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San Francisco Rolls Out Dynamic Parking Rate Model

San Francisco sets parking rates on its 28,000 meters based on the demand throughout the day — rising during peak times and falling during lulls.

Cost-conscious drivers in San Francisco may want to think twice before pulling into that parking space on an unusually busy downtown street in the Financial District.

Like so much of life in cities now, no two parking spaces are necessarily equal. As of December, San Francisco has transitioned its SFpark pilot into a citywide program to set rates on all 28,000 parking spaces on public streets and 14 city-operated garages. The plan prices parking based on demand — not unlike the approach used by airlines to set fares or ride-hailing apps to set the price of a trip.

“Demand-responsive pricing,” as the concept is known, means “prices could fluctuate block by block, time-band by time-band, and then weekday versus weekend,” said Hank Wilson, parking policy manager for the San Francisco Municipal Transportation Agency (SFMTA).

The new approach to setting parking rates in San Francisco based on demand is not intended as an effort to raise parking revenue, officials stress. In fact, the new system will likely be revenue neutral because rates on many streets and in garages will likely drop. No meter has reached the $8-per-hour cap.

“Interestingly, because we were adjusting rates based on demand — and that meant that in a lot of cases (rates) went down — overall, average parking rates actually went down over the course of the pilot,” said Wilson.

The dynamic pricing system pilot program ran from 2011 to 2013 and affected 25 percent of the city’s metered spaces and garages. Each day was split into three pricing time-bands: 9 a.m. to noon, Noon to 3 p.m. and 3 p.m. to 6 p.m. Weekday and weekend prices were also set separately. Which means, for example, meters on the 1600 block of Post Street could have a different parking rate between the morning and afternoon.

Average meter rates fell 4 percent, while city-owned garage rates dropped 12 percent during the pilot project, the city reported.

“Prices were adjusted intentionally very gradually, every six or eight weeks, by 25 cents an hour,” Wilson explained. “And the way that we set prices was we measured demand within those time-bands, by block and by weekday and weekend. And had essentially occupancy ranges that would trigger a rate adjustment.”

Ideally, a block would be “relatively full,” but not so full that drivers are circling looking for parking. The target range was set at 60 to 80 percent occupancy. Today, the way the system works is if occupancy is above 80 percent, the parking rate will climb 25 cents. If occupancy is between 60 percent to 80 percent, the price remains the same, and if occupancy drops below 60 percent, it drops 25 cents.

To better understand demand, the city placed sensors on meters to determine when a space was occupied and for how long. Smart meters were also installed in all of the pilot spaces allowing them to accept credit card payments and collect other data.

The sensors indicating whether a space was occupied during the pilot have reached the end of their useful life and have been turned off.

“And so, we don’t have that real-time, minute-by-minute occupancy,” said Wilson.

To take the place of the information offered by the sensors, SFMTA created a system that studies parking data across several years to determine “when this percentage of meters are paid — on average — this percentage of meters are occupied,” said Wilson. “We’ll be using that methodology when we do demand-responsive rate adjustments citywide. It’s very accurate.”

Ultimately the idea behind demand-based rates is rooted in the goal of getting drivers off the streets and into a space as quickly as possible.

“You certainly hear stories in San Francisco of people saying, ‘I circled around for an hour and couldn’t find parking, so I just left,’” Wilson offered. “And of course, less driving means fewer greenhouse gas emissions. And also, the idea is if your parking experience is a little more pleasant, and quicker, you will come back.”

How would you know what to expect to pay at any given space, at any given time? Information is available on the SFMTA website, which is smartphone friendly.

“There’s a real-time map that shows what the prices are at the time that you’re looking,” said Wilson.

San Francisco’s approach at setting parking rates based on traffic and demand is not entirely new.

New York City operates its PARK Smart NYC program which places higher rates on spaces in high-demand neighborhoods. For example, parking in Greenwich Village cost $5 an hour from 6 p.m. to 10 p.m., and then drops to $3.50 per hour during other times — the same rate applied to many parts of Manhattan for a space below 96th Street.

Los Angeles may come closest to San Francisco’s parking approach. The city launched its LA Express Park program to improve parking availability in downtown. The city uses sensors to monitor parking activity, and adjusts rates based on demand for each of the 19 blocks covered by the system. The parking meters or pay kiosks display the rate for that particular space at that particular time. Rates can also be found on the LA Express Park website. Simply click on the block you would like to park on to learn the rates at different times of the day.

In San Francisco, officials found that when parking becomes easier, the economy may be the windfall. The project found that sales tax collections in the pilot areas increased 35 percent in the test areas, compared to increasing 20 percent in other parts of the city, during a time of admittedly overall economic recovery.

“The fact that [sales tax collections] went up a lot faster in the pilot areas was certainly a good sign,” he added.

Skip Descant writes about smart cities, the Internet of Things, transportation and other areas. He spent more than 12 years reporting for daily newspapers in Mississippi, Arkansas, Louisiana and California. He lives in downtown Yreka, Calif.