The German auto giant that scored a multibillion-dollar federal incentive package to build a factory in Ontario is “nickel-and-diming” its West Coast parking app users, says one of its customers.
Yaletown-based PayByPhone Technologies Inc., acquired in 2016 by Volkswagen Group subsidiary Volkswagen Financial Services AG (VWFS), told customers May 1 that it would charge them 15 cents every time they receive a text message about their parking purchase at City of Vancouver-metered spots. The extra charge also applies in Burnaby. In White Rock and Whistler, it is 20 cents.
Dave Pasin, who owns East Vancouver cleaning products company Pink Solution Canada, said he spends approximately $30 a month on street parking via the PayByPhone app. He chalks the new 15-cent text charge up to a company that is “maximizing shareholder value while screwing over customers” during a time of high inflation.
“Do they really need to nickel-and-dime their customers for a warning alert, especially if you want to extend your parking?” Pasin said. “I mean, I understand it's a service, but you really need to spend another 15 cents?”
Carmen Donnell, managing director for PayByPhone in North America, said app users receive a text confirmation when they start a parking session and a text reminder that their parking session is about to expire. The notification charge aligns with other regions in which the company operates, such as Germany, Italy and Switzerland, she said.
Donnell emphasized the service is optional. Users can change their account settings to stop the texts and avoid the additional charges.
“The benefit for parkers of being reminded of when their parking session is about to expire is helping them to avoid costly citations should they not move their car,” Donnell said. “This is a great reassurance to the parker, since the cost of the citation far outweighs the cost of the reminder [text message].”
Vancouver parking meters are in effect seven days a week from 9 a.m. to 10 p.m. Spots downtown can cost as much as $9 an hour during daytime, according to VanMap. A parking violation ticket costs $77, discounted by 40 per cent if paid within two weeks.
Alina Cheng, the city’s parking manager, said city hall learned of the additional fee at the end of January, but the contract with PayByPhone allows it to charge no more than 15 cents per message.
"App users may opt out of receiving receipts and reminders via SMS (text message) and choose to receive them via email or app notification instead, both of which remain free,” Cheng said, suggesting setting an alarm on a phone or watch as another alternative. “Drivers may also pay for parking with coins or credit cards at pay stations and meters.”
City of Vancouver paid PayByPhone $2.31 million in 2022, according to the latest statement of financial information.
VWFS bought PayByPhone, founded in 2000, in December 2016 from PayPoint PLC. At the time, T-Net reported the deal was worth $43.8 million. In 2021, the company said it processed more than 125 million transactions totalling USD$550 million.
PayByPhone Technologies Inc. is one of the 105 VWFS subsidiaries listed in a 2022 annual report, along with PayByPhone companies in Italy, U.K., France, Switzerland and the U.S.
The VWFS financial report included $66.459 million of equity in the Vancouver company, which lost $40.898 million in 2021. Overall, VWFS reported a before-tax profit of more than €3 billion (euros) last year, or more than $4.1 billion.
“We don’t comment further on financials beyond what is in the public domain,” Donnell said.
Volkswagen Group reported $406 billion revenue and a $22.6 billion after-tax profit last year. In April, the federal Liberal government promised $13 billion in subsidies for Volkswagen to build its first electric-vehicle battery plant outside Europe in St. Thomas, Ont.