Every driver loves free parking. After all, who would not want the convenience of leaving their car in a parking space for hours without pay?
However, urbanization experts are increasingly advocating against free parking. Economist Donald Shoup, for instance, has avidly campaigned for dynamic pricing schemes that charge for parking depending on demand as alternatives to free parking allocations. His ideas have influenced several U.S. cities to experiment with variable, market-set pricing schemes.
Although discouraging free parking is seemingly going against the public’s interest, giving the model some thought reveals significant loopholes.
Free parking is not truly free
Many drivers do not just want free parking. They feel entitled to it. If you asked a driver why they demand to park for free, there is a good chance they will compare parking lots to roads, which are ostensibly free public commodities.
However, roads have mechanisms in place that ensure their costs are met. For example, all motorists must pay a gas tax every time they fuel their cars, and at least part of these funds go into infrastructure maintenance. While the gas tax system is not perfect, it still reflects the idea that roads are not free.
Similarly, parking spots with no meter may seem free, but they also have costs attached. Somebody must pay for the land and pavement, as well as security, cleaning, and other parking-related services. For government parking lots, these costs are met by tax dollars, which means even people that are too poor to own cars pay for parking. Estimates place the annual cost of on-street parking at $1,750 for building and $400 for maintenance per slot.
Privately owned facilities that offer free parking, such as apartment buildings and shopping complexes, also have to meet parking costs in one way or the other. Eventually, these expenses are passed along to consumers through pricier rent and costlier items.
Free parking keeps people driving for longer
Naturally, drivers will always search for free parking slots before settling on a paid space. However, because parking is generally scarce in today’s highly populated urban centers, hunting for an open spot often involves a lot of cruising.
More cars on the road translate to more traffic congestion and carbon emissions. A study conducted in Los Angeles revealed that cars travel almost a million miles a year in a 15-block area just looking for parking.
Besides increasing the number of vehicles searching for parking, free parking also encourages more people to drive. Studies show that motorists living in areas where parking is cheap or free are less likely to leave their cars at home and use public transit. By offering free space, parking service providers incentivize people to drive more frequently.
Free parking wastes valuable urban land
Whichever way you look at it, a free parking space, particularly one above ground, sits on an underutilized piece of land. Providing free parking increases the number of motorists on the road, which raises the demand for parking and causes the creation of more spaces.
As a result, cities end up using a lot of land for parking instead of revenue-generating businesses. According to a recent study, Hartford relinquishes up to $1,200 in annual tax revenue per parking space, translating to a total loss of $50 million.
Dynamic pricing is a better option for parking
As an alternative to free parking, dynamic pricing entails setting the parking price based on the number of people that use the lot every day. According to Shoup, the ideal price is the lowest price a parking provider can charge and still have one free space per block at any given time. Therefore, people pay as little as possible without creating the cruising problem.
If you are in the parking business, this model might sound challenging to implement. Fortunately, you can implement your variable pricing system easily with the right technology. Using pavement sensors and a software solution like Pavemint, you can continuously monitor your space occupancy and vary your pricing accordingly.
That way, you can contribute to better traffic flow, air quality, and land utilization in your city while providing parking spaces whose costs are only met by their users.