Nick Lester-Davis: How much should Londoners pay to park their cars?

Every driver hates having to pay to park their car. And if you look at the media the price of parking is a major bone of contention, not only for motorists. Retailers think parking charges drive away trade, an argument made by Mary Portas in her report on saving the high street. She thought free parking essential to their survival. London boroughs are accused of using parking charges as a “stealth tax” in their “war against the motorist”.   In 2012, the then leader of Westminster City Council stood down following a row over his plans to introduce parking charges to the West End on Saturday afternoons.

Some councils, responding to this type of pressure, have moved to eliminate parking charges in some places at certain times. But not many. So if we’re going to charge for parking in London, what is the right level for them?

The laws of supply and demand apply to parking as much as to peppermints: put the price up and demand will drop, cut the price and demand will rise. But, unlike peppermints, the supply of parking is basically fixed. So, if the price is too high there will be increasing numbers of empty parking spaces and if the price is too low you get increasing numbers of drivers circling around, looking for increasingly rare spaces to become vacant.

There are few benefits from lots of empty spaces stemming from charges that are too high, unless they are repurposed into parklets or cycle lanes. They result in fewer visitors, even if the percentage reduction is not large. More drivers will try to risk it by not paying, causing an enforcement issue.

But charges that are too low, leading to more “searching” traffic, has even less going for it. It causes pollution and congestion, making high streets far less attractive as places to visit. And, once the parking spaces are full, however much searching traffic there is, there’s not a single extra visitor because there’s “nowhere to park”.

This puts off motorists, too. Surveys regularly show that drivers place a higher premium on finding a parking space than on the amount they have to pay for it. But political pressure, especially from retailers, tends to push councils into undercharging.   Bizarrely, this happens particularly at Christmas, when there is always a big push to provide free parking at the busiest shopping period, thus creating the worst of all possible worlds.   

This happens even though shopkeepers actually have a very poor understanding of how their customers get to their shops. A survey in Camberwell in 2008 showed, in line with similar studies conducted elsewhere, found that retailers wildly overestimated the percentage of their customers who came by car while underestimating those who came on foot or by bus. In London, car-based shoppers are typically the third or fourth most important group, yet most retailers put them first.   

Donald Shoup’s surveys in the USA show that as much as 30 per cent of town centre traffic is just cruising round looking for a parking spaces. Work in the UK suggests it’s not that much different here.

The happy optimum is for parking to be charged so that the average occupancy of spaces is about 85 per cent. This means spaces will generally be occupied, but there will always be one or two available for drivers who come looking to park. Maximum footfall, minimum searching traffic – it’s the best you could hope for. The pursuit of this objective is what explains the high on-street parking charges in Central London, rather than profiteering by local councils.

A ground-breaking approach in San Francisco has taken this further approach. In its city centre, parking charges are set block by block and vary at different times of the day in order to meet the happy 85 per cent mean. Charges are reviewed every three months and can go up or down by up to 50 cents an hour, according to demand.

The result has been exceptional: both drivers and retailers are happier as you can nearly always find a place to park in the block you want and spend more time (and money) shopping. Surprisingly for some, parking charges didn’t all rise when the scheme was introduced, and the outcome has been broadly financially neutral for the city authority.

Its political achievement has been to remove parking charges from the political arena. As changes to the level of charge happen frequently and regularly, they are not large and go down in some places as well as up in others – all so much easier to handle for the politicians.

Traffic laws make this approach more complex in the UK, but there’s no doubt that a move in this direction could be very beneficial. While a council will never keep drivers happy on the level of charge alone – even if parking is free – it could come much closer to guaranteeing motorists will find a parking spot where they want.

And should parking ever be free? Obviously, where demand is low and there are no cost-incurring facilities this can happen. But as soon as you start to incur costs – land for a car park, surfacing, construction, maintenance or security, for example – someone has to pay. If this isn’t the driver but the council or the shopping centre owner, then these costs fall onto drivers and non-drivers alike, representing a cross subsidy from those who don’t drive to those who do. Given the distribution of car ownership, this is an extremely regressive one.

This is true even in the case of residents’ parking facilities in controlled parking zones.Most residents see the cost of a parking permit as a tax on them being able to park outside their own home. But every council in London subsidises the costs of residents’ parking schemes. And in Inner London boroughs, where fewer than 50 per cent of households own a car, the non-car owning majority – usually skewed to the poorer households – are financially supporting the minority who do.

Parking is always a contentious issue for local councils, just Low Traffic Neighbourhoods are. But current policies in London tend to be out of line with broader transport policies and also socially and environmentally regressive. Outside of the capital things are even worse. But change is possible and needn’t be either expensive or politically untenable.

Nick Lester-Davis is a consultant on traffic, parking and other transport issues and a former Corporate Director of Services at London Councils. Follow Nick on Twitter. Image from Westminster Council video.

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1 Comment

  1. Dave says:

    You missed one tool being used by some councils, which is a parking surcharge on more polluting cars. This applies now in Islington and for a few years now in some councils on resident permits. I can envisage priority being given to electric car parking spaces at some point.

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