Chicago somewhat controversially privatized its parking meters. Now you have to walk over to a machine, put in money or a credit card, get the receipt and put in on your dashboard – the meters are defunct. It’s $1.25/hour so it’s still way cheaper than parking in a private lot. And now the machines work, unlike many that were installed earlier.
And here’s the cool thing: Suppose you’ve paid for two hours, only use up an hour and drive off and park somewhere else. As long as parking costs the same in new spot where your car ends up and the parking rate is the same, your receipt is still valid and you do not have to pay for more parking. There is less chance of wasting quarters like you do now when you leave the meter with time on it.
The fact that the receipt gives you option value means you might put in extra. The company makes more money potentially because of this. Also, with a meter, the next person to park might get lucky and get some time paid for by someone else. This is a classic positive externality – each individual parker does not take into account and skimps on how much they out into the meter. This cannot happen anymore because your receipt stays in your car (or goes into the trash) and not to someone else. So, they have to pay for their time themselves. Another round of extra money for the parking company.
But, all in all, it not as bad as people thought originally. And I love my durable receipt.
Cheap Talk 
7 comments
Comments feed for this article
July 16, 2010 at 10:45 am
Liz
We have the same machine system in Boston, although run by the city, and I have seen people offer their receipts with extra time on them to other people approaching the parking machine. There is even potential for a secondary market here – you could sell your receipt to someone else for $1 an hour to make back some of the money you would have lost by overestimating the time you needed to park.
July 16, 2010 at 11:05 am
sandeep
I don’t know if you’re an economics grad student or not but I see a QJE in your future if you can collect data and identify something funky.
July 16, 2010 at 6:01 pm
wheninrome15
Anyone got a theory as to why we can put coins into these machines…or pay by credit…but no dollar bills?
July 18, 2010 at 2:57 pm
old europe
the city of Paris has put this in place some ten years ago, with price discrimination. Residents pay less (within a restricted area around one’s place –you get a permit indicating which zones are allowed) than visitors, and can even pay at once for an entire week (3euros 25 for a week). Second market seems not very active
July 19, 2010 at 3:24 am
Jason
This is standard in my city (though Council owned), but after a few years they began to zone it, like in the comment above. Unfortunately, the Council decided to limit the parking coupon to the carpark you’re using (well, within fifty odd metres from the machine). The currency of the secondary market is goodwill.
July 19, 2010 at 9:52 am
Alan Miller
We have a similar system here in Haifa, although we also have the options of (1) a portable meter and (2) a cellular dial-in system, so you only pay for what you use.
The port is in a separate zone, but that is about it. I think the same thing generally holds elsewhere in Israel, which can be a problem if you are trying to find parking in certain neighborhoods in Tel Aviv.
August 2, 2010 at 4:46 pm
Tous
Hmmm, I’m not quite sure what “somewhat controversially” means for you but a year ago, the outrage over the deal was palpable – so much residents of one neighborhood chained themselves to the old meters to protest the switch over to the new receipt dispensing machines. At the end of the day, the mayor had his chief of staff throw himself under the bus to save face.
You also neglected to mention that the prices of the privately owned meters have increased at the end of 2009 and are scheduled to increase at the end of this year. At the same time, revenue for the parking meter system has increased in the February to April span 20 percent over the same time last year (http://www.nytimes.com/2010/07/30/us/30cncmeters.html).
Add this to the fact that more than fifty percent of that revenue came from meters installed in neighborhoods outside of downtown, with more to come when prices increase, and it sounds good for the investors, particularly those well-connected, and bad for the rest of us.