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A Business Model of Smart Parking Application Using Sensors: Park@

Technical Report · January 2021

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 A Business Model of Smart Parking Application
Using Sensors: Park@
Mahmut Enes Akgök Mahmud Meriç Şahin
Bartu Karayel
Department of Industrial Engineering Department of Industrial Engineering
Department of Industrial Engineering
Istanbul Technical University Istanbul Technical University
Istanbul Technical University
Istanbul, Turkey Istanbul, Turkey
Istanbul, Turkey
akgok16@itu.edu.tr sahinma17@itu.edu.tr
karayel16@itu.edu.tr
Hüseyin Özdemir
Emre Tatlı
Department of Industrial Engineering
Department of Industrial Engineering
Istanbul Technical University
Istanbul Technical University
Istanbul, Turkey
Istanbul, Turkey
ozdemirhu17@itu.edu.tr
tatli18@itu.edu.tr

II. VALUE PROPOSITION

Abstract—This paper shows a business model of a
hypothetical smart parking start-up called Park@. Our start-
up will help the society by reducing the traffic jam, congestion
and also protect the environment. In order to achieve this, we
decided to make an application that shows the available
parking places around the city and also guiding them to the
desired parking location. Smart parking sensors will be placed
to the parking spots of our selected business partner Ispark.
The reason for Ispark selection is, it is the largest parking
place provider in the city of Istanbul and the most reliable one
to work with. Revenue will be generated from the users of the
application when they park their cars at Ispark. In this case
our application will take their payments and we will take a
certain amount of commission.
Keywords—smart parking, sensors, business model, cloud,
UNSDG, IOT
I. INTRODUCTION
Digital solutions are the key to many problems with the
development of technology today. Number of new digital
solutions and new business models are increasing in the
world. The study compiles 40 sample companies and
summarises their business models [1]. New business ideas
are enabled and enhanced through grey areas in the
European regulatory framework. These activities include
managing metering data for small end customers,
monitoring grid and voltage related constraints as more
renewable sources connect to the distribution system,
infrastructure for EVs, ownership/management of meters,
flexibility services – but don’t inhibit market for aggregators
[2].
It is getting harder for vehicle users to find an available
parking lot. When drivers try to find a parking space, they
can cause confusion in traffic and increase their carbon
emission. The development of technology not only helps
humanity in many matters, but also helps in finding parking
spaces. The application we aim to develop finds the closest
parking spaces to the drivers and saves the drivers from the
complex process they are in. A similar smart parking start-
up and its business model is given in [3]. This system will
play an important role in the cities of the future.
Today, vehicle owners encounter many problems in traffic
in the city. One of the most common problems drivers face
is not being able to find a parking space. At this point,
Park@ aims to support drivers. Park@ is a smart parking
company that helps users to find desired parking place in a
certain area of the city via real time data coming from
sensors. Therefore, saves time and fuel for the users and also
reduces the congestion and carbon emission generated by
the vehicles.
• IOT: Sensors and microcontroller are used to
confirm whether there is a vehicle in the parking
lot. We use cloud system and mobile device for
data flow
• AI: We use AI to find the most suitable parking
space in the user's area.
• Cloud: We use cloud system to store real-time data
from sensors.
A. Smart Parking Sensor
The easiest way to detect whether there is a vehicle in the
parking area is to use robotic systems instead of manpower
as in other sectors. For this reason, we prefer to use sensors
in our company.
• Smart Parking Sensor Technology is a radar sensor
device that allows the detection of parking
availability indoors and outdoors.
• It sends the live occupancy information of the park
to a cloud platform, allowing real-time parking
information to be viewed on multiple devices.
• No maintenance by personnel on site is necessary.
This saves you time and money.
• It only takes minutes from sensor installation to
receiving the first data. The sensor is glued to
different surfaces or screwed in the ground with
ease.
• Inside, a Lithium battery ensures a lifetime of up to
5 years.
• It is resistant to external influences such as jam,
water, snow, corrosion and pressure.

