San Luis Obispo needs to reevaluate its parking rates
February 8, 2024
OPINION by JOE BENSON
San Luis Obispo has an opportunity to put the traditional archaic approach to parking in the rear view mirror and shift gears by adopting a new approach that will result in a more efficient, pleasant parking experience for our community. Advancements in technology have paved the way for a far better approach to parking.
Traditional fixed-rate parking fees and static pricing models have proven to be ineffective, as they do not reflect the realities of supply and demand. A better approach lies in embracing innovation; specifically, demand-driven pricing. Smart sensors, data analytics, and mobile apps have made the implementation of demand-driven pricing possible with relatively minimal costs and allow drivers to access real-time information about parking availability and pricing, making it easier to make informed decisions.
With the correct implementation and proper change management (I’m not talking about coins), the City of SLO can implement this forward thinking approach to parking with minimal cost and disruption.
Demand driven pricing is the future
Demand driven pricing is a pricing strategy where rates are adjusted in real-time based on a set of factors like actual demand (or lack thereof), time of day, and special events. Instead of having fixed parking rates no matter how underutilized or over utilized parking inventory may be, demand-driven pricing allows for flexible prices that change up or down according to the current supply and demand conditions.
When demand is high, such as during busy hours or special events, the parking rates are raised to reflect that increased demand. Conversely, when demand is low, the rates are lowered to attract customers and fill available parking spaces. For reference, demand-driven pricing has already been implemented in some form in San Francisco, Seattle, Pittsburgh, Los Angeles, Washington DC, Austin, and Boston.
Enabling the success of our business community
Demand-driven pricing adapts to the real-time demand for parking, ensuring that prices align with the actual real time need for parking spaces. This not only maximizes the use of existing infrastructure, but more importantly, enables increased revenue for our downtown businesses by incentivizing people to come downtown during slower periods.
By charging higher prices during peak demand periods and lower prices during off-peak periods, businesses will see a net increase in sales and the city will see an increase in revenues from both parking fees and sales tax. These additional dollars can be reinvested back into our city to ensure it remains the special place we all love.
The current fixed-rate parking fee approach results in inefficient use of available spots because it does not account for the variations in demand for those spots. For example, the volume of vehicles and the resulting demand for a spot to park on a chilly Tuesday morning in January is far less than a pleasant Thursday night in May when everybody wants to be downtown. The current fixed rate approach does not consider that reality, and charges the same price in both conditions.
Setting the maximum price (the ceiling) and the minimum price (the floor) will be critical to success, and proper analysis will be needed to ensure both are set correctly. To be clear, the ceiling should be no higher than is charged under a fixed rate plan and the floor could be as low as $0 during certain off-peak periods.
Everybody wins with demand-driven pricing
San Luis Obispo is soliciting public input for its parking rate study on Feb. 13 and 14, and I encourage everyone to participate. If you agree with the idea outlined above, great. If you have a better idea, also great!
Either way, the current fixed rate approach is outdated and not serving the community properly. Demand-driven pricing is an empowering solution leveraging technology to address the challenges posed by our ever increasing population and continued dependence on automobiles. By optimizing parking space utilization, reducing traffic congestion, encouraging sustainable transportation choices, and maximizing revenues for our business community, demand-driven pricing is the best approach.
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