Dubai entrepreneur prepares to unleash ‘Airbnb for parking’
Finding a parking spot in the UAE can be a real squeeze – but for one resident, this also represents a big gap in the market.
Craig McDonald, 26, moved to Dubai as a young child, before the construction boom that created areas such as Jumeirah Beach Residence (JBR) rising from the sand.
“You could just park wherever you wanted, on a patch of sand, and no one would really bat an eyelid,” says the British expat, recalling his childhood in the emirate 20 years ago.
Overcrowding in some of the more densely populated areas of Dubai means that parking has now become “a nightmare”, says Mr McDonald. But in every problem there lies an opportunity – and it is one the young entrepreneur has seized.
Mr McDonald is a co-founder of Yalla Parking, a website that allows people to list unused parking spaces for others to rent. He describes it as a kind of “Airbnb for parking”.
The idea came to him when he was studying at university in his native Scotland, living in a part of Glasgow where parking is “a bit of a free-for-all”. When Mr McDonald returned to Dubai to live with his parents, in the same villa in which he grew up, he noticed many of his friends were complaining about parking in high-rise districts. Married couples or those sharing apartments may have two or more cars, but only one allocated parking spot, he says.
He launched Yalla Parking with co-founder Harrison Jones after he was made redundant from a corporate finance job in December.
Yalla Parking intends to take a cut when someone rents a parking space – although the exact commission rate is yet to be decided. The website is still in a “soft-launch” phase, with only a handful of spaces listed in Dubai – although users can list spaces in Dubai and Abu Dhabi – and no online payments system in place yet. But Mr McDonald said there is a queue of about 30 people waiting to list once the website has been fully tried and tested.
Current listings include parking spaces in Downtown Dubai and JBR, with monthly rental rates of between Dh250 and Dh500. The going rate for a car parking space is typically 5 to 10 per cent of the average monthly rental price of nearby one-bedroom flats, Mr McDonald says.
“We are seeing some early users listing parking spaces and others requesting spaces in various parts of Dubai, so hopefully can do our first deal by the end of next week,” says Mr McDonald.
Yalla Parking, like more established online marketplaces, faces some key challenges if its business is to accelerate.
One is the question of what permissions are required before parking spaces can be rented out. Mr McDonald says his consultations with lawyers and property agents suggest that tenants are allowed to rent out parking spaces if they obtain their landlord’s permission first.
“Once you accept our terms and conditions, we assume you have permission from your landlord to list your space,” he says.
Mr McDonald says Yalla Parking has not had any problems with master developers yet. Some car parks in Dubai require an electronic access pass for entry and Yalla Parking says it will handle the delivery of these to people renting spaces, who would have to leave a deposit.
But legal experts say the permissions required to rent out parking spaces could be an issue.
Adrian King, a senior real estate lawyer at Norton Rose Fulbright in Dubai says that permission might be required from both the property landlord and master developer or owners’ association for some communities.
“Granting permission for third parties to use car parking spaces is likely to be problematic for many developments in the UAE due to such developments – and therefore many of the available parking spaces – being within master communities,” he says.
Developers including Emaar and Damac did not respond to The National’s requests for comment.
Despite potential hurdles, Dino Wilkinson, the technology partner at Norton Rose Fulbright in Abu Dhabi, says Yalla Parking meets one of the key criteria for a start-up.
“In busy cities like Dubai and Abu Dhabi, space is at a premium and car parking can be challenging. From that perspective, the idea behind Yalla Parking seems to meet one of the early rules for any start-up – it solves an existing problem,” he says.
Mr McDonald has big plans for Yalla Parking. While the web service is self-funded, on a “bootstrap budget”, he says that when the idea is validated he may try to seek funding and also formally register it as a business. A Yalla Parking smartphone application is also in development.
“This could be a daily used app for parking,” he says. “It’s a huge problem here that we think we can be the answer to.”
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Updated: March 13, 2016 04:00 AM