LA moves to regulate 'on-demand' valet parking apps

Just as Uber and Lyft challenged the taxi business, app-based business such as ZIRX and Luxe offer roaming valet services in cities like Los Angeles at rates that can amount to savings for customers.
Just as Uber and Lyft challenged the taxi business, app-based business such as ZIRX and Luxe offer roaming valet services in cities like Los Angeles at rates that can amount to savings for customers.

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As it has with services like Uber and Airbnb, the City of Los Angeles is looking to regulate a new tech-based industry — in this case, one that could change the way we park.

On-demand valet services have been gaining in popularity. There are two that operate in Los Angeles: Luxe and ZIRX.

The companies follow the Uber and Lyft ridesharing model by pairing a service with a customer through a smartphone app, but without the overhead or relatively stationary nature of traditional valets.

And like ridesharing services, Luxe and ZIRX don't neatly fit into existing regulations set up to govern the traditional industry, leaving local governments playing catch-up in establishing rules.

The valet apps allow users to set their destination and then meet up with a roaming valet agent. The agent parks the car in one of dozens of garage spaces leased by the companies. When owners want their car back, they simply request it through the app — whenever or wherever they happen to be. Luxe also offers a drive home service for a premium price.

Despite the valet's reputation as a luxury service, the on-demand apps have emerged as an economical option, even for the not-so-rich.

"Every time I’ve used it, it’s actually been cheaper for me and it’s been far more convenient than doing traditional parking," said Justin Ma, a 27-year old, Honda-driving technology worker.

He's used Luxe and ZIRX numerous times, while attending a Clippers game at the Staples Center, a concert at the Hollywood Bowl and San Diego's Comi-Con. In all situations, he said he paid less than the cost of on-site parking and got the convenience of drop-offs and pick-ups.

Both apps charge around $15 for the service, including a full day of parking, which can be cheaper than many garages and traditional valets. And while the apps haven't gained enough customers to pose a serious threat, the traditional valet businesses worry the lack of regulations gives the app-based companies an unfair advantage.

"It's very difficult to compete in the marketplace right now," said Gustavo Garcia, a 30-year veteran of the parking business who operates KEI Parking valet stations at restaurants like Yamashiro Hollywood and Dan Tana's and at special events.

He said his company has already lost about 20 percent of its business due to ridesharing services like Uber and Lyft, leaving him struggling to comply with a myriad of city regulations and the fees required of his business.

Starting in 2014, the city began cracking down on valet operations, requiring all companies to pay several hundred dollars for permits and parking spaces in loading zones. They also are required to register their routes. Individual attendants must also pay for licenses, be fingerprinted and submit to a Live Scan background check. 

No such rules apply to on-demand valet services.

"If they want to be in this business, they should pay what we pay and they should offer what legal companies in this business offer to the customer," said Garcia.

The city is in the process of crafting a proposed ordinance to cover on-demand valet apps. It's not yet clear whether the proposal will require attendants to be fingerprinted.

While ZIRX and Luxe don't currently require agents to be fingerprinted, they do conduct third-party background checks. Both companies also carry multi-million-dollar insurance policies.

Fingerprinting and running workers through national databases during background checks have emerged as major controversies in the debate over on-demand services.

Uber and Lyft have fought attempts to impose such mandates on their drivers, saying the requirements are costly, time-consuming and a disincentive for potential drivers.