FREE PARKING AS A TRANSPORTATION PROBLEM

Abstract

As many as 40 percent of all those commuting by auto to the downtown areas of U.S. and Canadian cities appear to park free at their destinations. This surprisingly widespread practice is a significant but overlooked determinant of mode choice. The study attempts to estimate how many of those who are offered employer subsidized parking decide to drive alone rather than commute by carpool, transit, or another means. The best estimate appears to be that approximately 20 percent of those who now drive alone and receive free parking would form carpools or begin using transit for the trip to work if required to pay for parking. This estimate reflects the results of a variety of mode choice models, as well as comparisons of the behavior of similar commuters who park free and who pay for parking, and the results of imposing charges for parking formerly provided free. The major incentive for employers to provide free parking appears to be the fact that as a fringe benefit, free parking escapes income taxation. Enforcing the reporting and taxation of its cash value, however, is a difficult and predictably unpopular approach. Instead, this study recommends two policies intended to extend the subsidy for work travel now enjoyed by many drivers, in the form of free parking, to travel by other modes: (1) amend the Internal Revenue Code to permit employers to pay employees a tax-exempt travel allowance in lieu of free or subsidized parking; and (2) extend free parking only to drivers who carpool (e.g., only to autos with three or more occupants). Both policies promise significant increases in carpooling and transit use at very low or no public expense.

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