XXX-X-XXXX-XXXX-X/XX/$XX.00 ©20XX IEEE

B. Types of Sensors
Today, different sensors are used in different the systems.
Sensors provide convenience to users in
different working models.
• Ultrasonic: By using ultrasound for measurement
detection, the accuracy of detection is increased.
The disadvantage of this type of sensor is a
potential blockage due to dirt.
• Electromagnetic Field Detection: This sensor
detects small changes in the magnetic field when
metal things get close to the sensor.
• Infrared: This type of sensor measures changes in
ambient temperature and detects motion.
• Magnometer: The magnetometer is a sensor that
measures magnetic field intensity and helps to
understand the object’s orientation [4].
C. UN Sustainable Development Goals
Goal 3: Park@ makes the life easier for their customers,
therefore reduces the amount of stress.
Goal 8: Park@ contributes to the economic growth by
employing workers under its roof and creates added-value.
Goal 11: We help our customers to save time and fuel for
a sustainable future.
Goal 12: We reduce the fuel consumption in the cities.
Goal 13: By reducing the carbon emission, we save the
climate.
D. Business Model Canvas
Overall summary of the business model that shows the main
aspects such as value proposition, customer segmentation,
channels, cost structure, revenue stream etc. can be found on
the Table.1.
III. TARGETED CUSTOMERS
With more than 4.3 million vehicles Istanbul is a heavily
trafficked and crowded city. There are 2.9 million registered
cars and 360.000 registered motorcycles in Istanbul [5].
Turkey has a high smartphone usage rate with 77% of the
population [6]. Our ultimate goal is to reach every car and
motorcycle user in Istanbul who has a smartphone, yet with
the phase 1 we initially targeted easy to reach mass, which is
young people (18-29) who uses social media frequently and
familiar with social media advertising.
A. Business Partners
Ispark, as an affiliate of Istanbul Metropolitan Municipality,
operates IMM’s parking lots and multi-level car parking
garages. Ispark was chosen as primary business partner
because of highest capacity of parking lots and reliability
among other park related companies in Istanbul.
B. Available Parking Places
Ispark has more than 700 parking lots with nearly 141,000
parking capacity. However, we initially targeted indoor and
outdoor parking lots and excluded street parking locations.
In Istanbul, Ispark has 76 indoor parking lots with the
capacity of 31,662 and 205 outdoor parking lots with the
capacity of 90,754. This makes a total of 122,416 parking
spots [7]. Our initial goal in phase 1 is to insert our sensors
to these 281 parking lots with 122,416 capacity.
 IV. VALUE CREATION
IoT sensors that are mounted determined where vacant
parking spaces are located. This sensor detects small
changes in the magnetic field when metal things get close to
the sensor. A routine update via wireless signal is sent to a
cloud server by the IoT sensors. The cloud server collects
data on all parking spaces. All data from the parking lot are
in real time. This data enables users to pick accessible
parking spaces via mobile app. Drivers needing a parking
space will be connected to the smart parking map in real
time and directed to the closest empty space. In the event
that the selected parking area is filled during the journey,
artificial intelligence is activated and directed to closest free
parking areas. Customers who complete their transaction
pay via the mobile app.
A. Mobile Application
Park@ mobile app guides users to suitable parking spaces. It
lists the car parks according to the selected area. Live
information about parks such as occupancy, price and
capacity are included in the application. Map information is
provided with the support of various GPS and mapping
services. Using cloud services, real-time information is
going to be shown from each parking lot where our sensors
are installed. Users can pay via the Park @ app.

The application will have the following features:

