Cape Town parking costs stifle business

by Nic Haralambous on 12/05/2011

As an entrepreneur and business owner it’s imperative for me to grow my business. To grow my business I need staff and in South Africa that generally implies that staff drive to work and park somewhere.

I’m going to cut right through the warm and lovely smelling bread that is Cape Town municipal governance. Everyone loves them, they do a great job and have maintained a high standard. I must, however, protest.

I have worked out that when Motribe reaches ten staff members, our new offices on Bree Street in Cape Town CBD will force me to pay a parking cost of more than R10 000 for my staff. Yes. You read that correctly, more than R10 000 for my staff to park at their place of work and earn a living.

Let me explain that cost:

It costs R4.50 per 30 minutes to park on the street in CT CBD. That’s R9 per hour. At an average of 8 hours per day that equates to R72 per day per employee.
5 days a week for 4 weeks = 20 days per month that I will have to pay for parking.

20 days x R72 = R1440 per month per employee.
10 employees x R1440 = R14 400.

R14 440 is more on parking than I will pay for rent. That is a joke.

The alternative involves me sourcing parking spaces for my employees. These range from R850 to R1000 per space per month. So at a best case scenario I’m paying R8500 per month for ten employees to park in a parking lot a few blocks away from my office.

Let me sum up my feelings: I am being punished by the Cape Town government for growing my business. I am upset by this and I am not the only person who runs a business in Cape Town who feels this way.

I have a proposed solution that makes sense in my head, help me break it and come up with a better one.

I propose that businesses with fewer than, let’s say, ten employees are given a parking-break of 75%. Give me and my employees 75% off our street parking near our office.

That would be a saving of R10 800 per month for a business of ten people. Instead of paying R14 400 I would be paying R3600.

As the size of my business increases you can start to charge me more and lean on my business as I generate more revenue. When the business grows to 20 employees then give me 50% off, 25 employees and 25% off and above 30 employees make me pay full price and force me to move out to a building with parking. But don’t punish me when I’m just starting out. It hurts.

For the city of Cape Town this is a good idea because Motribe will be bringing a steady and stable flow of paying parking customers to the streets. Even if we are paying %25 of the cost we are there every day and those parking spots are filled and generating more income.

Over and above this little perk for the city they should consider that small businesses are good for business. The restaurants in and around my office will now have ten more customers, as a company we are creating employment, paying our rates on time and helping the city to do better in general.

Parking costs are making it very difficult for me to want to grow my business and stay in the hub of activity commonly known as a city’s CBD.

I hope someone is listening.

nharalambous@gmail.com

There are 3 comments in this article:

  1. 12/05/2011Hans says:

    Hey Nic,

    Interesting logic, however remember the private parking bays are also owned by individuals/companies with the intention of growing revenues and driving sustainable businesses. Its a catch 22 situation.

    My suggestion would be to buy a mini van, hire a driver and have your staff collected and dropped off. . That will save you a few Rands and give your business an asset at the same time ;-)

  2. 12/05/2011Nic says:

    Hey Hans, that’s a fair point I suppose but that only deals with one part of my problem – the private parking lots. I do, however, have a response – there is a parking lot at a shopping center that makes over R600 000 per day on weekends on parking alone. Even if the parking lot propert and construction cost R60 000 000 that is paid off in 100 days. On weekdays that same parking lot makes R300 000 per day in the weeks. They are not struggling for cash.

    Even if they are trying to make as much money as possible we’re still left with the city of Cape Town charging me.

  3. 31/05/2011Gareth says:

    Hey Nic,

    Parking will forever be an issue for us in Cape Town.

    You make a great suggestion, but the only problem is that there is little incentive to grow your business because you want to make the most of the parking situation… If anything the city will turn your proposition around and say that the more employees you get the more discount you can obtain (in this situation they will not keep the discount given proportional).

    Nonetheless, I wish there was a solution. 5 years ago I heard that they wanted to increase the number of bays three-fold… So much for that.

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