A report on implementing a pay by phone pay by app parking system

This memo is in response to Order 1 from the November 21, 2016 City Council Meeting, requesting that the Traffic, Parking, and Transportation Department provide an update on progress towards the implementation of a pay-by-phone parking system and the total cost associated with this system.

Since our last report to the City Council on this topic, we have made significant progress on the implementation of a pay-by-phone system, and are very close to rolling out a pilot program in Harvard Square, which will launch within the next two weeks. Because we do not want potential pay-by-phone users to be confused and attempt to pay with the application prior to the system going live, we have not been widely discussing or publicizing pay-by-phone prior to this launch (this approach is based on industry best practices). As a result, the physical elements of the system (street signs and stickers on parking meters to indicate the pay-by-phone payment zones) and the marketing/outreach efforts will only be apparent immediately before the deployment date. We expect that those marketing efforts will expand quickly, and we have partnered with the Harvard Square Business Association, the Cambridge Office for Tourism, and Harvard University to publicize the system.

Over the past six months, we have been working closely with Passport Parking to develop and deploy our pay-by-phone system using the Passport application, which is available for both iOS and Android devices, and is also accessible through a dial pad interface on a conventional phone. Passport was one of two vendors selected by the Metropolitan Area Planning Council for a statewide contract, so we were able to enter into an agreement with them without undertaking a separate procurement. Our decision to use the Passport application was based on a number of key factors:  Passport appears to provide one the highest levels of customer service in the industry, both to municipal clients and to the general public that is the ultimate user of the system.

Page 2 of 4  Passport has a strong and proactive approach to marketing the system, to drive customer adoption and maximize the benefits.  Passport is the pay-by-phone vendor for Boston’s ParkBoston pay-by-phone system, and as a result, Cambridge customers will be able to pay using either the regular Passport application or the ParkBoston application. Passport also has a number of other municipal clients in the area, including Newton and Brookline.  We were impressed with the simplicity and ease of use of the Passport application’s user interface.

Implementing the pay-by-phone system has required significant effort from staff and vendors. Most significantly, the software on the handheld/mobile ticket writing computers use by our Parking Control Officers (PCOs) has required significant modifications to allow PCOs to verify the payment status of a vehicle parked at an expired meter, since they need to check whether the driver paid using the Passport application before they can determine whether or not to issue a ticket. In addition, this has required changes in the way we address “overtime” violations (when a driver stays at a meter longer than the time limit, even if they continue to pay the meter), since overtime violations will now be tracked at the pay-by-phone zone level, rather than by individual meter location. These changes have been extremely challenging for our Parking Management Information System vendor (Xerox State and Local Solutions), and unanticipated delays in their software development schedule have driven our current launch window.

As noted above, the pilot deployment for pay-by-phone will take place in Harvard Square (see attached map of the meters and pay-by-phone zone numbers covered by the pilot program). Assuming that we do not experience any major problems with the initial deployment, we expect to roll the system out to the rest of the parking meters in the city in a phased manner over the course of six to nine months.

Regarding the cost of the system, the ongoing direct costs to the City are limited, although there are significant staff costs associated with the initial deployment, including overtime to install streets signs and stickers on parking meters. Throughout the planning and development of the system, we have coordinated extensively with the Finance Department to estimate the impact to operating costs and revenues. The changes to the handheld software do not have a direct cost because Xerox’s contract requires them to make required software upgrades under the existing payment structure.

Users will be charged a 35¢ fee per parking transaction to defray the 15¢/transaction Passport convenience fee and the majority of the credit card fees of 20¢/transaction plus 2.4% of the transaction value. We expect that the convenience associated with pay-by-phone will outweigh this additional user cost, and this expectation has been borne out in other communities that have implemented pay-by- phone systems. Given this cost and revenue structure, the City will be responsible for paying the variable portion of the credit card fees (the 2.4% of the transaction value noted above), and we have budgeted for this cost in anticipation of this deployment. The exact cost will depend on how well-used the system is, but our initial revenue estimate for the Harvard Square pilot is in the range of $354,000/year-$875,000/year (depending on the adoption rate), which translates to budgeted costs to the City of $8,500/year- $21,000/year. The credit card fees absorbed by the City will increase as the system grows. As we expand pay-by-phone, we will be tracking these credit card fee costs closely, to understand the ongoing impact on the operating budget as compared to additional revenues that are collected.

Page 3 of 4 We look forward to continuing to work with the City Council, the business community, Cambridge residents, and other local stakeholders to make it simpler and more convenient to pay for parking, while promoting the use of sustainable transportation modes.

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