A Tale of Two Cities' Parking Spaces

Two cities, one problem, two solutions. The cities are San Francisco and New York City, and the problem is the traffic engendered by drivers circling around looking for a parking spot. A start-up in New York City has set up a system whereby people vacating a free spot can send out an alert, and someone on the other end can pay five bucks to claim the soon to be available spot. The City of San Francisco, on the other hand, just did its first parking space census, and is rigging its whole system to make space availability available in real-time; but the special sauce in all this is the data collection, which will eventually allow them to make parking rates more efficient and higher.

The perversity of all this is that, even in two of the most expensive real estate markets in the country, where land trades at such a premium when it relates to human use, you can find patches of that same land to use for free for car use. Which leads to wildly inefficient behavior with all sorts of negative externalities: in the hunt for the scarce resource that is free parking, drivers add all sorts of costs to those around them via the emissions they belch out and the congestion they add to as they circle endlessly. Price that correctly via higher and more market-sensitive rates, and everyone wins.