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Free Parking Gives Rise to Congestion

Parking expert Donald Shoup, whose ideas are being followed by cities around the world, believes charging the right parking fee reduces traffic

Published: Mar 11, 2011 06:29:47 AM IST
Updated: Mar 10, 2011 04:43:28 PM IST
Free Parking Gives Rise to Congestion
Image: UCLA
Donald Shoup, Professor of Urban Planning

Age: 72
Profile: Professor of Urban Planning, University of California, Los Angeles; editor, ACCESS magazine
Education: Ph.D., M.A., B.A. in Economics, Yale University; B.E. in Electrical Engineering, Yale University
Publication: The High Cost of Free Parking, Chicago; 2005
Interests: Biking, swimming 

What is the high cost of free parking?
Many countries, including the United States and certainly India, suffer from chaos associated with too many parked cars. When street parking is free, but there are no vacant spaces, many people drive around hunting for a space. This wastes valuable time and fuel. It interferes with pedestrians, congests roads and pollutes the air.

The Indian auto industry is expected to cross $100 billion in size, which is a nightmare in terms of traffic and parking. What is the solution?

Well, I don’t think it has to cause a nightmare if India manages the parking supply properly. If parking remains free on the streets, there will be a crisis. Indian cities have some of the most valuable land on earth and if it is given away free for on-street parking, you’re going to have a shortage.

Street parking is not free in major central business districts in India. Still, there is chaos. Why?
This is because supply is fixed, but demand rises and falls during the day. So should the price.   

What is the right price?
It’s the price at which there will be one or two open spaces on every block, or about an 85 percent occupancy rate, so there’s no glut of parked cars. I call it the Goldilocks principle of parking prices — not too low or too high.

What influences the price?
The density of cars. In places with high automobile density the price will be very high. In rural parts it will be zero. It’s just like rent.

Why has the private sector not solved the parking problem?
If the city is giving away free parking or if the price is too low, that’s a disincentive to build parking garages.

So, the government has a significant role?
Yes, because it owns on-street parking and is mismanaging it. It’s the city government’s responsibility to set the right prices for on-street parking. What makes the Goldilocks principle of parking prices increasingly popular in the US is that some cities dedicate the revenue they earn from on-street parking to pay for added public services on the metered streets — better lighting, cleaner and safer sidewalks.

Most car owners employ chauffeurs who circle the block. Is this a disincentive for paid parking on the street?
Most of the Nanos are not going to have chauffeurs. And having street parking that is always full (because it’s free or under-priced) is not going to help people who employ chauffeurs because of the chaos on the road. Many people in the US who can afford a chauffeur prefer to drive because they can always find a place to park. They don’t need a chauffeur to drive around the block while shopping or having lunch.

Is this why some find it challenging to drive in India?
That’s right. Studies for the past 80 years on four continents show that about 30 percent of cars that comprise traffic are cruising for parking. If you can get the right price for parking and remove these cars from the road, you’d greatly improve traffic conditions.

This calls for change in habits and mindset, right?
Exactly. People will learn that free parking is impossible to find. And parking that’s easy to find won’t be free.

(This story appears in the 25 March, 2011 issue of Forbes India. To visit our Archives, click here.)

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  • Manuj Darshan

    Architects and planners can significantly improve the parking plans. Please see http://www.bukisa.com/articles/129901_my-tumults-in-nehru-place

    on Mar 11, 2011
    • Sujata Srinivasan

      Thanks for sharing your views, Manuj Darshan. Absolutely, architects and city planners have a role in designing efficient public spaces. However, no matter how much they improve upon their designs, parking supply will always be fixed while demand fluctuates. This calls for an adjustment in the price, as with any other product.

      on Mar 24, 2011
  • Nikhil

    The suggested idea of having paid parking is definitely not a solution. There are many places which have paid parking and though the pricing is high, parking is still not available due to lack of space. Also, the solution sides with people who are readily willing to spend as opposed to people who come early. It is illogical to pay for parking as there is already a road tax being collected upon buying a vehicle. A more prudent solution would be to provide good public transport so the usage of self transport would reduce drastically.

    on Mar 11, 2011
    • Sujata Srinivasan

      Thank you for your comment Nikhil. I discussed your point with Prof. Shoup and am posting his response herewith: "Because drivers don't want to pay for parking, I can understand why they might say that it is illogical to pay for parking, and that cities should instead provide good public transport. ¯But one big problem with public transport is that buses are mired in traffic congested by drivers who are cruising for free on-street parking. The best and cheapest way to improve public transport is to charge enough for on-street parking to create one or two open parking spaces on every block, so that drivers will not have to search for parking. Even cities with superb public transport have to charge for on-street parking to avoid cruising from congesting traffic. For example, London charges £5 an hour for on-street parking in the city center because that is the price needed to create open spaces and prevent cruising. The laws of supply and demand have not been repealed for on-street parking. Only 14 percent of households in India own a car, and ownership is concentrated among the relatively rich. If Indian cities charge fair market prices for on-street parking and use the revenue to pay for local public services, never before will so many poor people receive so much public benefit paid for by so few rich people. Even drivers will benefit because market prices for on-street parking will help solve the two most difficult problems of owning a car in these cities: traffic congestion and parking shortages. India's Centre for Science and Environment has published an excellent analysis of parking problems in Indian cities. It says that, "If parking charges are adjusted to reflect the costs of providing parking in cities, the rates could be 4 to 5 times higher than the current parking rates." It's no surprise, then, that drivers might think it illogical¯ to pay for parking. Everybody wants something for nothing, but we should not promote free parking as a principle for transportation pricing and public finance." Prof. Donald Shoup

      on Mar 24, 2011