Credit Professor Donald Shoup with spotting a nascent trend and injecting it into the world of parking. Variable pricing has become a concept and practice pioneered in San Francisco and being considered or implemented in a number of other cities. But according to a recent National Public Radio (NPR) report, variable pricing has also become the rage in other industries as well.
Take air travel for example. Prices vary, day to day and hour to hour. A ticket on the same flight might cost 40 to 50 percent more or less depending on the day of the week and hour of the day it is purchased. Prices also vary according to what services you require. Spirit Airlines is probably the biggest proponent (or offender, if you prefer): A bag that you carry on costs less than one you check, but its cost also varies with how, when, and where you check in.
Another industry that is seizing on variable pricing is sports. Buy a ticket in advance online and pay one price, but pay at the gate and, depending where you sit, you might pay five to 10 times as much. Teams are considering changing prices based on the attractiveness of the opponent, day of the week, and the success of the local team.
I think variable pricing is a great tool–in the right cities, in the right locations within those cities, and managed thoughtfully with both a short- and long-term perspective. That said, I still have reservations as to whether every city should adopt the practice. Where parking is scarce and where there are many affluent people who will pay just about anything for a safe, convenient parking space, variable pricing makes great sense. It also makes sense in terms of residential parking discounts, as Shoup recently proposed, and as a way of rewarding other behaviors such as driving small cars and hybrids.
But in cities and towns that are still struggling to revive their downtowns, where retail stores and restaurants are fragile, and where the culture is resistant, I would think long and hard before introducing a system that confuses local customers and may spell doom for struggling shops and diners.