woes rooted in faulty pricing
By Donald Shoup
Recalling the late UC President Clark Kerr’s famous comment
that the chancellor’s job has come to be defined as “providing
parking for the faculty, sex for the students, and athletics for
the alumni,” Chancellor Albert Carnesale recently remarked
that campus priorities had changed.
“At UCLA,” he said, “parking is the most important
issue for everyone.” UCLA has more parking spaces than all
but one other university in the United States — Texas A&M.
How could parking have become more important than sex for students
when scarcity is obviously not the problem?
UCLA’s parking woes emerge from mispricing, not scarcity.
One particular policy, UCLA’s “point system” for
student parking, creates especially serious problems. A student’s
chance of receiving a parking permit is based on a jumble of factors,
with distance from home to campus being the chief measure of the
“need” for parking. But a study commissioned by UCLA
Transportation Services found that students frequently lie about
their addresses to get enough points for a permit. Although the
point system fails to allocate parking spaces fairly, efficiently
or ethically, perhaps it has one educational value: It trains students
to prepare income tax returns.
Instead of the flawed point system for student parking, UCLA can
use prices to manage demand: Charge the lowest price that will keep
a few spaces vacant at every location, so that drivers will always
find a convenient space near their destination. This is the Goldilocks
principle of parking prices: The price is too high if many spaces
are vacant, and too low if no spaces are vacant. When a few spaces
are vacant everywhere, the price is just right. If a parking shortage
or surplus regularly occurs at any time in any location, the price
can be increased or reduced, thereby preserving a few vacancies
during peak hours and filling spaces that would otherwise be vacant
during off-peak hours.
UCLA sells about 10,000 parking permits to students either for
the quarter or the year. Because permit-holders pay up front, and
nothing extra for parking on each trip, this practice invites them
to drive to campus alone, encourages overuse of scarce spaces during
peak hours, and leads to shortages that generate demands for even
more campus parking. Further, the permit system poorly serves students
who drive to campus only occasionally and do not stay all day.
A better alternative is to charge a marginal cost for parking, but
no fixed cost. The universities of Oregon and Wisconsin use in-vehicle
parking meters (which resemble debit cards) to pay for parking.
Drivers pay for parking on every trip, and only for the exact time
they use — no more, no less. This encourages everyone to consider
alternatives to solo driving for each trip. Why not give BruinGO
a try if it costs only 25 cents, as opposed to paying for parking
if you drive?
Flexible prices are fair, efficient and transparent, especially
when compared with UCLA’s clumsy point system for allocating
student permits. Market prices for parking will favor high-occupancy
vehicles and short-term parkers, accommodate occasional users, and
create opportunities for individual choice. Perhaps most important,
UCLA’s “point system” will no longer drive students
Shoup, a professor in the School of Public Affairs, is
the author of a recent book, “The High Cost of Free Parking.”
A longer version of this article is available at www.bol.ucla.edu/~shoup.