Item - 2024.PA11.6

The Board of Directors of the Toronto Parking Authority:

1. Approved a two (2) year extension with an additional one (1) year option at the sole discretion of the Toronto Parking Authority of the Payment Services Agreement with Passport Parking Inc. in accordance with Toronto Parking Authority Policy 5-7.

2. Directed that Confidential Attachment 1 to the report (October 4, 2024) from the President, Toronto Parking Authority remain confidential in its entirety at the discretion of the City Solicitor, as it contains a position, plan, procedure, criteria or instruction to be applied to any negotiations carried on or to be carried on by or on behalf of a local board.

The purpose of this paper is to seek approval from the Toronto Parking Authority (TPA) Board of Directors to extend the Payment Services Agreement with Passport Parking Inc. (Passport) for an additional two (2) years with an additional one (1) year option at the sole discretion of the Toronto Parking Authority, beyond its current expiration on March 31, 2025.

As background, Passport operates the Toronto Parking Authority's Green P Parking App. The Green P App is a custom-developed mobile payment solution that has evolved significantly over the past nine (9) years and is designed to support the needs of the Toronto Parking Authority and its customers. Passport was chosen through a public procurement process in 2013, and the App has since become integral to the success of our parking operations. Launched in 2015 for off-street ungated parking and expanded to include all on-street locations in 2016, the Green P App has emerged as one (1) of North America's premiere digital parking solutions serving over 2.2 million registered customers representing 79 percent of on-street and 74 percent of off-street parking transactions. Customer satisfaction remains strong; 4.6 rating on the App Store based on 13 thousand reviews.

Since 2023, Management has accelerated the development and modernization of our digital payment platform in support of our strategic growth plan. Specifically, the Toronto Parking Authority released an updated version of the Green P App in 2022 which has driven an 11 percent increase in App utilization and grown the total user base by almost 70 percent from 1.3 to 2.2 million users in just two (2) years.

Concurrently, the Toronto Parking Authority has embarked upon four (4) critical initiatives designed to future-proof our business. First, we are expanding the reach of the Green P App to our entire parking portfolio which will simplify our customer payment experience City-wide, lessen our dependence on capital-intensive off-street parking infrastructure while driving cost productivity.

Second, we are in the prototyping phase of integrating customer payments for EV charging into our Green P App to simplify payments and provide greater flexibility to offer bundled pricing options for our consumer segments. Market-wide deployment is scheduled for 2025.

Third, work has begun to build the back-end technology necessary to provide a more interactive App experience for our customers. For example, we will be adding real-time information on EV charging availability by location; moreover, integrating both on and off-street parking sensors with the App to provide customers with real-time parking choices. This work will be complete by 2025.

Lastly, Management has two (2) major streams of work on the horizon that are technology centric. First, we will be developing an App based Loyalty programme that will support our Parking, EV Charging, and Bike Share operations. Secondly, we will leverage our enhanced digital platforms to integrate the Bike Share and Green P App into a single integrated mobility payments solution for all our customers. This work is targeted to be deployed by Q1, 2027.

Management has assessed the value of securing a new App provider through a risk lens. Our assessment is that co-creating a new App application with a new vendor would take anywhere between 12 to 18 months and require disproportionate management time and resources to ensure a seamless integration. In addition, contemplating a vendor change while simultaneously executing management's planned digital transformations currently underway would be daunting. Lastly, the financial and reputational risk associated with any diminution in the performance of the Green P App during the transition exceeds our current risk tolerance.

In conclusion, Management recommends that the Toronto Parking Authority extend the Payment Services Agreement with Passport for a further two (2) years with one (1) option year at the Toronto Parking Authority's sole discretion. This recommendation provides performance stability for our customers, staff, and enterprise. It protects our strong Green P brand proposition in the marketplace and ensures that our ambitious digital transformation unfolds as planned over the next 30 months. This recommendation is compliant with Toronto Parking Authority Policy 5-7, which allows for continued partnership with the original supplier when switching providers would result in significant inconvenience or excessive costs.