Dynamic Pricing of Street Parking in San Francisco

Lynne Kiesling

In all of the discussion this week of Tyler’s NYT column on pricing and constructing lot parking, an innovation in pricing street parking has been overlooked. Under a new pilot project in San Francisco called SFpark, street parking will now be priced using dynamic pricing. According to SFpark’s description,

To help achieve the right level of parking availability, SFpark will periodically adjust meter pricing up and down to match demand. Demand-responsive pricing encourages drivers to park in underused areas and garages, reducing demand in overused areas. With SFpark, real-time data and demand-responsive pricing work together to readjust parking patterns in the City so that parking is easier to find.

The prices will not vary dramatically; as this Wired post notes,

The prices won’t fluctuate wildly during the course of a day. The changes will be slow and self-leveling: the prices will change once a month or less, and then only by 50-cents at a time.

Also, as the commenters on this post about the pilot note, it’s not like the price is going to be determined by a real-time double auction. Still, having both the city and potential parkers using digital technology to assess changing demand for parking and access real-time information on the current hourly parking price is a good first start in introducing dynamic pricing.

The anticipated benefits of dynamic pricing of street parking are numerous: saving time (and reducing the opportunity cost of parking in terms of time spent circling and looking for a space), reduced double parking, better parking space capacity utilization (both for street parking and lot parking), increased safety for cyclists and pedestrians who won’t have as many obstacles in the form of double-parked cars and distracted drivers looking for spaces, and (of course!) reduced fuel consumption and emissions because of the reduction in “inefficient” circling the block.

Certainly some observers will complain that the improved capacity utilization and reduced opportunity cost will, at the margin, increase the probability that some people will drive rather than taking pubic transportation; those same folks typically argue that parking pricing should be used as a social policy tool to induce people to drive less. Obviously, such comments ignore the value to people associated with the flexibility and multi-purpose capability of driving rather than taking public transportation.

Here’s my question (of course): if we can overcome our cultural and institutional barriers to dynamic pricing in street parking, why can’t we do so with electricity?

2 thoughts on “Dynamic Pricing of Street Parking in San Francisco

  1. The San Francisco PUC, which operates the water company (and Hetch Hetchy) recently started installing advanced water meters throughout the city (from their web page: “The new automated water meter system will use a low-frequency radio signal to collect hourly water consumption data and transmit them four times a day from San Francisco’s residential and commercial customers to the SFPUC billing system without the need for physical field visits and manual meter reading.”). However, at the same time, the S.F. District Attorney filed a petition at the California PUC to stop PG&E from installing advanced meters for electricity in San Francisco.

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