Getting the (parking and riding) prices right

Getting the prices right where they aren't (usually because of some misguided policy) is always a good idea. The trouble is that there are few good examples to point to.

UCLA's Don Shoup has been pointing to mispriced parking for years -- and has gone to the trouble of calculating and demonstrating its costs. He can also identify some success stories. Shoup and co-authors Jeffrey Brown and Daniel Baldwin Hess won the American Collegiate Schools of Planning's Chester Rapkin Award for best article ("Fare-Free Public Transit at Universities") for 2004.

Writing about their work in the Summer 2005 Journal of Planning Education and Research, the authors report that:

"Our evaluation of the fare-free public transit program at UCLA found that bus ridership for commuting to campus increased by 56 percent during the first year and by a further 27 percent during the second year; more than one thousand former solo drivers who shifted to transit gave up their campus parking spaces. These results show that paying the fare for a bus ride to campus is far cheaper than building a parking space on campus -- UCLA's most recent parking structure cost $47 million, or $31,500 per space. Avoiding the expense of new parking spaces is thus a major benefit of fare-free public transit. Unlimited Access [the name of the program] programs allow universities to satisfy ther transportation demand with a smaller parking supply, and at a much lower cost.

"Fare-free piblic transit is even more effective when combined with parking reforms. Most universities now sell parking permits by the month, semester or year, and this arrangement distorts prices; drivers pay an up-front cost for the permit and a zero marginal cost for parking on each trip. This arrangement increases the demand for parking once drivers have bought their permkits. The zero marginal cost of parking invites permit holders to drive to campus alone, encourages excessive use of scarce spaces during peak hours, and leads to shortages that generate demands for more campus parking.

"In contrast, some universities charge a marginal cost for parking but no fixed cost. The University of Oregon and the University of Wisconsin use in-vehicle meters (which resemeble debit cards) to pay for parking. Drivers use these in-vehicle parking meters to pay by the minute. They pay for parking on every trip, and they pay only for the exact time they use -- no more, no less. This arrangement gives everyone an incentive to consider the alternatives to solo driving for every trip, because they can always save on parking by carfpooling, riding transit, bicycling, or walking.

"Pay-as-you park-pricing for drivers and unlimited Unlimted Access to transit riders changes the price of travel in two important ways. First, replacing parking permits with in-vehicle meters shifts the price of parking to a marginal cost with no fixed cost, and this reduces solo driving. Second, Unlimited Access shifts the price of riding the bus to a fixed cost with no marginal cost, and this increases transit ridership. Thes two price reforms will together have a much greater impact on travel behavior than will either one acting alone because in combination they will turn transportation prices upside down."