The business of parking spots

The business of parking spots

Operating on a reverse model to eliminate the unorganised players in the Indian parking space, Central Parking Systems is all set to reach the Rs. 100 crore revenue mark in FY13

MADHUMITA PRABHAKAR

N. SATHYANARAYANAN, FOUNDER, CENTRAL PARKING SERVICES PVT LTD

N. Sathyanarayanan, founder-MD of Central Parking Services Pvt. Ltd. (CPS), is an entrepreneur by chance. For him, the idea to commence a venture in this space came through during his tenure at Honeywell, in early 2000. “We were building intelligent automated systems for Honeywell across South India and were looking to appoint a systems integrator to support a project. That is when my boss approached me and asked, “Why don’t you start off on your own in this role (of doing system integration around automated systems), as an entrepreneur, and I did,” says Sathyanarayanan.

With a mere Rs. 9,800 from his last salary, a heavy dependence on his skills and prospects of the then booming IT industry, Sathyanarayanan had an open mind to seize every opportunity to build his business. However, his first assignment with the Prestige Group, to build a parking system for Garuda mall at Bengaluru, made him realise that operating a parking lot is a more profitable business than just handling system integration. “After the mall opened, people started noticing the novelty associated with the new parking systems installed at the mall. That is when I realised that system integration is a very small part of designing a parking lot and that operating a parking lot is a much better business because there is cash coming in everyday and that is the annuity of the business,” he explains.

Today, CPS operates in 32 cities, with 2,800 employees working across technology, operations, business development, training and skill development and marketing platforms.  Its client base spans across healthcare institutions (Apollo, Fortis), shopping malls (Forum, Garuda and Express Avenue), airports (Mumbai, New Delhi, and Bengaluru), educational institutions and IT parks. The company handles over 60,000 bays and manages 1.95 lakh cars and 1.50 lakh bikes in over 85 properties across India. It recorded revenue of Rs. 60 crore in FY12 and is aiming to hit the Rs. 100 crore mark in FY13.

Two years ago, CPS raised money from Chennai-based VenturEast to the tune of Rs. 5.5 million. It plans to raise another round of funds, to the tune of Rs. 5.5 million, in 2013.

Early days

In 2002, when Sathyanarayanan took a plunge into the parking business, organised retail in India accounted for two per cent and was expected to grow to just 10 per cent in the coming years. This was in sharp contrast to nations like Singapore and the U.S. where organised retail already accounted for nearly 60 per cent of all retail businesses. “Even today, a large part of the business is unorganised, but the good side is that with an increasing number of organised infrastructure coming into place, developers want to work with people like us, who bring in certain value add. We told ourselves, this is a story that seems to work, why not be a part of it?” says Sathyanarayanan.

Carrying forward the learnings’ obtained from developing parking systems at Garuda Mall and Forum mall in Bengaluru, the company branched out to New Delhi, Mumbai and Kolkata in a move to expand its client network. Incidentally, that was also the time when airports across the metropolitans were getting privatised, and that presented a huge business opportunity for CPS. In a matter of time, its project pool included the Bengaluru and Mumbai airports, the new line of metro stations in New Delhi and Bengaluru and Apollo and Workhardt hospitals.

The whats and hows of building a parking system 

Typically, when a shopping mall is being constructed, the process begins with the CPS architects and mall developers obtaining an environmental impact clearance from the Ministry of Environment and Forest (MoEF). In the second stage, the technology team studies the layout and designs the equipment that need to be deployed, the service level requirements, the system architecture and signage required to make the parking lot functional. Being a technology driven business, the company has also setup a centralised command centre in Bengaluru, which captures every transaction that takes places at CPS parking lots across the country. It also acts as an intranet to provide support for employees across departments. The third stage is the pre-operational phase in which the operations team identifies how the parking process needs to be laid out. Meanwhile, the logistics team ensures that the uniforms, ticketing papers and other materials are supplied on time and the learning and skill development team prepares the on-ground parking employees on etiquette and procedures.

