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"Performance-Based Parking Pricing" - Don't Yawn! It could be the next big thing.

[Update: Looking for more parking policy information?  
Try Reinventing Parking.]

If the topic of parking pricing makes you yawn then think again! This is a hot topic in urban transport policy at the moment.

Lately, I have been asking students and training groups these questions about on-street parking:

What is the right price of kerbside parking in a busy shopping street in a city? And how can we tell when we have the wrong price?

I have tried this with three groups so far. With a little prodding they agreed that (if pricing is to be the main mechanism to encourage turnover):
The price is too low if there are no empty spots, so most motorists take a long time to find a vacant parking place. The price is just right if there are just enough vacancies so that most people can find a park very quickly (zero search time). And the price is obviously too high if a large number of vacancies can be seen.

They were actually working out for themselves (with a little guidance) the principles of 'performance-based parking pricing'. This innovation has been emerging recently at the urging of UCLA Professor, Donald Shoup.

I am beginning to think that it has huge potential to improve busy city streets everywhere, including Asian cities.

Here is an excerpt from a Shoup article on this in Planetizen:
We can call this balance between demand and supply the Goldilocks principle of performance-based parking prices: the price is too high if many spaces are vacant, and too low if no spaces are vacant. When a few vacant spaces are available everywhere, the prices are just right. If prices are adjusted to yield one or two vacant spaces in every block (about 85 percent occupancy), everyone will see that curb parking is readily available. In addition, no one can say that performance-based parking prices will drive customers away if most curb spaces are occupied all the time.

Image source: Donald Shoup (2006) The High Cost of Free Parking (APA)

This last point is crucial. This objection appears EVERY TIME anyone proposes increasing the price of parking near businesses. It emerges too when performance-based parking is discussed. For example, New York's Columbus Avenue Business Improvement District is considering trying it out. and a Chamber of Commerce spokesperson has already raised fears that customers will go elsewhere. But that makes no sense. If the price is right, there will be high turnover of parked vehicles. No one can say people are no longer coming to the area. In fact, likely more can come because they can now find a space to park and the cycling, pedestrian and bus conditions will also improve by getting rid of all the cruising for parking.

More from Shoup's item on Planetizen:

Prices that produce an occupancy rate of about 85 percent can be called performance-based for three reasons. First, curb parking will perform efficiently. Most spaces will be occupied, but drivers will always be able to find a vacant space. Second, the transportation system will perform efficiently. Cruising for curb parking will not congest traffic, waste fuel, and pollute the air. Third, the economy will perform efficiently. The price of parking will be higher when demand is higher, and this higher price will encourage rapid parking turnover. Drivers will park, buy something, and leave quickly so that other drivers can use the spaces. For parking, transportation, and economic efficiency, cities should set prices to yield about an 85 percent occupancy rate.

New York's StreetFilms has produced a great 5 minute on-line video to illustrate these ideas.

So far, the best known (and very successful) implementation of this has been in the downtown of the City of Redwood, which is in the San Francisco Bay area.

Now the City of San Francisco is planning the largest trial yet of performance-based parking pricing, under its SFPark pilot project.

Here is an excerpt from a recent SFGate article on the planned pilot:

The program does nothing to expand the parking supply. San Francisco's long-entrenched policy calls for reducing reliance on the private automobile.
As SFpark is envisioned, parking rates would be adjusted based on time of day, day of week and duration of stay. People would be able to pay not just with coins, but with credit cards, prepaid debit cards and even by cell phone. If a meter is set to expire, a text message could be sent to the driver. More time could be purchased remotely.
People also would be able to check parking availability before arriving at their destination via the Internet, handheld devices such as BlackBerrys, or cell phone. Sensors would be embedded in the asphalt to keep track of when a parking spot is empty.
The technology isn't new, but San Francisco would be the first American city to apply it on such a broad scale. That's one reason federal transportation authorities took an interest and decided to help pay for the experiment.
"The idea is to give people more choice, more convenience and to reduce congestion," said Mayor Gavin Newsom.
Under the program, which will focus on 10 neighborhoods, the city will adjust hourly parking rates based on demand - the price will go up when spaces are scarce and go down when plenty are available.

These ideas seem to me to be highly relevant to parking-scarce Asian cities. The idea does not just have to apply to on-street parking. It could also be used for off-street parking that is owned by local governments.

Does anyone know of any attempts to price parking in this way anywhere in the Asia Pacific region?


  1. HI -- I was directed to your blog by Dr. Shoup. Very timely for me.

    I would like to discuss some matters with you off line -- but can't find an email link. Please contact me at You can view my blog at and click on blog.

    John Van Horn
    Editor and Publisher


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