Comments on: Parking Costs

By: Blitz Blog » My space icons

Blitz Blog » My space icons — Sat, 24 Mar 2007 12:22:27 +0000

[...] Outside Beltway - My experience with DC parking garages is similar, by the way; the first hour is … These icons link to social bookmarking sites where readers can share and discover … So if the short timer leaves and they can sell the space again, great. It may well be … Read more [...]

By: carpeicthus

carpeicthus — Thu, 22 Mar 2007 01:46:46 +0000

The reason other cities don't do it is that it's much easier to find a normal, metered spot.

By: bob in fl

bob in fl — Wed, 21 Mar 2007 21:16:23 +0000

Parking garages have the equivalent in utilities. I pay a $10/mo. meter fee to the power company before I pay for each kilowatt of electricity I use. The more I use, the less per kilowatt hour it actually costs me. The more I use my phone, the less per call. In every part of our economy, the more you buy, the less cost per unit.

I have found the same kind of rate structure in every parking garage I have used. It costs more to park 6 cars in the same spot per day than to park 1 there. Like someone else said, the all day parkers pay the lions share of the expenses, while the short termers contribute most of the profit. That is just the way our economy works.

By: Steve Verdon

Steve Verdon — Wed, 21 Mar 2007 19:03:23 +0000

Well it is basically a form of price discrimination, or what in economics is called a two-part tariff. A two-part tariff takes the form of T(q) = A + pq. A is your up front $10 fee and pq is the hourly fee. It is usually found with monopolists, but in this case the parking garages are probably more accurately described as monopolistic. That is, there is some competition, but since the product isn't homogenous (i.e. some garages have more desirable locations/facilities/etc.) They have some price setting power.

Also, the cost argument by James explains part of it too. The fixed costs for running a parking lot are quite high, while I suspect the marginal costs are very low. Hence a price T(q) = pq may not recover all of the costs.

By: Dave Schuler

Dave Schuler — Wed, 21 Mar 2007 18:20:54 +0000

Markets probably have nothing to do with it. If New York is anything like Chicago, the rates and terms for parking garages in the city are probably set by the city.

By: yetanotherjohn

yetanotherjohn — Wed, 21 Mar 2007 18:16:44 +0000

Makes perfect market sense to me. While a few parkers may have the parking rates change their plans, most are going to park there as long as it takes to do what they came to do and then leave. So if the short timer leaves and they can sell the space again, great.

It may well be that the long term parkers cover the fixed costs and the short term parker make-up the bulk of the profit.

By: » OTB News

» OTB News — Wed, 31 Dec 1969 18:00:00 +0000

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