San Francisco to adopt demand-responsive pricing program for easier parking

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Following approval from the San Francisco Municipal Transportation Agency Board (SFMTA), San Francisco will become the first city in the USA to implement a ‘demand-responsive pricing’ program on its 28,000 on-street parking meters and all the agency’s metered surface parking lots.

Under the program, parking prices are incrementally raised or lowered based on the simple economic principle of supply and demand. With demand-responsive pricing, San Francisco’s hourly meter prices will go up, down, or stay the same, depending on demand, with the rate adjustments happening once every three months and have a gradual increment of 25-cents an hour. The program’s city-wide implementation follows six years of evaluation of the federally funded SFpark demand-responsive pricing pilot, which the SFMTA launched in 2011. The pricing methodology was trialed at 7,000 meters, 14 SFMTA-managed parking garages, and one SFMTA parking lot.

An evaluation of SFpark pilot found that using demand-responsive pricing resulted in:

Increased business for local businesses – Sales tax revenues rose over 35% in SFpark areas compared with less than 20% in the other parts of the city;

Lower parking rates – Average meter rates were reduced by 4% (down US$0.11/hour) in on-street pilot areas, and at city-owned garages, rates went down by 12% (down US$0.42/hour); Decreased parking search time – Reported parking search time went down by 43%; Decreased daily vehicle miles traveled – Reduced circling for parking led to a 30% decrease in miles traveled in SFpark areas, benefiting safety, easing congestion, and reducing neighborhood pollution.

Analysis of the pilot showed that during the last SFMTA rate adjustment cycle, rates in the SFpark areas did not change at 81% of the meters, because those zones met the requirements of demand-based pricing; spaces well used, but not so full that customers and visitors could not find parking. The city’s financial analysis showed that expanding the use of demand-responsive parking pricing would be revenue neutral to the SFMTA, because at most meters in San Francisco, the rates would go down or stay the same, not up. Since the SFpark pilot project started, not one parking meter has reached the citywide cap of US$8/hour, even in high-demand areas, with only a fraction (0.04%) of San Francisco parking meters reaching US$7/hour. The study ultimately revealed that when the price is too high, people do not park at the meter and visit local business, whereas if it is too low, no parking spaces are available and trade suffers.

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Tom has edited Traffic Technology International magazine and the Traffic Technology Today website since May 2014. During his time at the title he has interviewed some of the top transportation chiefs in charge of public agencies around the world as well as chairmen and CEOs of multinational transportation technology corporations. Tom's early career saw him working on some the UK's leading consumer magazine titles. He has a law degree from the London School of Economics (LSE).