S.F. Tells Startup to Stop Selling Public Parking Spaces Using Smartphone App

Tuesday, June 24, 2014

Want to auction off your hard-won public parking space in famously hard-to-park-in San Francisco? There is an app for that.

An illegal app, at that, according to the cease-and-desist order issued by the city Monday to MonkeyParking, a Rome-based startup that uses an iPhone to troll for desperate and/or appreciative drivers headed their way. MonkeyParking drivers can auction off their space starting at $5 with default options up to $20.

“Technology has given rise to many laudable innovations in how we live and work—and Monkey Parking is not one of them,” City Attorney Dennis Herrera said in a statement. He warned that $300 fines would be issued to motorists who violate San Francisco’s ordinance prohibiting companies or individuals from buying, selling or leasing public on-street parking.

That would apply to buyers and sellers and is applicable for each violation. The company could also be subject to a $2,500 fine for each violation under the state’s Unfair Competition Law because its business model is predicated on an illegal activity.

The cease-and-desist order also asks Cupertino-base Apple Inc. to remove the app from its online store.

The city attorney warned MonkeyParking that it will also be held accountable for encouraging drivers to use cellphones and other wireless communications while driving, an unsafe violation of law.

Next up for the city attorney are two other app-based companies that facilitate the exchange of parking spaces for money. Sweetch charges users $5 when they inherit a parking space from another Sweetch user, who then gets $4 of that fee. ParkModo, said to be ready to launch this week, offers to pay drivers $13 an hour to grab parking spaces in the Mission District for eventual sale.

They are some of the latest companies to construct innovative business models around smartphone apps that connect customers directly to services, while sidestepping much of the overhead, regulatory oversight and taxes that burden more conventional businesses. Ride-sharing startups like Uber and short-term housing ventures, like Airbnb, are making strong incursions, subsidized by venture capital, into traditional businesses, while, not surprisingly, incurring their wrath.      

Local and state authorities have struggled to develop comprehensive regulatory frameworks for ensuring adherence to existing laws, fair rates, insurance, safety, reliability and fairness while not illegally impairing the application of new technology in ride-sharing and housing.

The approach to dealing with parking app startups is a little different.

–Ken Broder


To Learn More:

San Francisco Orders Parking Spot Auction App to Cease-And-Desist (by Cyrus Farivar, Ars Technica)

City Attorney Throws a Monkey Wrench into Parking-Space Auction App (by Jasper Scherer, San Francisco Bay Guardian)

City Attorney Tells Startups to Stop Selling Public Parking Spaces (by Patrick Hoge, San Francisco Business Times)

Sf Cracks Down on "Monkey Parking" Mobile App (by John Coté, San Francisco Chronicle)

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