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(Today, we revisit an Intelligence Memo with a smart policy recommendation.)

From: Benjamin Dachis and Jennifer Y. Tsao

To: Canadian Municipal Parking Regulators

Date: August 2, 2018

Re: Get Rid of Jurassic Parking

You’ve witnessed the bruising battle between taxi companies and Uber. The next battle in the sharing economy is coming, and it will be over street parking. What should you do?

The issue is bubbling in Canada’s four largest cities because of the upstart car sharing service car2go. Members can pick up a car in one part of the city and drop it off in another. Other services, like Zipcar, have dedicated parking spots for individual cars.

Car sharing has a number of potential benefits. Studies have found that car sharing reduces the number of vehicles people need to own (private cars are parked 95 percent of the time), and boosts transit use.

However, despite the boom of car sharing services in Calgary and Vancouver (which has the world’s largest car2go fleet), and its  popularity in Montreal and Toronto, some residents and municipalities are pushing back. (And in fact, car2go abandoned Toronto three months ago.) Residents in Calgary, for example, are unhappy about the blue and white cars taking up scarce residential parking space.

So why is car sharing stuck in neutral? The short answer: our cities have outdated parking policies.

Curb parking is a modern example of the classic economic problem of a shared resource. When left unregulated and unpriced, some drivers can’t park. Many cities use time limits, say two hours, to keep spots open. But these rules are expensive to enforce.

What’s the solution? According to the guru of parking policy, Donald Shoup, cities should put a price on local street parking if streets go over 85 percent of parking occupancy. That local price would rise or fall so that there are parking spots available at all times.

If necessary, we can charge one permit price for local residents, and another variable price for non-resident cars, such as car2go. Currently, annual residential permits cost nothing in most of Calgary for the first two vehicles, $39.72 in most of Vancouver, and at least $190.20 in Toronto. Montreal permit prices vary by neighbourhoods from being free to $140 per year.  

Now, I know what you’re worried about: people who own parking permits are also your voters. How can we keep them happy? The solution, according to Shoup, is to have all parking revenues from a neighbourhood go back towards community improvements. This would entice voters and business improvement districts into wanting non-resident parking. They would also be guaranteed a parking spot on their street, while seeing improvements to their neighborhood. It’s a win-win thanks to better pricing.

The sharing economy isn’t so bad after all if we charge the right price and use revenues wisely.

Benjamin Dachis is Associate Director, Research, and Jennifer Y. Tsao is a Former Researcher at the C.D. Howe Institute. 

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The views expressed here are those of the authors. The C.D. Howe Institute does not take corporate positions on policy matters.