Why Robots, Not Human Politicians, Should Set Parking Prices

When human politicians try to set parking prices, the debates end up being about what’s politically popular or “fair” vs. money for unrelated stuff. This gets the issue all wrong. Parking rates need to be about supply and demand. What is the price that will keep a couple curb spots open on each block all the time? You almost never hear politicians discuss parking prices in these terms. Here is an example from Easton Patch of the wrong way to think about parking prices:

Councilman Roger Ruggles worried the changes were unfair to some downtown Easton visitors. He argued that the new hours would penalize people who came downtown to eat from 6 p.m. to 8 p.m., but not those who visited from 8 p.m. onward.

“By that theory, unless we charge 24 hours a day, we’re being unfair to someone,” countered Councilwoman Elinor Warner.

Councilwoman Warner seems to think this is a knock-down argument against keeping the meters running 24 hours, but actually it is a knock-down argument in favor of that.

The 6pm cutoff is arbitrary, but that’s an argument for basing the prices on some other factor besides time – like the occupancy rate.

Whether or not to charge for curb parking shouldn’t be about politics, it should be about whether or not there is a crowded parking situation. Whenever it’s busy, you should charge. You should charge when there’s a busy afternoon crowd, and a busy bar crowd, and a busy church crowd. Whenever demand management is required, then the right tool is parking prices.

This is a case for replacing political control of parking prices with an algorithm. With electronic meters, Council could task an algorithm with maintaining an 85% vacancy rate at all time. The political issue would be occupancy, not prices, and the price would change depending on how busy it is in order to maintain that occupancy rate.

The meters would be on 24 hours a day, but during the night and early morning when vacant spaces are plentiful, parking would still end up being free. Once the curb occupancy rate started to tick up though as it got later in the morning, the prices would adjust to keep 1 or 2 spaces open on each block.

This is the only truly fair way to set prices. There’s no such thing as too high or too low prices, because the algorithm’s price is always going to be relative to how busy it is.

Comments

  1. Publius says:

    Totally agree with your analysis here. I think the biggest conceptual problem is that people have come to expect cheap parking to be an entitlement from the government. It is not. There is no reason that government should be involved in the process, beyond setting occupancy rates, when the market can efficiently set the price.

  2. Jack Contado says:

    This is sweet, you two agreeing on something Walter Williams or Federich Hayek might come up with.
    I’m curious, if the pure market place is perfect for fairly and efficiently allocating parking spaces, tell me why isn’t it generally good for allocating other scarce resources….health care, for example.

    • Jon Geeting says:

      The short answer is that free markets are a means, not an end in themselves. Sometimes they are the best tool for achieving the outcome you want, and sometimes they aren’t. You need to decide that on an issue-by-issue basis. In the case of parking, rationing by williness to pay is better than rationing by tolerance for circling around in frustration. In health care, a free market would be barbaric.

      The long answer is that no decent human being would be ok with rationing access to medical care by ability to pay. A free market for medical care would require that hospitals let people who can’t pay go untreated. You won’t get the most hard core Republican politician to endorse that policy, so we force hospitals to treat everyone regardless of ability to pay. Once we’ve gone down that dark Socialist road of not letting people die on the hospital doorstep, the only issue is how do we want to pay for the free health care we’ve committed to providing. The least expensive option is to just have the government tax everybody and use the money to pay for everyone’s medical care. But Americans are weirdly resistant to that option because taxes, so we end up with this shitty fragmented insurance market that costs double what other countries pay and delivers worse health outcomes.

    • Publius says:

      What Jon said, lol.

      To put it a little shorter–healthcare is special because it involves a product that must be paid for out of a moral obligation. The current, ad hoc, employer-based, insurance system is an extremely inefficient way to try to fund that moral obligation. It needed reform, because like most capital systems, it will not reform itself when it can externalize costs beyond its own system.

      Also, much of what Jon proposes on this blog is free-market oriented. Particularly when it comes to zoning.

  3. Jack Contado says:

    and who decides when the market is he appropriate? The “best and brightest”? eg, the Government?

    • Jon Geeting says:

      People have different political views about what set of trade-offs is better or worse. There’s no right or wrong answer, only better or worse. It depends on what outcome you prefer.

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