Demand-responsive parking pricing

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Demand-responsive parking pricing is a strategy that cities are increasingly using in order to better manage their public parking spaces. A demand-responsive parking pricing system utilizes market forces to eliminate parking congestion and to always maintain at least one empty space per block. These systems use smart meters or other technology to track the availability of parking spaces and then change the meter price to reflect the demand for those spaces. Similar to congestion pricing on highways, parking spaces in areas of high demand at peak times will see an increase in the cost of parking, while areas of lower demand or during off-peak hours will see a decrease in price. The goal of demand-responsive parking pricing is to always maintain at least one empty parking space per block in order to reduce the traffic congestion caused by cruising for open parking. There are multiple ways to pay for this parking, including by card or by phone.



Listed below are a number of goals of demand-responsive parking pricing systems. These goals may vary depending on the municipality implementing the systems.


A municipality identifies a neighborhood or other area of the city that appears to have a chronic shortage of parking and increased congestion on the roads from automobiles that cruise around, looking for parking in the area. The municipality then installs a network of "smart" parking meters at each space in the given area. These meters communicate together and when there is high demand for parking in the area, the price for the parking spaces rises to a certain level so that there will always be at least one empty space maintained per block for a potential customer to use. If there is lower demand during an off-peak time, then the prices drop in order to maintain the same level of parking availability. A demand-responsive parking pricing system replaces a free-for-all parking system with a managed, market-based system.


There are also a number of trade-offs in implementing this policy, which may include:

  1. Increased overall average hourly rates.
  2. Increased number of parking citations.
  3. Potential for greater impact on lower-income people.[1]
  4. Public backlash when transitioning from previously free parking to paid parking.
  5. Pricing targets may initially be difficult to determine.
  6. Price fluctuations may confuse drivers.
  7. Often perceived as a money grab by the municipality.
Compatibility Assessment

If answered yes, the following questions indicate superior conditions under which the policy is more likely to be appropriate:

  1. Is there a dearth of available on-street parking in the neighborhood?
  2. Are there large numbers of drivers cruising for empty parking spaces in the neighborhood?
  3. Is publicly available parking in the neighborhood free?
  4. Is there a fluctuation in demand for parking spaces throughout the day or week?
  5. Do cars parked in publicly available spots tend to linger longer than is necessary, reducing expected turn-over rates of the parking spaces?
  6. Could congestion be reduced by more efficient parking management?
  7. Could air quality be improved by more efficient parking management?

The following questions should be considered when determining how to implement this policy:

  1. Is there enough public right-of-way to install meters?
  2. Is the proposed area for demand-responsive parking big enough to make an impact on reducing local parking and congestion conditions?
  3. What will be the accepted methods of payment? Coin? Credit or debit card? By phone, either text to pay or a specialized app?
  4. How often will the pricing change? Morning rush hour vs. middle of the day? Weekday vs. weekend? Every hour? Every half-hour?
  5. How will parking congestion be measured?
  6. What is the segment of the neighborhood where the price will change uniformly? For example, will each block be priced separately? Or will each street be priced separately?
  7. Who will fund implementation of this policy?
  8. What will happen with any increase in revenue that the municipality may receive from this policy? Will it be reinvested in the neighborhood where it was collected?


  • Has adoption of: Limited. Only a small number of cities have implemented or proposed to implement demand-responsive parking pricing systems.
  • For governance level(s): Local.

Notable entities that have implemented or adopted this policy include:




  • Litman, Todd. (November 5, 2013). Parking Management: Strategies, Evaluation, and Planning. Victoria Transport Policy Institute. [9]
  • Mathur, Suhas, Sanjit Kaul, Marco Gruteser, and Wade Trapp. (May 18, 2009). "ParkNet: A Mobile Sensor Network for Harvesting Real Time Vehicular Parking Information." New Orleans, LA. [10]
  • Qian, Zhen (Sean) and Ram Rajagopal. (January 24, 2013). "Optimal Dynamic Pricing for Morning Commute Parking with Occupancy Information," Transportation Research Part B. [11]
  • Ryan, Andrew and Nicole Dungca. (September 24, 2015). "Prime City Parking May Soon Get Pricier," The Boston Globe. [12]
  • Designing Dynamic Pricing for On-Street Parking, Xerox Corporation. 2015. [13]
  • Dynamic Parking Pricing Implementation Manual, State of Florida Department of Transportation. [14]
  • Performance-Based Parking Study - Final Report, Seattle Department of Transportation. [15]
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