“The last year, year and a half, has been absolutely in hyperspeed,” Pirnejad said. “Local governments have had to adapt. They’ve had to take on hybrid (work), and then remote, and now we’re going back to hybrid. It’s amazing that we’ve been able to pivot so quickly, and as they say in local government, ‘Never waste a crisis.’ So here we are, and we’re starting to reopen. We’re starting to see an opportunity here. Assets that we never thought were assets are now becoming something that we can actually use as a platform. The curb has become a platform of sorts for cities.”
Three key areas emerged in the discussion as government and industry leaders look ahead: changing technology, an uncertain revenue stream for governments, and the need for tech companies to adapt their offerings to new business models that favor bite-size purchases of modular goods and services, not sprawling, enterprise-level commitments.
McKee cited the rise of autonomous vehicles (AVs), electric vehicles (EVs), autonomous ride-sharing and delivery services as presenting “a whole host of challenges for us, whether that’s the amount of … deliveries coming to our curbs, whether it’s Uber or Lyft or these other ride-share technologies. … Those things are going to increase the pressure on our curbsides in our cities.”
The shifts during the pandemic — whether temporary with remote work, or longer-term with a hybrid workforce — are also creating financial pressure on local governments.
Said Pirnejad: “We don’t know in local government whether people are going to come back to the office or whether they’re going to stay at home, or there’s going to be a hybrid. … In my world, we’re grappling with this right now. We’re deciding how is it that we’re going to develop a hybrid workforce, hybrid engagement, hybrid interaction and customer satisfaction.”
Fiscal concerns are key, Pirnejad noted.
“There’s an enormous amount of revenue associated with parking, and if AVs show up and nobody needs to park, what happens to that revenue? What happens to that curbside? What happens to that asset? So we’re very fortunate that companies in the gov tech space and thought leaders in gov tech are starting to think about the curbside as an asset — how do we manage that and what do we do with it in the autonomous future? Big, big conversations and there’s going to be a lot of projecting what the future looks like, and it’s a great place to be.
“Everything about EVs — for example, how gas tax is collected, and the gas tax is what fuels local governments’ ability to repave roads and keep local infrastructure going. Parking fees is what a lot of cities use to help pay for the continued maintenance and operations. So even the local economy that’s based on people commuting to and from work, and going to work and having lunches and outings, is going to change. We’re seeing a lot of things pivot under our feet.
“We’re seeing that there’s an opportunity to unlock the assets that we never thought were a profit center. You’re seeing now that curbs can be that hidden potential. Maybe there’s power in AI to unlock some potential to maybe even use buses or other public modes of transportation to collect information and do valuable things with that.”
He added: “Funding has been so uncertain for local governments. The bottom fell out from under us. Our TOT (transient occupant tax) dropped out. Literally everybody stopped traveling and the hotels went empty overnight, and we saw (TOT revenue) plummet. It was like 10 percent of what it would normally be. Sales tax plummeted. Storefronts closing. You had all kinds of user fees and recreation fees fall out from under you. … So with that, from Foster City’s perspective, we really had to do some belt-tightening. … The pandemic accelerated this need for agencies to have a clear financial picture and vision for where they stand.”
Some governments — such as the state of California — wound up better off financially than they were before the pandemic shut everything down last spring.
“It’s not all about the bad,” Price noted. “It’s about the uncertainty.” Some governments saw revenue drop; but others ended up over budgeted revenue.
“The uncertainty is the new normal,” Price said. “That’s increasing the need for forecasting and bringing long-term forecasting to the mainstream. So instead of going with your one-year (government) budget and seeing where you’re going to be next year, where are you going to be five years from now, where are you going to be 10 years from now?”
Pirnejad said he has seen in recent years more technology that “can stand alone, can add value, but doesn’t necessarily need to integrate with other technologies.”
“You don’t have to get into this complicated integration piece, which can cause so much more confusion and so much more complexity than it’s worth,” he said. “It’s so nice to be able to work with vendors that can immediately come in, add value, and improve your quality of work — both from the (perspective of) the resident receiving the service as well as the staff that’s actually implementing it.”
To that end, he urged tech companies to continue focusing on subscription services — cloud compute and storage, software as a service and other a la carte purchases that are interoperable and don’t require expensive multi-year commitments from local governments.
He also offered a hat tip to the tech industry: “I can speak from local government’s perspective: We’re in a debt of gratitude to our technology partners that have been able to innovate in this uncertain space and have been able to quickly assemble products and solutions that deal with these problems head-on.”
