Seven Principles of Effective Municipal Parking Management for the 21st Century

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Seven Principles of Effective Municipal Parking Management for the 21st Century

Since 1935, municipal parking management has been generally organized around a legacy of time-rationing policy, equipment and enforcement methods.
While this is starting to change to everyone’s advantage, traffic management, safety, accessibility and turnover remain as critically important and indispensible now, as they were then. These should never be compromised.
Managers use many meters, frequent micro-fees and rationed time slots, backed by an expensive enforcement apparatus, to ensure occupancy turnover. Unfortunately, there remains a body of misunderstandings, attitudes and assumed social entitlements on the part of a portion of the driving public, such that some parkers view the parking authority as would a truant teenager view a stern high-school principal.
 A zero-sum conflict engaged by this minority over parking payments keeps the collection system expensive, managers busy, and transaction pain high. This also diminishes retained revenues that many cities need.
How else can we achieve the desired accessibility and turnover while maintaining management revenue and making enforcement activity less frustrating for all parties? Can we make paying for parking as simple and painless as paying for a cellphone call?

Taken together, here are seven principles of municipal parking management that we have learned over the past decade. These can lead to a lessened state of parker frustration and anxiety, greater retained revenue, and reduced traffic congestion and pollution due to cruising for parking. It also will lead to an “all-digital ecosystem” for parking payment and enforcement.

1. Manage by price. Use market-demand pricing, rather than citations, to maintain turnover that’s needed for shared access to downtown business, shopping and entertainment. This can include variable pricing by time and location demand, or progressive pricing by duration of stay to discourage long on-street stays.
The Albany (NY) Parking Authority (APA) provides an example of an approach that is highly service-oriented. It has deployed multi-space meters that use a gradually increasing rate structure that permits payment for parking for up to 10 hours – effectively, all day. Parkers average about a 2-hour stay, hence turnover is effective. As well, revenue is up, enforcement expense is down, and customers are happier. A small portion of parkers stays longer than before, providing new revenue to replace the drop in citation revenue.1
For municipalities that switch from time-rationed parking limits to progressive parking pricing, there is much less need for a parker to be cited for a meter violation. Progressive pricing can have positive side benefits for the municipality: improved turnaround behavior, more parkers shifting to off-street parking, reduced enforcement expense, and increased net revenue.

2. End cruising. A second aspect of managing by price is to use prices to keep a few spots open for newly arriving vehicles. It is good practice to set the base rate (hopefully, for a progressive system) at a level that leaves, on average, a spot open on each block face – i.e., about 15% vacancy.
You will likely find analytics to be useful for that.
Los Angeles and San Francisco each used a similar analytic approach to arrive at prices that varied sub-area to sub-area over three or four time-bands each day. This was done so that each location and time-band was price-optimized for the demand behavior in that sub-area at that time.
Managing by price both raises and lowers prices from place to place or among time-bands. On average, we might expect prices to rise slightly, but remember that while every driver likes free parking, drivers desire freedom to park even more.2
Making parking friendlier (more spaces available, more convenient, freedom from citations, easier to find, etc.) makes shopping and visiting in town more pleasant, even when priced for demand.
If you are managing demand by price rather than citation, then too few parking spots will tend to push prices upward, meaning lowered affordability and accessibility. Conversely, too many spots will mean low prices, attracting too much traffic or ensuring that revenue goals are not met.
If an anemic parking supply is priced to curtail cruising, then this may put pressure on businesses to relocate. If availability or price is a problem, it may be useful to add or remove some parking to achieve the required balance. The worse thing to do is to charge below-market value for too-few spots, as this engenders cruising, congestion and pollution, as has been clearly shown by Donald Shoup, an Urban Planning Professor at UCLA.

3. Reduce citations. It’s true that a small proportion of drivers intentionally evade payment, but these are in the minority. There are many other reasons for underpayment, including the high cost of the transaction itself. The cost in time, finding change, using a credit card, determining the amount of time needed – even using a smartphone – can still mean a high transaction cost if you are someone who needs to park 12-16 times a day. There are many ways to reduce “payment friction,” including accepting credit cards, smartcards, and pay-by-phone.
Progressive pricing can bring a dramatic reduction in citations, while retaining the same revenue, if necessary. Pay-by-license plate means another reduction in the cost of transaction by making a return trip to the car unnecessary and enabling top-up by smartphone.
The ultimate, of course, is to completely automate payment, making it impossible to avoid, forget or make an error. (We’ll return to this in “Reduce equipment” segment immediately below.)
Perceptions about citations are mixed and problematic. Here we are concerned only with the expired meter, a citation we can dramatically reduce with a shift in policy and payment collection.
Most cities, in the civic interest of a well-functioning municipality, would prefer a parking management program with a high compliance rate and a low citation rate. Many drivers perceive parking tickets as unfair, a petty nuisance or a “tax-grab,” and these perceptions contribute to the social conflict between parkers and enforcement personnel.
Furthermore, as a funding source, meter violation citations are naturally limited. They are expensive to distribute and collect, and if increased, tend to encourage parkers to pay the requested fee or leave before the time expires.3
Replacing time limits with progressive fees, such as the Albany parking agency did, removes a considerable portion of the citations a city would issue (Denver describes the expired meter as “our most popular ticket”).
In addition to preserving (or increasing) revenue and lowering enforcement expense, reducing this type of citation lessens the social perception of unfairness and pettiness and presumably the social standing of parking enforcement.
There is no reason to assume a threat to enforcement staff jobs; there are many other forms of parking violations. Philadelphia, for example, lists 66 of them in addition to expired meter. Indeed, there is every reason for parking enforcement to continue to focus on violators who obstruct traffic, cause safety issues or are scofflaws. Most parkers appreciate safe, unobstructed streets and dislike when other parkers can avoid following the same rules that they respect.

