Friday, November 30, 2012

Parking Policy Basics: time-based fees for on-street parking

Friday, November 30, 2012

Nairobi's City Hall recently decided to implement time-based parking fees.

So what, you ask? This simply means there will be a per-hour fee to replace the current one-off payments of Sh140 (about US$1.60) for on-street parking and Sh200 for off-street. The new proposal for Kenya's largest city is roughly Sh30 per hour in busy areas, such as the CBD*.

What is so special about that? Why would it be worth a blog post? 

One reason is a lack of literature explaining the issue. Almost none of the resources on parking management tackle it (pointers to exceptions gratefully accepted). Maybe most assume it is too obvious to even mention.

So this post aims to fill a gap by spelling out the need for time-based on-street parking fees.  Or more precisely, it spells out the importance of having the ability to charge based on a SHORT time period, such as per minute or per hour, rather than per-day.

I know of several countries where a one-time fee to park all day is still the norm for on-street parking, even in the busiest of city-centre shopping streets. We saw the Nairobi example above. And I saw this in Dhaka in Bangladesh during the Parking Policy in Asian Cities study. Do you know of other places with non-time-based on-street parking prices?

Let's look at Indonesia as an example.  

Charging for on-street parking is widespread in Indonesia, which is a good start. But the lack of time-based fees is a big problem, which has become obvious to me through some work on parking in two Indonesian cities recently.

The fee for 15 minutes of on-street parking is the same as for 8 hours (generally a tiny fee of Rp2000 - about 20 US cents)! No surprise then that parking attendants often plead for a larger tip from long-stay motorists. Sometimes successfully, sometimes not. A lack of time-based fees is a huge barrier to getting better on-street parking management in Indonesia.

Why is charging for on-street parking based on the time used so much better than charging a flat fee regardless of the length of the stay?

Here are a few important reasons.   Can you add to my list?

  • Non-time-based fees are unfair: 
    It is obviously unfair that 15 minutes of parking and 8 hours of parking have the same price!
  • Non-time-based fees prevent price increases by making them politically intolerable: 
    Politically, there is a limit to how expensive we can make short-time parking. Unless there are time-based fees, this places a low upper limit on the price for all durations. For example, Nairobi's existing one-off fee is quite hefty if you only want to stay 20 minutes. Indeed, it faced fierce opposition to a proposal last year to raise the fee to Sh300 (about US$3.50);
  • Non-time-based fees undermine the demand management value of price rises:
    Conversely, for a whole day of parking even Nairobi's proposed higher fee is still rather modest for convenient on-street parking. So the point here is that any politically conceivable non-time-based price will be cheap for long-duration parking. Such prices provide little or no TDM nudge to motorists;
  • Non-time-based fees encourage long duration parking:
    It follows, obviously, that per-parking-event fees encourage parking for long periods. Even a small number of people parking all day can easily fill most of the spaces on a street. But for many busy streets, especially shopping areas, we really want to encourage SHORT parking durations not long ones. 
  • Non-time-based fees would make performance pricing perform poorly:
    The three previous points all suggest that a demand-based approach (performance pricing) to parking prices will have disappointing results if you only have non-time-based fees. The City of Bogor in Indonesia may be in the process of discovering this
  • Non-time-based fees constrain parking management options: The ability to use various more complicated pricing schemes as tools for parking management is lost if per-event parking fees are the only option.

It really is very important to get time-based fees, especially for on-street parking.

But I keep hearing that time-based fees are too difficult or even impossible for Indonesian cities.

And if you saw my earlier post about problems with the on-street parking pricing system in Indonesian cities (gangsters!) then you will have some sympathy about the difficulties of parking reform in that country. Time-based fees are common for off-street parking in Indonesia. That's easy to implement. On-street is not so easy in the Indonesian context.

Yet, several African cities manage to have time-based fees on-street. They include Kampala in Uganda, Dar-es-Salaam in Tanzania and Abuja in Nigeria.

I am pretty sure Indonesian cities can too but how they might achieve such a reform is a question for another day.

Please share your insights!  Do you know of attempts to reform such fees to make them time based? How did it go? Any lessons for other cities?


*  Actually Nairobi's proposed price per hour changes depending on the length of your stay. But that is a side-issue that I don't want to distract from the main focus of the post.
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