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Examining the economics of park and ride

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Matt Steele has an excellent piece diving in to the economics of park and ride for transit in the Minneapolis-St. Paul region. He attacks some of the common wisdom about the virtues of park and ride, most especially the free parking that often accompanies it. It's this kind of analysis that makes me hopeful about coming to new solutions about the provision of transit service in many cities. It's a long post and well worth the read for the transit geeks out there. Here's a couple of nuggets:

The reality is that real estate devoted to the storage of motor vehicles costs money – whether it’s 20 spaces leased from a church or $20 million in new parking structures. Clearly, subsidized parking plays a significant role in the makeup of our regional transit system – but who’s paying? Not just the folks leaving their cars in the ramp to get on the downtown bus.

If the new Maplewood Mall ramp capital is amortized over a 20 year period, we’re spending roughly $1200 per space per year to have the capacity for 580 new park & riders. At 240 workdays a year, a $5 parking fee would be necessary just to pay off the investment. $5 per person in addition to the transit fare to operate the bus. A $5 parking fee which wouldn’t even pay for maintenance, snow removal, and lighting – so let’s bump that up to $7. And that’s assuming those ramps are full every work day. But they’re not. In 2012, MinnPost noted that roughly 2/3 of spaces were occupied. Tack on another $2.50 for the principle payment to cover the space elsewhere in the park & ride system that cost money but is not storing a car.

Suburban park & riders are clearly not paying $9.50 to park before paying an additional fare to get on the bus. Someone else is paying to subsidize their car storage habits. And you’re it.


It’s not wise for our transit strategy to attract ridership at all costs by subsidizing car storage. Nor is it fair to transit riders who, by their own choice, pay the same fare but do not consume the same expensive parking spaces. There’s a solution.


Modern technology allows us todecouple parking costs from other costs, which is the first step. The near-ubiquity of GoTo cards (especially on commuter routes) allows for us to have a fast way to account for parking transactions, possibly with an RFID-equipped entry gate or a validation match to a parking space. For those without GoTo cards, new technology similar to parking meter kiosks can be used to conduct parking transactions. This change allows people to have proper incentives to make parking decisions based on the cost (or at least the partial cost) of their choice.

The second step is to eliminate the express fare for those who do not consume parking spaces. The fare would then fairly represent time-access to the regional transit network, whether you’re using the 94 Express or the Green Line local.

To start, the parking charge can be $0.75, the difference between the current local and express fares. Over time, the parking charge can increase until it fully covers the cost of parking maintenance, payoff of incurred debt to build parking, and a demand-responsive increase of park & ride spaces at the market rate for parking.

Eventually, parking could become a profit center for bus operations, assuming the cost for parking and the transit fare are marginally more valuable to potential riders than an excruciating commute on a packed freeway. Instead of today’s cost center, where parking soaks money that could otherwise be used on productive transit, it could actually make transit better – for all of us.

Sharing: the new public transportation

Downtown development IS more affordable than suburbia