Balancing Profit and Sustainability: How Municipal Parking Firms Shape Urban Mobility

The study reveals that Swedish municipally owned parking companies are emerging as key players in promoting shared and active mobility but remain constrained by profit pressures and legal limits. Their hybrid public–private nature enables innovation yet hinders bold action to dismantle car-dependent urban systems.

A study by Göran Smith and Steven Sarasini, from the RISE Research Institutes of Sweden and the Institute of Transport and Logistics Studies at the University of Sydney Business School, investigates how municipal enterprises can drive sustainable urban transformation. Focusing on three Swedish parking companies, Stockholm Parking, Gothenburg Parking, and Malmö Parking, it explores how these publicly owned firms navigate the delicate balance between public service and profit-making as cities push to replace private car use with shared and active mobility.

Bridging the Public–Private Divide

Municipally owned companies occupy a hybrid space. They are publicly controlled yet operate under market rules, aiming to deliver efficient services while advancing social goals. Despite their growing influence across Europe, their role in sustainability transitions remains underexplored. Smith and Sarasini identify two research gaps: first, the tendency to treat governments as monolithic actors, and second, a bias in transition studies toward innovation rather than the dismantling of outdated systems. Their framework combines six “intervention points” for system change, ranging from stimulating niches to destabilizing regimes, with three “action spaces” that define what an organization can, perceives it can, and chooses to do.

From Car Parks to Mobility Hubs

Sweden’s three largest cities provided fertile ground for the study. Each has ambitious climate goals, extensive parking infrastructure, and political pressure to reduce car dependency. Through analysis of 26 policy documents and twelve interviews, the researchers found that municipal parking companies are evolving from car park operators to active agents of urban mobility transitions. Stockholm Parking integrates cycling, car-sharing, and public transport in new developments; Gothenburg Parking combines parking and ticketing in its digital app; Malmö Parking rebrands its garages as “mobility houses” that include car-sharing, bicycle storage, gyms, and community spaces. These companies are reshaping the physical and conceptual meaning of parking, turning static car spaces into multimodal urban nodes that connect different transport options.

The Tensions of Hybrid Governance

While municipal parking firms enjoy flexibility, resources, and technical know-how, they operate under conflicting institutional logics. Their market logic demands profitability, while their political logic requires alignment with municipal sustainability goals. Executives described their organizations as agile experimenters but also as financially dependent on car parking revenues. “We earn money on parking, not mobility services,” admitted one Malmö executive, capturing the paradox. Swedish municipal law further restricts innovation; companies cannot operate outside city borders or set prices freely, limiting the potential for scaling up sustainable mobility. As a result, while these firms are crucial enablers of shared and active transport, their ability to challenge the car-dominated regime that sustains their income remains limited.

The companies’ roles, therefore, cluster around promotion, partnership, and enabling. They collaborate with mobility providers, retrofit parking garages for shared vehicles, and support city efforts to reduce on-street parking. Yet, they rarely engage in the more politically charged task of destabilizing automobility through actions like drastically cutting parking supply or raising prices. The study finds that even municipally owned firms display an “innovation bias”: they are comfortable supporting new niches but hesitant to undermine profitable incumbents.

Extending Urban Transformative Capacity

Smith and Sarasini argue that municipally owned companies significantly enhance the transformative capacity of local governments by bridging the gap between policy ambition and operational reality. Their semi-autonomous, experimental nature allows them to test and scale innovations that bureaucracies or private actors might avoid. However, to harness this potential fully, municipalities must mitigate financial risks, for instance, by easing dividend requirements or compensating for revenue losses tied to sustainability projects. Without such support, these companies will remain cautious innovators rather than bold reformers.

The authors conclude that municipal corporations are indispensable instruments of sustainability transitions but are constrained by the same economic logics that perpetuate the regimes they aim to transform. Their hybrid status makes them both powerful and vulnerable: capable of piloting the future but tethered to the past. Future research, they suggest, should examine how corporatization affects municipal policy coherence and how governance frameworks can better integrate public enterprises as key actors in managing both innovation and decline. Ultimately, the study portrays municipal parking companies as agents of cautious transformation, proving that sustainable cities will require not only new mobility systems but also new institutional architectures that free public enterprises from the very structures they must help to change.