In what possible way is the app you describe a good thing?
In the non-app scenario, a person finds a space, parks in it for however long, then leaves and somebody else can use it.
In the app scenario, the person with the space now has a perverse incentive to hold it for longer (not necessarily much longer; but they don't get paid if they don't wait until another user of the app shows up to take the space, so likely effect is nonzero) and the app producer is extracting 25 cents in rent for producing a less efficient allocation of a resource owned by the people of the city.
Clever, sure; but a total dick move.
At least it's better than this 'auction' flavor, since the payoff is fixed and relatively low(thus ensuring that actively hunting and holding-hostage parking spaces is unlikely to be worth the time), while the auction arrangement could well end up reaching amounts where it becomes economic to 'squat' spaces purely for sale(and, indeed, the company hired some people to do exactly that for promotional purposes), in addition to encouraging app-users to delay leaving by effectively paying them to stall until another app-user shows up.
If one takes a positive view of demand-based pricing for goods like parking spaces, the price should be very much higher than it is; but the benefit(of better space availability) only results because the price is unrelated to the presence or absence of someone waiting in the space. There is absolutely no incentive to stay in a space a moment longer than you need it(indeed, if you pay per unit time, you want to leave as soon as you are finished, rather than being paid to tarry).
If one takes the view that 'demand based pricing' is the polite way of saying "If enough people can't afford it, won't it be so much more pleasant for the ones who can?" the distaste for a system that is both inefficient and prices some people out of public space, all for the benefit of a random absentee rent-seeker should approach being self evident.
I'm going to file this particular act of the dead hand of state oppression as "a pleasantly sensible exercise of state power in the common good, and the 'innovators' can shove it."