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Wednesday, November 3, 2010

Calcutta's on-street parking "extortion rackets"

When the "parking meters" are human beings, they actually notice for themselves when the parking is saturated. As you might expect, this makes raising prices rather tempting. Indeed, something like this is happening in the streets of India's large cities.

If you are a Shoupista, then it sounds perfect to adjust prices when the parking is full.  Shoupistas are supporters of Prof Donald Shoup's parking policy ideas, which include performance-pricing for on-street parking spaces.

There is just one problem. Raising the prices is against the law.

Here is a current example from Calcutta (Kolkata) in India, as reported in The Telegraph (Calcutta) newspaper. The outcomes are far from perfect. (Note that currently US$1 = Rs 44 or so):
Extortion rackets thrive in broad daylight across the city in the name of car parking. The rackets — run by cooperatives issued licences by the civic body, in collusion with police and local goons — force car owners to shell out exorbitant sums...
Metro visited three such parking zones where owners have to pay between Rs 20 and Rs 50 per hour for parking their cars. The hourly rates fixed by the Calcutta Municipal Corporation are Rs 7 for cars and Rs 3 for motorcycles.
There are more details in the rather breathless report.

Sadly, the nasty side-effects here certainly outweigh any benefits from 'rational pricing'.
  • The 'human parking meters' (employees of the cooperatives with contracts to run the parking) have become criminals. 
  • The report alleges that the local police have also been corrupted and even count cars in order to estimate their cut. 
  • Presumably the agency overseeing the parking contracts has also been compromised by graft. 
  • Since these extra parking payments have no legal sanction, only some not-so-subtle intimidation persuades motorists to pay. There is potential for real nastiness that would make the Parking Wars TV show look tame. 
  • Finally, most of the money paid is rewarding crime rather than helping to pay for much-needed services.  

These are not good outcomes!  

The journalist seems to see think better enforcement is the answer. Good luck with that when all the incentives point towards the corrupt outcome that he so vividly reports.

Maybe a better way would be to reduce the temptation to corruptly raise prices? But how?

Tuesday, November 2, 2010

The opportunity cost of parking illustrated

What a wonderful example to highlight the opportunity cost of parking space!

This photograph from my trip to Guangzhou last year just popped up on my screensaver and I couldn't resist blogging it quickly. 

Almost ANY space that we now devote to parking could be used for something else (either full-time or part-time as may be the case in this photo). 

This shot was taken at the edge of one of Guangzhou's 'urban villages'. This one near the Guangzhou BRT line is built up at incredibly high densities with 5 to 10 storey buildings (like those on the left) packed tightly together in a maze of narrow alleyways. I think mainly migrant workers from the countryside live here.

Car ownership is very low so here we see people putting the planned parking area to better uses. I assume both the pool games and the childrens' bouncy game involve some kind of payment per use. I suspect that the parking here doesn't. 

It makes you think.  Can we organize parking policy so that we only devote space to parking when it really is the most valuable use? How can we make parking compete with the other possible uses of the space?