Innovative Parking Pricing Demonstration Project - Phase II

Principal Investigator:

Adeel Lari, Director, Innovative Finance (SLPP), Humphrey School of Public Affairs

Co-Investigator

  • Frank Douma, Director, SLPP, Humphrey School of Public Affairs

Project Summary:

Parking pricing has taken on a role beyond recouping infrastructure investment costs and is now also being used as a public policy tool for travel demand management, such as pricing strategies that incentivize alternative mode choice. The principal goal of this research was to examine the effects on commuter mode choice of introducing flexibility and incentives into monthly parking contracts.

The demonstration consisted of running four different test modules over the course of three four-month periods. The four test modules included a discounted transit pass option (Buying Flexibility), two forms of rebate programs (Marginal Rebate and PayGo), and a free transit pass option (Disincentive Removal). The first rebate program, Marginal Rebate, offered a rebate for the difference between the marginal parking cost and transit fare on days when transit was used. The second rebate program, PayGo, offered the same transit rebate in addition to a rebate for the full marginal parking cost on days when a mode other than parking or transit was used. Analysis of the commuting behavior among participants in this study demonstrated that the level of incentive positively correlates to the propensity to shift modes, with significant and increasing mode shift occurring in the two programs that offered the greatest flexibility and incentive. However, the data also indicated that a discounted or free transit pass is not enough to entice mode change. The cost of adding additional capacity may be greater than the cost to administer an incentive program, thus justifying its implementation in parking-constrained markets. Cooperation and coordination among local governmental agencies, the transit provider, and the owners and operators of parking structures is key to implementing such a program. The potential to deploy parking contract models that include flexibility and incentives were also briefly explored.

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