Outside Ideas: Dynamic Curbside Pricing


Congestion pricing failed to gain approval in New York, but other cities are quietly pushing forward with plans to bring innovation to a more prosaic but no less important part of the transportation puzzle: parking.

The struggle to find a good parking space in a city is so commonplace as to have become a cliché. But really what it represents is a market failure. Parking spots, like roads, are an odd sort of beast: the supply is fixed, but the demand fluctuates greatly by day and by hour.

For most goods, pricing aligns supply with demand. But the price for parking is inflexible. Most spots are free. Others are metered at an artificially low rate. Residential permit parking creates odd local monopolies. Private lots skim those willing to pay the most.

The traditional solution is to increase the number of spots, providing yet another subsidy to drivers and pushing yet another cost onto everybody else. More importantly, fiddling with supply doesn't really work any more so than building an extra lane on a highway relieves congestion. Oversupply of parking encourages driving. Undersupply creates a lottery system, in which people circle endlessly looking for a spot or choose to park illegally. In either case, the result is more congestion, more carbon emissions, and less livable cities.

The key to solving the puzzle, as Alex notes, is information. And for consumers, that information must ultimately be embodied in price. Which is what makes San Francisco's $23 million experiment in dynamic curbside pricing so intriguing. According to streetsblog:

The underlying premise of SFpark is that the city wants to reduce driving, and will not attempt to do so by building more parking. Nor does the city want to suffer from parking shortages, manifested as double parking and congestion caused by cruising for spots. Instead, SFpark will raise meter prices so that demand is reduced to equal the existing parking supply. During peak periods, meters will be priced high enough to ensure some parking is always available. During off-peak times, meter prices will go down, so that most spots are used. The idea is that if you really have to drive, you shouldn't have to cruise around or risk a ticket. Along with an easier time finding parking during peaks, and lower prices when and where there is lower demand, other carrots for motorists include easing time limits during periods of low demand, enabling payment by cell phone, and delivering text messages to drivers when their meters are running out.

The "smart-meter" program will encompass 6,435 spots--roughly one quarter of San Francisco's curbside parking. The pilot program will undergo one year of trials and adjustment, before being considered for rollout to the entire city.

Others will be watching closely. Although congestion pricing is dead (for now) in New York, the city is charging ahead with its plan to replace all the old-style parking meters with more intelligent Muni meters by summer of 2009. Although the smart meters are presently programmed to behave a lot like the old, dumb meters, the groundwork for dynamic pricing is quietly being laid. As with congestion pricing, it's only a matter of time before someone flips the switch.

Editor's note: San Francisco has taken several other progressive steps toward parking reform this year, including the Market and Octavia Neighborhood Plan, approved in April, which eliminated parking requirements in several city neighborhoods (read more from Livable City). This policy is one to watch for Seattle, where minimum parking requirements maintain a standard of car-centric development.

Adam Stein is a co-founder of TerraPass. He writes on issues related to carbon, climate change, policy, and conservation.

Photo by Flickr/Thomas Hawk, licensed by Creative Commons.