THE HIGH COST OF

FREE PARKING
Donald Shoup

VEHICLE OWNERSHIP RATES:THE UNITED STATES FROM 1900 TO 1996

AND 15 OTHER COUNTRIES IN 1996
(Motor vehicles per 1,000 persons)
800
750

1990

Vehicle ownership rates in 15 countries in 1996

(Each country is placed beside the year in which the US
had the same ownership rate.)

700

1996

1985
1980

650
1975

600

MOTOR VEHICLES PER 1,000 PERSONS

Australia (583)
550

Japan (547)
France (526)

500

1970

United Kingdom (486)

1965

Spain (457)

450

1960

Denmark (397)

400

1955

350

Ireland (343)

Israel (266)

250
200

1950

Greece (310)

300

1940
1930

South Korea (208)

1945

1935

1925

Argentina (170)
150

Vehicle ownership rates in the United States from 1900 to 1996

Mexico (125)

100
Russia (80)

1920

50
China (9) 1915
0
1900

1910

1920

1930

1940

1950

YEAR

1960

1970

1980

1990

2000

All transportation systems have three basic elements:

Vehicles

Rights of way

Terminal capacity

Trains
Airplanes
Ships
Cars

Train tracks
Sky
Oceans
Roads

Train stations
Airports
Seaports
Parking spaces

Automobile travel is unusual in two ways:

It requires enormous terminal capacity
(several parking spaces per car).
The cost of parking has been shifted out of
the transportation sector and into the prices
for everything else. Drivers park free for 99
percent of automobile trips in the US.

Who pays for free parking?

Everyone but the motorist.

TABLE 7-4
ANNUAL CAPITAL AND OPERATING COST
OF PARKING AND ROADS
($billions per year in 1990-1991)
Low
High
Bundled non-residential parking

$49

$162

Bundled residential parking

$15

$41

Municipal and institutional parking

$12

$20

Priced parking

$3

$3

Total cost of parking

$79

$226

Total parking subsidy

$76

$223

Priced parking as % of total parking

4%

1%

Total cost of roads

$98

$177

Parking cost as % of road cost

81%

128%

Source (Delucchi 1997, Tables 1-5, 1-6, and 1-7)

In 2002, the total subsidy for off-street

parking was between $135 billion and
$386 billion.
In 2002, the federal government
spent $231 billion for Medicare, and
$349 billion for national defense.

Results of changing the price of

off-street parking

Employer-Paid Parking

95% of all automobile commuters park free at work

91% of all commuters drive to work
91% of commuters cars have one occupant
Most commuters park free regardless of

age
gender
income
education
residence

85 million free parking spaces at work in 1994

Parking subsidy for commuters was $36 billion a year

Employer-Paid Parking:
A Matching Grant
Employers pay for parking at work if
the employee is willing to pay for
driving to work
Commuters who do not drive to work
do not get a subsidy
Employer-paid parking encourages
solo driving

Free parking increases solo driving by 60%

S o lo d r iv e r s h a r e

100%

90%
80%

67%

70%
60%
50%
40%

42%

30%
20%
10%

0%

Driver-paid parking
Employer-paid parking

Parking Prices Affect Mode Choices

For Commuters to Downtown Los Angeles

C o m m u te r m o d e s h a r e

80%
70%
60%
50%

Drive solo

40%

Transit

30%

Carpool

20%
10%

0%

$0

$1

$2
$3
$4
$5
$6
Price of parking at work ($/day)

Source: Estimated from Willson (1991)

Californias Parking Cash Out Law

Employers must provide a cash allowance to
an employee equivalent to any parking
subsidy offered
The requirement applies to:
Firms with 50 or more employees
Only for leased parking spaces

C
o
m
m
u
t
e
r
m
o
d
e
s
h
a
r
e

Commuter Mode Share Before and After Parking Cash Out

100%

80%

76%
63%

Before cash out

After cash out

60%

40%
23%

20%

14%
6%

0%

Solo Driver

Carpool

9%
2% 3%

Transit
Walk
Commuter mode choice

.8%.9%

Bicycle

Results
Parking cash out reduced the number
of cars driven to work by 11%
After parking cash out, employees
traveled 652 fewer vehicle miles per year
consumed fewer 26 gallons of fuel per
year

Results of increasing the price

of curb parking

P
r
ic
eo
fo
f
f
s
tr
e
e
tp
a
r
k
in
g(
$
/h
o
u
r
)

$15
$14
$13
$12
$11
$10
$9
$8
$7
$6
$5
$4
$3
$2
$1
$0

FIGURE 13-2
PRICES OF CURB AND OFF-STREET PARK
(for parking one hour at noon at city hall on a weekday)
New York City
Chicago

Boston

Seattle

Pasadena, San Diego, Baltimore

Santa Barbara
Cambridge, Santa Monica
Los Angeles
Buffalo, Philadelphia
Long Beach
San Francisco, Portland
Palo Alto, Berkeley

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9$10$11
$12
$13
$14
$15

Price of curb parking ($/hour)

TABLE 11-4
SUMMARY OF RESEARCH ON CRUISING

Year

Location

Share of
traffic
cruising

Average
search
time

(percent)

(minutes)

1927
1927

Detroit (1)
Detroit (2)

19%
34%

1960

New Haven

17%

1965
1965
1965
1977

London (1)
London (2)
London (3)
Freiburg

1984

Jerusalem

1985

Cambridge

30%

11.5

1993
1993
1993

New York (1)

New York (2)
New York (3)

8%

7.9
10.2
13.9

1997

San Francisco

6.5

2001

Sydney

6.5

Average

74%

6.1
3.5
3.6
6.0
9.0

30%

7.7

Park-and-visit time (minutes)

Park-and-visit times before and after changing

the price of curb parking in London

14

Before After

12.7

12
9.8

10
8.1
8
6

4.4

5.1

4
2
0

Quadruple

Double
No change
Curb parking prices

P a r k - a n d - v is it tim e s ( m in u te

Park-and-visit times before and after

R
parking prices were quadrupled
e

14

12.7

12

Before After

10

6.0

4.4

4
2
0

2.9
1.0

0.6 0.

Searching Parking Walking

Total
Components of park-and-visit time

The effects of parking prices on Grosvenor Square in London

No meters

Meters

Prices quadrupled

Conclusion
Parking is heavily subsidized. The annual
subsidy for off-street parking may be about
the size of the budget for national defense.
Parking prices have a profound effect on
travel choices. Parking subsidies
substantially increase vehicle travel.