similar car-sharing programs in San Francisco.

Still, can you really blame three up-and-coming entrepreneurs for trying to solve city parking woes? The city has been struggling with parking issues for more than 40 years (I speak as a former Bay Area native) and get-ahead tactics like an online auction platform seem like a natural, if not extreme, outgrowth of the problem.

But what MonkeyParking and the city’s struggle really highlights – unfortunately – is where the sharing economy seems to be going. Remember the days when people shared because they could help, or because they valued the exchange it fostered? In this case, I think it's a fair bet that few, if any, of the drivers who swap parking places via MonkeyParking ever exchange glances, a smile or a casual word. Sharing, in this case, is a major misnomer.

The question at hand may not be how the city addresses a sharing economy startup that it feels encroaches on public-run property or city bylaws, but what it is going to do to replace the incentive by residents and ticked-off tourists who hate searching for parking places.

I can’t help but wonder what would happen if the city were to sit down with six (or more) new entrepreneurs from FlightCar, MonkeyParking, Lyft, Uber and other sharing-economy initiatives and pick their brains for alternative, city-friendly ways to solve parking, traffic and consumer woes. (And yes, I'd love to be a fly on the wall with that one.)

As the city no doubt noticed last year, NerdWallet's 2013 list of the 10 best cities for entrepreneurs --which looked at things like funding availability, cost of living and networking/collaboration options -- was missing a key mention: San Francisco. That should be a wake-up call to a city that has made its reputation from innovative approaches. It just might find that smart, edgy professionals that have the moxie and the brains to find out-of-the-box solutions for city growth problems (especially those that aren't the city's favorite concepts) might have something unexpected to offer. The outcome, however awkward that first brainstorm might be, just might offer the next evolution to the sharing economy.

Image of parking meter: Jason Tester Guerrilla Futures