Parking Fees are About More than Just Revenue Collection

A recent article from the Star-Phoenix revealed that downtown Saskatoon workers have found a glitch in the automated parking payment system which allows them to park without having to pay. The reporter covering the story observed 10 people over the course of an hour exploiting the loophole on a single block. A senior transportation official from the city acknowledged that the city has known about the problem for five years, but hasn't done anything about it since the cost of fixing the glitch will be more than the revenue lost. The parking card system generates roughly $350,000 for the city, and fixing the glitch would cost about $40,000.

While it is unclear whether fixing the glitch will pay for itself in the short term, since we don't actually know how many people are evading parking fees, the greater cost to other drivers needs to be considered. After all, charging for parking is about more than just paying to build and maintain stalls. There are two other crucial functions.

First, pricing parking is about properly rationing spaces so that people can get them where and when they need them. If parking is free, then many people will simply park all day without giving it a second thought. While many of these people may need to park all day anyway, they might have otherwise parked in a lower priced stall in a parking lot, for instance, rather than taking up valuable curb side parking. In the case of people who are simply making a trip downtown to run an errand, they might decide to park for an hour instead of a half hour. This can also adversely affect retail stores since the longer a customer (or non-customer) occupies one stall, the less other customers can use that stall. The effect may seem small, but even a few dozen people downtown taking advantage of the system can make it hard for other people to get the parking they need.

The second reason for pricing parking is to reduce traffic congestion. This may seem farfetched, but studies have shown a strong correlation between free parking and traffic congestion. The reason is simple. When parking is free, people park longer than necessary. Since this means that spots are more difficult to come by, people spend more time driving around looking for an empty stall. Sixteen studies in eleven cities ranging from from New Haven, Connecticut, to New York City, between 1927 and 2001, have shown that on average it takes 8 minutes to find a parking space in the central business district (CBD) during peak times. An average of 30 percent of drivers in the CBD at any given time are cruising for parking. Parking guru Donald Shoup estimates that each free downtown parking spot causes an extra 1825 miles of driving per year—more than half the distance across the United States.

While downtown parking in Saskatoon may not have become scarce enough for free parking to cause major gridlock, it will become a major issue as the city grows. And now that the cat is out of the bag, more people will try to take advantage of the loophole. Despite the upfront cost, the city needs to make fixing the glitch a priority. Continuing to allow people to game the system will re-enforce the notion that parking is free. That is the wrong message to send a growing city with worsening traffic congestion. Only by adequately pricing parking can the city ensure that people get parking when and where they need it.