Free Parking Gives Rise to Congestion

Thank you for your comment Nikhil. I discussed your point with Prof. Shoup and am posting his response herewith:

"Because drivers don't want to pay for parking, I can understand why they might say that it is illogical to pay for parking, and that cities should instead provide good public transport. ¯But one big problem with public transport is that buses are mired in traffic congested by drivers who are cruising for free on-street parking. The best and cheapest way to improve public transport is to charge enough for on-street parking to create one or two open parking spaces on every block, so that drivers will not have to search for parking. Even cities with superb public transport have to charge for on-street parking to avoid cruising from congesting traffic. For example, London charges £5 an hour for on-street parking in the city center because that is the price needed to create open spaces and prevent cruising. The laws of supply and demand have not been repealed for on-street parking.

Only 14 percent of households in India own a car, and ownership is concentrated among the relatively rich. If Indian cities charge fair market prices for on-street parking and use the revenue to pay for local public services, never before will so many poor people receive so much public benefit paid for by so few rich people. Even drivers will benefit because market prices for on-street parking will help solve the two most difficult problems of owning a car in these cities: traffic congestion and parking shortages.

India's Centre for Science and Environment has published an excellent analysis of parking problems in Indian cities. It says that, "If parking charges are adjusted to reflect the costs of providing parking in cities, the rates could be 4 to 5 times higher than the current parking rates." It's no surprise, then, that drivers might think it illogical¯ to pay for parking. Everybody wants something for nothing, but we should not promote free parking as a principle for transportation pricing and public finance."

Prof. Donald Shoup