Using your iPhone to auction off a street parking space might sound tech-savvy.
In San Francisco, though, it's little more than an illegal racket.
That's the assessment of City Attorney Dennis Herrera, who sent a cease-and-desist letter Monday to MonkeyParking, threatening the tech startup with a lawsuit unless it shuts down operations in San Francisco by July 11.
Herrera contends MonkeyParking and two other similar parking startups also facing legal action have built business models entirely premised on illegal transactions - selling access to part of a public street. One of the companies, ParkModo, is even hiring people at $13 an hour to occupy parking spaces in the trendy Mission District during the peak evening hours this week and then sell the spots as a way of promoting the company's smartphone app.
The parking dispute is just the latest clash between the fast-moving tech industry and laws that some digerati view as anachronistic or unfair. San Francisco is a crucible of that friction, with the taxi industry opposing ride services like Uber and Lyft, housing advocates clashing with vacation rental companies like Airbnb, and activists protesting tech firms using public bus stops for corporate shuttles.
"Technology has given rise to many laudable innovations in how we live and work," Herrera said in a statement. "MonkeyParking is not one of them."
The app, which drivers use to auction off a space starting at $5, with default options up to $20, can also be seen as exacerbating San Francisco's fast-growing divide between rich and poor by making some parking only available to those who can afford it.
It was even criticized by other software developers trying to apply tech solutions to parking.
"Companies should look to help solve urban living issues through technology, instead of taking advantage of public property or city residents," said Ashley Cummings, co-founder of Carmanation, a San Francisco startup that matches drivers with owners of private parking spaces.
ParkModo founder Daniel Shifrin, though, blasted Herrera's crackdown as a constitutional overreach, saying ParkModo's business model was based on the legal exchange of information for money.
"That's how our economy runs," Shifrin said. "The last time I looked at the Constitution of the United States, there is nothing about that you can't exchange information with someone else unless you're exchanging state secrets or trading inside information. So I don't know what he's talking about."
MonkeyParking's CEO, Paolo Dobrowolny, declined to comment, saying he was in discussions with legal counsel.
He told The Chronicle in May that his company was just a facilitator between those looking for parking spots and those who need some incentive to leave a space.
"We're just providing information when someone is leaving," he said when MonkeyParking rolled out in San Francisco. "That is valuable information for everybody."
Anybody can do it
Dobrowolny had disputed that the app would cut out those unable to pay up to $20 each time they need to step out of their car.
"It's a fair business for anybody," Dobrowolny said. "It's not just for rich people. If you think you can get that money back when you leave that parking spot, you can earn back the money when you leave the spot."
MonkeyParking, currently only available for Apple mobile devices, allows parked drivers to list their location and a minimum dollar amount for their space. Drivers searching for a space can use the app to bid on one nearby.
Herrera denounced the app as creating "a predatory private market for public parking spaces." He asked Apple to remove MonkeyParking from its App Store, saying it violated the store's guidelines for apps to comply with local law. Apps can also be rejected if they may result in physical harm.
MonkeyParking "encourages drivers to use their mobile devices unsafely - to engage in online bidding wars while driving," Herrera said. "People are free to rent out their own private driveways and garage spaces should they choose to do so. But we will not abide businesses that hold hostage on-street public parking spots for their own private profit."
MonkeyParking and any motorist using it face fines of $300 per violation of the city's law prohibiting selling or contracting for parts of a public street, according to the city attorney. The company faces penalties of $2,500 per violation if the city sues it under the state's unfair competition law, Herrera wrote.
The two other parking-app companies that Herrera contends are violating the law, Sweetch and ParkModo, are expected to receive similar cease-and-desist letters this week.
ParkModo on Monday was not backing down from its plan to hire people to hawk spots in the Mission via its app. Shifrin said the hiring was for a one-time promotion and it was not an attempt to occupy and resell spaces long term.
Striking a balance
Regardless of how the legal tussle is resolved, more fights are on the way as the city tries to strike a balance between popular pro-consumer regulation and anticonsumer restrictions that could blow up in politicians' faces, said San Francisco political consultant Mark Mosher.
"I think we're just getting started," Mosher said. "We pretty much are the undisputed headquarters of app development. ... A lot of people love Uber and lot of people love Yelp. And a lot of people enjoy the convenience that these apps have brought to them. But there is danger. There is danger on both sides."
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