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Economics of Parking
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Economics of Parking

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Presentation to the Autumn British Parking Association at Birmingham

Presentation to the Autumn British Parking Association at Birmingham

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  • Having messed up the world economy you will be glad to know economists are turning their mind to parking Parking has long been over looked in economics and generally in both transport and planning in terms of evidence based research While the causes and impacts of traffic congestion are widely studied the 80% of the time that cars are spent parked are rarely touched upon I make no apology there are quite a few numbers running through this presentation – economics is all about looking at the evidence
  • Time for some audience participation This young lady has received a number of PCNs which she feels rather aggrieved about What is your immediate reaction – the choices are Job well done – our enforcement team are doing a good job Serves her right – if she didn’t understand the parking restrictions that’s her fault Money in the bank – that’s a few hundred pounds nearer to reaching our financial target Who cares – what does it matter to me Disaster – we have just aggrieved one of our regular customers So can we have a show of hands a) b) c) d) e)
  • The answer you gave probably depends on why you are in the car parking business – and it is a business that turns over several billion pounds a year The conflicting role that many parking operators have to live with leads to considerable confusion amongst both operators and more importantly your customers. And if things were not bad enough we now are waking up to the issue of climate change where parking policy has a major role to play
  • And Motorists are certainly confused – How can any business survive if the vast majority of their customers don’t understand the terms under which they are buying a product How many organisations business models are based on hoping that their customers don’t understand the rules and can be fined DfT survey results They are out to get me syndrome is alive and well
  • 5 paragraphs to explain parking charges – as bad as a mobile phone tariff
  • And with signs like these it is not surprising that people think “parking organisations are out to get me”
  • For local authorities a key problem arises from the pressure they are under to prioritise competing demands for parking space Key pressures are between residents and commuters/shoppers and in town centres between commuters and shoppers On any weekday some 1.6m commuters’ cars are parked on street often in direct competition with other users – and we know that commuters are prepared to walk 20mins+ to benefit from free parking – pushing the problem deep into residential areas The result is 1.2m households live in areas where they require a permit to park their car on the road Another 0.5m commuters’ cars are parking in public car parks often in competition with shoppers and other visitors While at the end of day some 7m cars are parked on street – often because we are using our garages for other purposes
  • So councils use parking permits to prioritise demand in residential areas and this is where things start to get tricky Is this a business that the council is operating with the aim of generating revenue or a service to its residents Few councils seem to be clear – suggesting that a residential controlled parking zone should aim to be revenue neutral was met with amazement in one local authority recently So councils try to get there parking permit policy be all things to all people – It should be market based so price varies by location in line with private parking charges No everyone should be treated equally no matter where they live so single price across the council – whisper it quietly but one council doesn’t charge for its permits Climate change means we are trying to get people to use lower emission vehicle so lets charge by emission band – interestingly an idea taken up by each of the 3 main parties We should be trying to reduce car ownership so only one permit per household – ah a way of increasing revenue lets charge more for additional cars We should be supporting local business so provide them with permits – why should commercial operators get cheap parking charge them full commercial rates Are we treating everyone fairly – exemptions for all – health visitors, ministers of religion to members of the local bowling club and MPs
  • If parking permits are complicated then surely the world of paid for parking is far simpler But surprisingly its not – again there is confusion even among private sector operators as to what they are trying to achieve from their parking operations Is it a profit centre in its own right or are we trying to drive traffic to a particular location Should our city centre car parks be for shoppers or workers – even here in Birmingham – the council provides a 10% discount for annual season ticket holders and even higher discounts are available eg in the jewellery quarter Many motorists will be surprised to learn that it is certainly not a cash cow for local council
  • In 2007-8 English councils generated £1.3bn from parking – in net terms around £360m But London is responsible for almost half of that revenue (both gross and net) And nearly a third of net revenue was generated by just five boroughs – for Westminster parking revenue is broadly the same as it collects from the council tax For the rest of England parking is not a cash cow – in fact 100 English authorities lost money on parking – some £80m So why subsidise parking
  • Free or subsidised parking is the demand for many – to encourage people back into our deserted town centres Parking must be seen as a service to shoppers not a source of council revenue – says the RAC There is of course no such thing as “free parking” someone somewhere has to pay for it – all to often the cost is hidden in your shopping bill or the quality of our environment How much does free parking affect people’s choice of shopping location
  • Perceptions and reality are often very different especially amongst retailers who often have no idea how people get to their store This survey in Bristol has been replicated many times elsewhere and shows the majority of people do not drive to their local high street Perhaps the other shock to many is that parking is rarely a key factor in determining where people shop
  • Equally – parking is rarely the reason why people decide to shop in a particular locality - If the only thing you have to offer is free parking then your retail offer is going to pretty poor
  • This is the results of a survey in the north-east – similar surveys elsewhere show similar results It’s the offer available that is key to attracting people to town centres or shopping centres The UK’s largest retail centre is virtually inaccessible by car (Oxford Street) – here in Birmingham we have a very successful retail centre where shopping parking costs around £3 for 5 hours while Manchester you’re are more likely to be paying £10
  • Parking should be seen as a profit centre in its own right - - subsidising it makes little sense but it needs to be treated as a business with clear customer service The technology is available where no-one should ever receive a penalty charge unless they deliberately set out to avoid payment Greater use of pre-booking Premium car park services – linked to key town centre retailers attractions Mobile phone payment – reminder when period coming to end with ability to top up - at a premium charge

Transcript

  • 1. Parking Community service or revenue raiser An economist’s perspective COLIN BUCHANAN
  • 2. Question time
    • Job well done
    • Serves her right
    • Money in the bank
    • Who cares
    • A disaster
  • 3. Why are you in the parking business?
    • Managing excess demand
    • Prioritising conflicting demand
    • Raising revenue
    • Attracting visitors/shoppers
    • Reducing congestion
    • Climate change
  • 4. Motorists confused by parking
    • 93% motorists confused about parking regulations
    • 25% issued with a PCN last year
    • 69% claim they were unfairly penalised
    • 60% think some parking signs are deliberately misleading so drivers can be fined
  • 5. Can you blame them
  • 6. Probably not
  • 7. Managing competing demands
    • commuters’ cars parked
      • 1.6m on-street
      • 0.5m in public car parks
    • 7m cars parked on street at home (only 40% of garages are used to park cars in)
    • 1.2m households require resident parking permits
  • 8. Parking permits
    • How much too charge?
    • Should it vary by
      • Location
      • Engine size
      • Number of cars
      • Commercial or private
    • What exemptions should apply
  • 9. Paid for parking
    • Managing excess demand
    • Raising revenue
    • Attracting shoppers
  • 10. Parking a tale of two worlds
    • Local government generated £1.3bn gross from parking - £0.4bn gross
    • London generates around half £560m gross net £160m net
    • However, of that, £110m is raked in by just five authorities
    • almost 100 local authorities lost money £80m between them on parking in 2007/08
  • 11. If only it was free
  • 12. Closed shops and double yellow lines – are they related
  • 13. How do shoppers travel
  • 14. Why do you shop here
    • Near to home 52
    • Wide range of goods or shops 17
    • Near to Work 15
    • Competitive prices 15
    • A particular shop 7
    • Other Services 4
    • Car Parking Availability 2
  • 15. Why do you shop elsewhere
    • Wide Range of Goods / Shops 43%
    • Near to Home 29%
    • Competitive Prices 26%
    • A Particular Shop 6%
    • Other Services 4%
    • Car Parking Availability 3%
  • 16. We have the technology
  • 17. What image would you prefer your customers to have