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pricing the priceless parking spot

Planet Money had a fun podcast a couple of days ago about Eric Meyer, the young founder of Haystack, a Baltimore-based app that allowed people to auction off their (public) parking spot to the highest bidder. MonkeyParking, a similar app, got attention last year in San Francisco.

The founders, in both cases, focused on the time-saving, traffic, and environmental benefits of such an app. Clearly there are real costs to people spending long periods of time circling the block in search of parking. UCLA economist Donald Shoup has argued that 30% of traffic in central business districts results from people looking for parking.

But these apps quickly generated enormous hostility. People used words like “disgusting,” “evil” and called it “JerkTech”—all to the apparent surprise of Meyer, at least. Within months, Boston and San Francisco had passed ordinances forbidding the selling of public parking spots. Haystack and MonkeyParking were basically shut down by the end of the year. (MonkeyParking has since retooled as a way to sell the parking in your driveway.)

This is a familiar story to economic sociologists. Some area of life that was previously outside of the market is suddenly brought into it. Violent feeling erupts, as such transactions are seen to challenge the moral order. (See Zelizer, Healy, Quinn, Chan, etc.) Generally, the market wins, and morality adapts.

There aren’t too many things—humans, organs (though even that’s eroding)—where a bright line still forbids buying and selling. Why, then, do Haystack and similar apps generate such hostility?

I think there are a couple of independent things prompting the hostile reaction.

1.  Something that was, at least superficially, free, suddenly comes to cost money. People really don’t like being charged for things that used to be free, even if they were always paying for it somehow. (See: airline fees.)

2.  Someone is making money by selling public property. This one is probably more important to city officials than city residents. From this perspective, the problem isn’t selling the spot, but who’s receiving the gains. Indeed, some of the same cities that reacted so negatively to these apps (I’m looking at you, San Francisco) have introduced dynamic pricing of parking, which allows prices to fluctuate with demand. (Think: Uber surge pricing.)

3.  Now only the well-off can afford to park. This objection is to my mind the most legitimate. And while I fully recognize that it is really wasteful to have people circling around looking for parking, I don’t think it can easily be dismissed.

Now, I don’t want to stake any big claims around the inalienable right of Americans to park their cars. After all, you have to have a certain amount of money to have a car in the first place. And in general I think policies that discourage driving are good.

And it’s the very basis of capitalism to accept that there are things that some people can afford and others can’t, and to make one’s peace with that. But the thing about price caps (whether the cap is zero, as for street parking, or some flat rate, as with taxicabs) is that while they are inefficient, they are also democratizing. Yes, you may have to circle the block for 20 minutes. But dammit, so do the tech entrepreneurs who are pricing you out of your apartment. There are some things you can’t buy your way out of.

We live in a society in which inequality continues grow. At the same time, technology is improving our ability to make people who are willing (and able) to pay a lot do just that. That may be efficient. But it further reduces the sense that we’re all in this game together. And that’s the issue we don’t have a good solution for.

Written by epopp

June 8, 2015 at 12:00 pm

Posted in economics, technology

6 Responses

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  1. One of the things that really bothers me about discussing of pricing for parking is the extent to which they assume all needs for parking are the same. Parking in New York City is different from parking in Boston, where public transit stops running late at night, and both are different from parking in my city, where public transit does not necessarily go where you need to go. Parking in New York City for a plumber with a van full of supplies that needs to be near the job site is different than parking as a regular commuter, and that is different than parking for a person with physical disabilities (New York City, FYI, does not have handicapped parking spaces–you have to get a special city placard which is different from the regular state placard, is not available for tourists, requires yearly renewal even for permanent disabilities, and requires review by New York City-selected doctors that are expected to deny most claims).

    So I am also all for discouraging driving, but charging for parking creates important kinds of inequality that many people do not think about. Unless people have real, legitimate alternatives in terms of how to get where they are going, charging more than a nominal rate for parking says that some people are not welcome to participate in the public and economic life of a neighborhood.

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    Mikaila

    June 8, 2015 at 4:43 pm

  2. I thought that the big selling point of Capitalism, Competition, and The Market was that these will create more of what consumers want in better versions and at lower prices. Uber lets adds private cars to compete with taxis; AirBnB adds private rooms to compete with hotels; Monkey Parking adds private driveways to compete with parking lots.
    Will Haystack-like apps increase the number of on-street parking spaces, improve their quality, or lower the price?

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    Jay Livingston

    June 9, 2015 at 10:48 pm

  3. Jay: it depends on what you mean by quality and cost. Circling for a spot is a kind of cost, and not knowing if you can find a spot is a kind of limitation on quality. So I can certainly see why people who have a lot more money than time prefer such an option. The point that @epopp is making, though, is that circling is a democratic cost, in comparison with these apps, which make parking available only to the wealthy.

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    Mikaila

    June 10, 2015 at 4:44 pm

  4. Mikaila. That was sort of my point. A lot of things begin as available only to the wealthy. I remember a watch lover proudly showing me his digital watch, one of the first. It cost $2000 in 1970s money — about $8000 today. I just bought one for $15 last week. But that effect, where everyone is better off, seems unlikely with parking places. The supply cannot be much increased, the quality cannot be much improved.

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    Jay Livingston

    June 10, 2015 at 7:17 pm

  5. The other idea is that providing something free encourages overconsumption. (Have you ever seen the trashcans at a school cafeteria?) So introducing a price would discourage the people who don’t really value parking that much. (It would also discourage the people who want it but can’t afford it, of course, which is the problem.)

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    epopp

    June 10, 2015 at 7:17 pm

  6. Fiske’s relational models theory explains this pretty well, especially in light of Tetlock and Fiske’s findings about the taboos of switching a system to market pricing when that’s not how it’s typically done :

    http://faculty.haas.berkeley.edu/tetlock/vita/philip%20tetlock/phil%20tetlock/1999-2000/2000%20the%20psychology%20of%20the%20unthinkable….pdf

    Liked by 1 person

    Chris M

    June 18, 2015 at 4:47 pm


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