CPS has developed its own training and skill development module for employees working at its parking lots. “Out of the billion people in the country, not many people want to work in a parking lot. There is dust, there are people abusing them, there are people who are unwilling to pay and so on. So, we developed a complete curriculum and learning centre for these employees to learn parking as a business, including safety and first aid techniques, customer care, technology and audit functions,” shares Sathyanarayanan.  The fourth stage involves the audit team, which keeps a track of the transactions and performance levels on a daily and monthly basis. Operating in a cash oriented business; CPS has taken the help of Ernst & Young to develop a complete process for stabilisation and reconciliation.

Monopolistic advantage

Sathyanarayanan believes the biggest advantage from being the first mover in the industry was the opportunity CPS got to educate the market and shift its perception about parking management from being a mere security guard’s chore to a value-driven venture. “We were given the responsibility to shape the future of the parking management industry in India with our initiatives. The challenge lay in adopting the best practices from across the globe and adding the Indian tadka to it,” quips Sathyanarayanan.

While it retains its first mover advantage, CPS continually faces the challenge of attracting the right talent to manage the right place. Sathyanarayanan draws an interesting example of customer management in New Delhi vis-à-vis in Kolkata. “In New Delhi, giving each customer utmost importance works like a charm. In Kolkata, people are extra cautious. An argument erupts between two people over a mere possibility of an accident. Thus, there is a story to tell in every city, when we talk about parking and traffic management and the challenge lies in recruiting and training the manpower to adjust to these environments,” says Sathyanarayanan.

Roadmap to the future

CPS has lined up an eye-catching line of technologies for the coming year. First in the line of inventions is the parking guidance system. In this, once a car enters a mall, the system will indicate where parking slots are available and in which aisle. “This will significantly reduce the time spent in searching for space and make operations much more efficient. It will also improve the turnover of the parking lot,” says Sathyanarayanan. Within a month, this system will be activated in a few malls in Bengaluru.

Another feature that the company has lined up for the year is a parking refill card, which is similar to a food court refill card. Thus, instead of undergoing the time consuming process of hunting for exact change and paying the security at the exit gate, the customer can simply swipe the card and acquire the receipt for the transaction.

The future focus areas for CPS are clearly laid out. “Firstly, our focus is to touch Rs. 100 crore revenue in 2013 and Rs. 300 crore revenue in 2014. Secondly, we would like to extend our parking management systems to highly lucrative segments such as tourist spots and religious centres,” says Sathyanarayanan.

Though the Indian parking systems market is at a nascent stage, Sathyanarayanan is proving to be a man on a mission. His company is all set to leverage on the power of technology to systematise and streamline every section of the unorganised parking space in India.


SNAPSHOT

Central Parking Services Pvt Ltd

Founder: Sathyanarayanan. N

Year: 2002

City: Bengaluru

Investors: Ventureast

Future Inventions: Parking guidance systems, parking refill cards


Concept in brief: 

In a move to standardise and raise the quality of parking systems in India, N. Sathyanarayanan, began as an entrepreneur in the systems integration business and moved on to build the first company, Central Parking Services Pvt, Ltd,,  to design new age parking systems in India. Today, Central Parking Services operates in 32 cities, with 2, 800 employees working across technology, operations business development, training and skill development and marketing platforms.  Its client base spans across healthcare institutions (Apollo, Fortis), shopping malls (Forum, Garuda and Express Avenue), airports (Mumbai, New Delhi, and Bengaluru), educational institutions and IT parks. Today, the company handles over 60,000 bays and manages 1,95,000 cars and 15,000 bikes in over 85 properties across India. It recorded revenues of Rs. 60 crore in FY12 and is aiming to hit the Rs. 100 crore mark in FY13. Two years ago, Central Parking Services was funded by Ventureast, to the tune of Rs. 5.5 million. The company plans to raise another round of funds, to the tune of Rs. 5.5 million, in 2013. 

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