Chicago Tribune Report Says Meter Deal Remix Benefits Company
Friday’s front page story in the Chicago Tribune states Chicago Parking Meters, LLC will continue to dramatically benefit from Mayor Emanuel’s proposed changes to the city’s infamous 2008 parking meter lease deal.
The Tribune spills a lot of black ink looking at city numbers and making unsubstantiated projections.
In general, the Tribune breaks no new ground or comes to any conclusions which were already pretty much of the foregone kind.
The story tries to leave readers with the impression that it’s a huge surprise that Chicago Parking Meters, LLC, (the company which controls the parking meter system for the next 71 years and looks to make billions of dollars in the process) will continue to receive additional revenue for street closures and other events which impact meter revenue.
In reality, Mayor Emanuel’s renegotiated agreement does not completely eliminate any of these revenue possibilities but only and allegedly, reduces the city’s exposure to coming out of pocket for such events.
The Mayor and his staff has never made the promise of eliminating these extracurricular payments–just that it would reduce these payments by one billion dollars or more over the lifetime of the lease.
In our opinion, at least two of the Tribune’s claims seems over exaggerated.
The first is that payments to the company for overuse of drivers utilizing disability placards to park free at meters will generate an additional $216 million over the next 71 years.
The reason the Tribune’s numbers on this are incorrect is the state passed a law eliminating free disability parking at parking meters except for vehicles used to transport the most severely handicapped individuals–people who physically cannot interact with a parking meter.
It’s our opinion, this issue will essentially evaporate.
The other overstated metric is the newspaper’s estimates on revenues for mobile phone payments. The meter remix allows CPM to charge a 35 cent convenience fee for any transaction under two hours.
Considering there is no public data on usage of pay by cell options, nor any idea of how it will be accepted or utilized in Chicago, the Trib’s estimate on this seems highly suspect.
The newspaper is also naive to believe that the 35 cent convenience fee is without cost to CPM, which is what one infers from their numbers. CPM will have to pay something to one of the several companies which provides pay by cell services for their payment technology, so that 35 cents is not pure profit.
Read the Tribune’s full report, “Advantage, meter firm.”