A new iPhone app has created a marketplace for public parking, connecting those vacating a space with those searching for one — for a fee.

Parking Auction launched earlier this week on Manhattan’s Upper West Side. The match-making service is beta-testing, and the folks behind it hope will expand worldwide, creating communities of relaxed, smartphone-armed parkers.

“If I’m parked on the street and wouldn’t mind moving my car to a spot half a mile away that isn’t residential, I may be happy to give it up to my neighbor that just got home from East Hampton on a Sunday night with two kids in a car she has to unload,” said founder Brian Rosetti. “We think that’s quite a neighborly and valuable service.”

To be clear, the spaces themselves aren’t for sale, nor is the right to park in it. Drivers are told they must vacate the space if another driver signals they’d like to park there, thereby voiding the transaction. What’s actually for sale information — the knowledge that a space will be opening up soon. If someone else gets the space before you do, you’re out of luck but you don’t have to pay.

“Both buyers and sellers confirm the space transfer has taken place, and then rates the other, so if the seller leaves before the buyer gets there and someone else pulls into the spot then they will lose the sale,” Rosetti said. “There’s never any interaction between drivers and all confrontation must be avoided.”

It’s like following the guy with the keys in his hand, but for a fee.

It’s also a lot like Streetline, a service tied into city-owned meters in San Francisco that tells drivers in real time when spaces are available. Although Streetline doesn’t require money to change hands, Rosetti thinks his scrappy approach works better.

“We don’t see their solution as viable,” he said of Streetline. “Our solution is the only one with a market mechanism for allocating a scarce resource.”

Call it an extreme example of dynamic pricing.

While services like Streetline eventually may allow drivers to reserve spaces, Parking Auction hopes to distinguish itself by letting drivers know a space is about to open before it is vacated. Drivers leaving a space can watch how far away you are and time their departure. Eventually, Rosetti hopes to partner with garages to offer guaranteed, reserved spots, much like Parking In Motion.

Currently, beta users get 50 “Parking Auction Credits” to use for buying and selling spots, but Rosetti estimates that drivers will be willing to pay between $3 and $20 to find out that a space is opening up. The company’s site doesn’t indicate whether Parking Auction will be getting a commission on those future sales.

Photo: canonsnapper/Flickr. Screenshots: Parking Auction