Dynamic pricing: fluctuating parking meter prices

While this blog has discussed alternative parking solutions before, none has been as far-reaching as Los Angeles' new plan for demand-driven parking meter fees.

The L.A. City Council last week approved a pilot program that hopes to turn the city's current parking meter system on its head. Currently, meter rates are set according to geographic limits - meaning that a meter on one corner can charge $4 for parking, while a meter on a nearby street charges only $3.

To compete for cheaper spaces, drivers will often double park, circle around the block numerous times, and otherwise obstruct the flow of traffic through busy parts of town.

The new system, called ExpressPark, will be implemented in a 4.5-square-mile zone of Los Angeles, and will use sensors to measure demand for parking at roughly 6,000 sidewalk meters and an additional 7,500 public parking spaces.

The meter prices will vary in accordance with fluctuations in demand for parking throughout the day.

ExpressPark, which officials hope to launch next month and put in place by next April, is receiving $15 million in funding from federal grants and $3.5 from the City of Los Angeles.

Dynamic pricing, as the variable meter fees are called, works because drivers will adhere to the "Goldilocks principal," UCLA professor Donald Shoup told the Los Angeles Times.

Excessively low prices will cause drivers to waste time driving around the block and holding up traffic, or cause them to go elsewhere. Meters where prices are too high will stay empty, and "the stores lose customers and employees lose jobs and the city loses tax revenue," Shoup said.

The idea, though likely to be more expensive than traditional parking, might be a worthwhile long-term investment for city governments looking to maximize parking meter revenue and minimize parking-related congestion.

What do you think? Is this a realistic way to make parking more efficient, or little more than a costly experiment?

Photo: Flickr/Jeff Kramer

via [Los Angeles Times, AutoblogGreen]

This post was originally published on Smartplanet.com