Tuesday, January 03, 2012

Pricing Parking

When to collect?
  • On entry
    • Increases entry time resulting in longer entry queues.
      • Bad idea when customers are anxious to get in and might negatively affect repeat visit rates especially during peak hours/days.
  • On the way out
    • Decreases entry time resulting in smaller entry queues.
    • Longer exit queues
      • Might be better than long entry queues?

What to charge?
  • Fixed Price
    • Simplest model.
    • Can be collected at either entry or exit.
  • Based on time (e.g., by the hour)
    • Can only be collected at exit as it is variable.
    • Uncertainty of price
      • Can be mitigated by limiting the maximum price and marginally increasing price over just a few time intervals (2 interval example: $x for 0-3 hours, $x+y for 3-10 hours where y is marginal).
    • Might influence customer behaviour to a small degree
      • Might incentivise customers to leave early
        • A  free for first x minutes policy might reinforce this.
  • Based on demand and supply (charge more when supply cannot keep up with demand)
    • Can be fixed or metered.
    • Can be collected at either entry or exit if it is fixed and at exit only if it is metered.
    • Might significantly influence customer behaviour
      • Disincentivises casual customers from coming during peek hours.


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