Luxe backs out
Valet parking service app finds Boston streets too expensive to navigate
LUXE VALET, the San Francisco-based technology company that looks to solve urban parking problems, is pulling out of Boston after a mere six months of parking people’s cars.
In an email to subscribers over the weekend, the company said it will cease operations in Boston on January 1, though it continues to operate in six other cities around the country. It had also been operating in Philadelphia but it is not identified on the list of remaining cities, indicating they have ceased operations there as well.
“While we’ve loved serving you, today we’ve made the tough decision to pause operations in Boston effective January 1, 2016,” the email states. “We are making this decision as part of our efforts to streamline our operations.”
While company officials vow the suspension is temporary, they give no date for a return on the service.
The service started in San Francisco in 2014 with about $5 million in seed money and the quickly expanded into seven other cities where parking is a nightmare, including Chicago, New York, and Los Angeles, and this year raised another $20 million in investment capital.
Drivers download the app on their smartphones and then can request a valet to meet them at a location. The drivers don’t have to punch in a time because the app allows the blue-shirted valet to track the vehicle and be in the location when it arrives. The valet, an hourly employee who travels the streets by scooter, skateboard, or foot, takes the vehicle to a garage the company leases space from and returns it when requested.
The rates vary by city but average $5 to $7 an hour to a maximum of $25 to $35. In Boston, the average cost was $5 an hour with a $25 maximum, a bargain in a city where parking is scarce and can cost as much as $40 or more for three hours in prime areas. But in Boston, the service was limited to downtown, the North End, Beacon Hill, Back Bay, the Financial District, and part of the Seaport, all areas that are congested in the rush hours and can make it tough for valets to quickly drive to and from the garages in the areas outside those neighborhoods.
Last month, CommonWealth took a look at Luxe’s Boston operation, raising questions about how the service could survive and make a profit in one of the most difficult cities to navigate for parking and traveling. Those questions have been answered, at least for now.Earlier this month, USA Today named the company one of its 10 finalists for Small Business Innovator of the Year award, which will be announced soon.
The company’s “success has already given rise to competitors such as Carbon and Zirx, but Luxe’s first-mover advantage and presence across the country should bode well for its chances to stay king of the market,” says the story which ran prior to this weekend’s announcement.