• User profile section.
• Home page has a map that displays parking lots.
• Home page shows lists of the parking lots.
• Detailed information about the parking lots
(capacity, percentage of fullness etc.).
• Search bar.
• Contact section.
• Payment section.
B. Customer Journey
There are two stages of customer journey for the user. The
first stage consists of the time frame between user opening
the app and parking their car which is shown in the Fig.1.
Then, the second stage starts when the user wants to get out
of the parking lot by scanning the QR code and finishes
when the user leaves. The second stage is shown in the
Fig.2.
V. REVENUE MODEL
A. Revenue Stream
The different sources from which a corporation receives
money from the selling of goods or the provision of services
are revenue streams. The revenue forms that a company
reports on its accounts depend on the type of activities
carried out by the company.
Operating revenues and non-operating revenues exist to
identify revenues at a high level. The sum received from the
core business activities of the organization is defined by
operating revenues. Examples of operating profits are sales
of products or services. Non-operating profits apply to the
money received from side operations of a company.
As Park@, we have a simple recipe for revenue stream.
Customers are able to pay their parking fee via our app. In
our application, we provide instant payment service with
credit card by scanning the QR code given to the customer.
We take 5% commission from these payments at the end of
each month and transfer them to Ispark, which we have
contracted with. We are constantly in exchange with our
business partners. We have large expenses especially for
marketing and public relations. As a result of our work with
our business partners, we aim to increase our recognition
and reliability in the society. In this way, our revenues will
increase. Our revenue and data flow diagram is shown in the
Fig.3.
B. Cost Structure
Executing this business model creates four different types of
costs. These are Hardware, Software, Marketing and Wages
costs. Only Hardware costs are included in the capital
expenses because it consists of the sensors that are
purchased at the initial phase. The other three costs are
operating costs.
1) Hardware
This type of cost includes the smart parking sensors that is
going to be purchased at the beginning of the project. In free
market, the smart parking sensor prices differentiate
between approximately 10-100 $ depending on the quality.
Initially, in phase 1 only indoor and outdoor parking lots of
Ispark will be used. These consist of 90,754 outdoor and
31.662 indoor free parking spaces which makes a total of
122,416 spots. Therefore, our business will need
approximately 125,000 sensors in case of backup. So, the
total hardware cost can be shown as below:
Ch = (125,000) x (Cs)
Ch: Hardware cost
Cs: Sensor cost per unit
2) Software
The software costs include three different types which are
Cloud Services, AI and App development. These are crucial
for the business to live.
a) Cloud Services: The need for cloud services for a
business is crystal clear. Storing user data is extremely
important. There are many cloud storage service providers
and the costs of them differ. For example, Google for
business offers unlimited storage plan for 120$ per user [8].
b) AI: The cost of developing an AI algorithm varies
on the factors such as project scope, complexity and other
business needs. Therefore, projecting the cost is nearly
impossible. However, AI can be developed by third party
companies as well as the company’s own human resource.
Based on the data obtained from the third party companies,
AI developing cost is approximately 100,000$ [9].
 c) App: Based on the research from the GoodFirms,
app developing cost differentiate between 40,000$ to
100,000$ worldwide depending on the complexity [10].
Also, the same research shows that app developing cost is
around 35$ per hour in Eastern European region. Since,
we must develop the app for both IOS and Android
platforms, the app cost can be calculates as below:
Ca = 2 x H x 35$
Ca: App cost
H: Total hours spent on developing
3) Marketing
Marketing is an essential aspect for businesses. In order to
gain the desired market share, companies must run
marketing campaigns. These include ATL/BTL activities,
influencer marketing, mobile marketing etc. Therefore, it
creates a certain amount of operational cost. Cost
calculation for marketing can be done by allocating an
annual budget. This can be determined by the needs of the
business.
4) Wages
The inevitable cost that occurs for a business is wages. In
order to run the business, people must be employed and get
their salary. Wages cost depends on the number of the
employees, their roles and qualities.
VI. CONCLUSION
Developing technology and more crowded cities are
effective in modernizing and improving the car parking
operation. Every passing minute increases the need for
modernization of the parking process. With IOT, AI and
Cloud services we aim to serve our customers an advanced
smart parking experience. As a technological start-up, there
are continuous and versatile data flows between our
application, our cloud service, our customers and our
sensors. In addition, artificial intelligence and navigation
services play an important role in the analysis and
evaluation of these data flows. Our bussiness partners,
customers and Ispark are involved in creating the revenue
stream. Estimations show that there is a great opportunity in
this sector and we want to be a pioneer in the new
generation car parking business. We selected Istanbul as a
starting point for decent opportunities and we aim to expand
our service field to all over the Turkey. Our research shows
that Park @ is a feasible and promising application.
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