Is Your Parking Management Company Charging Hidden Fees?

Fees are a sneaky way that many parking operators make a little extra profit from drivers and real estate owners. Drivers may not notice fees until checkout, and property owners may not know that drivers are being charged fees at all. Often given vague names like “Service Fees,” “Driver Fees,” or “Convenience Fees,” these charges can significantly increase a customer’s parking rate - particularly during longer parking sessions. And though drivers are shown an initial rate when starting a reservation, their final cost can be much higher, causing frustration. 

Despite their prevalence, it’s often unclear exactly why service fees are charged, how they’re calculated, or who keeps the revenue. It is clear, however, that fees are commonly used to pad rates for many parking management providers.

Just how widespread is this issue?

We wanted to know. More importantly, we think drivers and property owners should be aware of these practices. To find out, we tested the reservation processes for eight national parking companies and uncovered answers to questions like the following:

• How many management companies collect service fees?
• How are fees presented to customers?
• What are the different fee percentages?
• Are there differences for transient (hourly) and monthly drivers?

We also documented detailed aspects of the reservation and checkout processes during our research to clearly show fee amounts, labeling practices, and more. Read the full breakdown below to see precise fee percentages and the real-life purchase experience for your customers.

Parking Fee Analysis Results

Here are some of the key takeaways from our full data set:

• 89% of the companies we researched charged at least 1 type of service fee 
• Premium Parking charges the most fees, which could be as much as 50%+ of the total rate, depending on the reservation length
• Fees are most common for transient (hourly) drivers
• The average fee percentage is 8.25%
• The most common fee percentage is 10%
• Service fees are typically not shown to drivers until check out 
• Fee labels vary across providers and can include: Service Fee, Driver Fee, Non-App, and Convenience Fee

The research summary below shows parking rates from real booking results. However, rates and fees can vary widely based on factors like region, taxes, contractual agreements, booking platforms, facility type, permits required, etc. We tested rates across geographies and for varying amounts of time (e.g., hourly by different time blocks and monthly), and in some locations we observed no fees.

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In the following sections you’ll find specific results for each company we researched. 

‍LAZ Parking

Findings:

• LAZ Parking charges service fees for hourly parking
• There was only 1 nondescript service fee, regardless of the available parking amenities (e.g., valet, indoor, etc.)
• Service fees were not included in the initial rate shown, only at checkout
• No observed monthly service charges

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Diamond Parking

Findings:

• Diamond Parking appears to only accommodate monthly reservations through their website and several 3rd party applications. We were unable to make hourly reservations online
• Service fees were not shown in the initial rate, and there was no itemized list of charges shown at checkout 
• Monthly tax and fees are not described, but applicable taxes are estimated to result in a 9% fee as the remaining cost

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‍Premium Parking

Findings:

• Premium Parking includes multiple fees for hourly parking, and rates vary depending on how parking reservations are made (in-app or not in-app)
• Though there is a fee for not using the Premium Parking app, the general Service fee appears to be higher when booking in the app, possibly as a way to recover revenue from the non-app fee
• The Descriptive Credential Fee (applied where license plate recognition is available) varies but it is removed if a license plate number is entered before checkout 
• Service fees were not shown in the initial rate, only at checkout (sometimes up to 3-4 clicks deep in the purchase process)
• Monthly rates include a Service Fee and Card Processing fee totalling 10% of the total rate

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ACE Parking

Findings:

• ACE Parking charges service fees for hourly parking - from $1 to $2 per parking session
• The service charge is shown in the initial rate
• No observed monthly service charges

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‍Reimagined Parking

Findings:

• Reimagined Parking (formerly REEF) charges a flat $1 fee for hourly parking
• The service charge is shown in the initial rate, and an itemized breakdown is offered at checkout
• No observed monthly service charges, but there is additional permit fee for monthly parking. These fees range, but are most likely only incurred once during the initial reservation

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SP+

Findings:

• SP+ charges service fees for hourly parking
• The service charge is shown in the initial rate and consistently throughout the booking process
• The Service Fee is for “the use of technology,” but the final checkout screen is not itemized
• No observed monthly service charges

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Flash

Findings:

• Flash charges a single, larger service fee for hourly parking
• The service charge is not shown in the initial rate, nor is it itemized to help customers understand the purpose of the larger fee
• No observed monthly service charges

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Metropolis

Findings:

• While the standard hourly service fee observed was 5%, some cities had fees as high as 10% for hourly parking
• Hourly reservation capabilities are limited in the web app, and monthly reservation capabilities are limited in the mobile app
• Service fee description was “to support operational costs”
• Service fees were included in the initial rate shown to drivers
• Locations in some states had no fee for a monthly reservation

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‍Service Fees Can Hurt Your Reputation and Revenue

Despite the clever label, fees certainly don’t feel convenient. Drivers don’t want to get dinged with an added cost, especially after seeing the initial parking rate and only discovering the added fees at checkout. The reputational damage could lead to:

• Complaints
• Poor reviews
• Loss of repeat businesses

For some facility owners, hidden service fees can be omitted from reporting as the revenue isn’t generated from the quoted parking rate. Instead, it’s purportedly generated as part of the parking services provided. This can obscure the real financial performance of a particular facility, and the impacts could be substantial. For example, a parking garage with 150 spaces that collects $3 service fees for each hourly driver could generate thousands of dollars or more in additional monthly income.

Unfortunately, we’ve seen this exact situation when auditing profit and loss statements from real parking management providers, including some in this research article. Below is an example outlining monthly revenue reported to the facility owner compared to approximate revenue actually earned with fees added:   

• Total monthly parking sessions: 1,395 
• Total monthly reported revenue: $27,299
• Average parking percentage fee for provider: 10%
• Total approximate additional revenue from fees (unreported): $2,729.90
• Total approximate revenue with fees added: $$30,028.90 

Owners should opt for parking arrangements that prioritize clear reporting and low, standard processing fees. See how AirGarage can offer a superior parking management experience for parking facility owners with vertically-integrated technology, optimized dynamic pricing, and aligned incentives through a transparent revenue-sharing agreement.