4. Reduce equipment. At the end of the 20th century, the multi-space pay-and-display meter began to replace single-space meters at the rate of about 7 or 8 to 1. More recently, “pay-by-ID technology” – especially pay-by-license plate – has started to change this ratio to about 12 to 1 for on-street applications and much higher for off-street.
More important, we are starting to move the payment meter into the vehicle and into “the cloud.”
Pay-by-phone disrupts the sidewalk-meter paradigm, allowing us to commence a migration through “asset-lite” parking management and finally to all digital parking management that relies entirely on in-vehicle metering, digital credentials and high-speed license plate-based enforcement.
Cloud-connected, self-paying, in-vehicle systems are coming on-stream this year, and are targeted at those who park on-street multiple times per day, as well as any parker who would prefer the convenience of not dealing with transacting a small charge each time they park. Any system that serves a user’s needs while minimizing the demand on user attention will be far more successful.4
Expect to transition among several technologies; many cities already use three or four. It is common now to see in one city multi-space meters and single-head meters –even brand new ones that take credit cards.
Increasingly, pay-by-phone is taking transactions away from curbside meters. Now, new digital credential methods, such as pay-by-license plate make payment even easier, since you do not need to return to your vehicle.
For example, Brandy Stanley, Las Vegas Parking Services Manager), permits firms downtown to post a sign on multi-space meters inviting parkers to bring their spot number to the lobby for complimentary payment of the fee. In Toronto, there is a restaurant with a similar sign and a parker can provide their plate number at the door to get complimentary pay-by-license plate parking with dinner.
The goal here is not only to reduce payment friction and increase compliance, but also to migrate to less curbside equipment and more digital, personal equipment.
While reducing capital expense for the parking operator, it also reduces vandalism, theft, maintenance and obsolescence. Multi-space meters might have a 10-year life cycle, the smartphone closer to two.
Digital, personal equipment that is network-connected means that data for analytics are far more effectively available. Such data can be fed real-time into pricing algorithms of the sort that were used by LA Express Park and SFpark (more below), far outperforming manual collection as was previously used in academic studies.

5. Increase compliance. Excluding the minority of parkers who will always try to evade payment, there are many simple and relatively innocent reasons for underpayment. These are well-known.
A significant reason in many larger cities is that the transaction costs for commercial drivers can be higher than the cost of paying or fighting citations. When a commercial operator parks for less than 15 minutes some 15 or 20 times a day, it can be more efficient to simply accept a couple of citations per vehicle each day and settle several hundred of them at once on behalf of a fleet. That is a very expensive way for a city to gather revenue for managing traffic and parking.
Increasing compliance is the flipside of reducing citations. Compliance can be made easier in many ways. Pay-by-phone is one; a self-pay meter is another. If you can arrange for 90% to 95% of parkers to be payment compliant, then you can isolate the 5% to 10% of parkers who intentionally evade payment.
If it’s easy to be 100% compliant, what does that indicate about handling the few who are not?
Focus on scofflaws. By reducing payment friction, it is easier to sort parkers who intend to pay from those who do not. Reducing enforcement costs does not mean enforcement staff has a diminished job market.
As Michael Klein, Executive Director of the Albany Parking Authority, puts it: “Increased payments for services rendered replace ticket revenue, and higher compliance at meters allows enforcement staff to focus on other needs, such as safety infractions.” A win-win.

6. Move to “the cloud.” All the digital payment technologies favored in these “Seven Principles” pay-by-license plate, pay-by-phone, self-pay meter – move encrypted digital credentials over the air in real-time for payment settlement and enforcement by license plate recognition.
What distinguishes an all-digital system is that the parking credential can move from system to system instantaneously: from the parking meter – whether pay-by-license plate, pay-by-phone or self-pay meter – to a parking enforcement database, to a payment accounting database, to a traffic database determining network congestion, to an optimization system determining where enforcement is needed most, to an analytics database determining where prices are too high or too low, and so on.
Moving to the cloud takes the brakes off of your ability to more nimbly manage inventory, analytics, prices and enforcement.

7. Use Analytics. In order to manage by price, parking fees must be sensitive to local conditions such as time, location, space availability season or events. Additionally, prices intended to manage turnover are set to address occupancy targets: 85% is a popular target intended to leave a space open per block face, on average.
Hence, managing by price does not imply raising prices. Prices go down as well as up, as in any market. This was clearly the case for both LA Express Park and SFpark. At the same time, drivers need certainty and clarity to make driving decisions, so prices cannot change hourly or daily.
Los Angeles and San Francisco found a smart solution, changing prices up or down in small increments ($0.25 or $0.50) to achieve 85% occupancy and changing them only once each month or two, until pricing settled into an optimal 85% distribution, as set forth by Professor Shoup.

Bern Grush is VP of Innovation for Applied Telemetrics Inc., developer of PayBySky, a self-paying extension to existing municipal payment collection systems. Contact him at
bgrush@paybysky.com.

1Klein, M., To Market, To Market. The Professional Parker. international Parking Institute. May 2013. Pg.26
2Glendale Downtown Mobility Study, 2007. Pg.5-13,14
3Grush, B., Reduce, rethink, reform. Thinking Highways. Vol. 8.4. North America. Pg.54
4Ebling, M., The Road Ahead: Diverse and Digital. IEEE Pervasive Computing, January-March 2014. Pg.5.

 

Article contributed by:
Bern Grush
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