By Ali Barsamian
“Hey Siri, can you give me directions to dynamic pricing?”
Pricing parking appropriately in cities has long been a puzzle for transportation planners. As urban congestion grows and the demand for curb space increases, cities are challenged to find efficient ways to manage their parking resources. While some cities are just beginning to implement static parking pricing models, the conversation is evolving quickly toward more sophisticated, demand-based approaches. But how do cities move along this road—from static pricing all the way to dynamic pricing?
“To begin, head west toward static pricing”
For cities just beginning to charge for on-street parking, static pricing is often the first step. Parking rates are consistent across time and location and set for an entire service area. This approach is easy to implement and helps cities introduce the concept of paid parking to their residents. However, static pricing often fails to address varying levels of demand throughout the city, leading to inefficient space utilization.
The challenge with static pricing is that it treats every space the same, regardless of location or time. In high-demand areas, spaces may fill quickly, while less busy neighborhoods might see spaces go unused. Cities may begin to see that this simple system can be improved by targeting pricing to match local conditions.
“In 1,000 feet, turn right toward pricing by zone”
The next step in the evolution of parking pricing is implementing variably pricing by location. Cities begin to adjust rates based on zone, charging more in areas with higher demand. For example, parking downtown during business hours might cost more than parking in a less congested neighborhood.
This zone-based pricing helps ensure that high-demand areas experience turnover, and it pushes drivers to park in underutilized spaces. However, this system is still somewhat static because the pricing for each zone is typically set for at least a year, and the city might not be able to adjust rates on a short-term basis.
“Just ahead, keep left toward variable pricing by time”
After pricing by zone, cities can adopt variable pricing by time, adding a new lever to the pricing strategy. In this model, parking rates are set higher during peak hours and lower during off-peak times. For instance, a city might charge higher rates in the evenings near restaurants and entertainment areas or during business hours in commercial districts.
By using time-based adjustments, cities can better manage their parking supply based on known patterns of demand. However, similar to pricing by zone, these rates are still fixed for a defined period, and adjustments typically happen annually or less frequently.
“In half a mile, use the second lane from the left to turn to demand-responsive pricing”
As cities move further along the pricing road, they can begin to implement demand-responsive pricing. This system allows cities to periodically adjust rates based on parking demand data, usually shifting rates seasonally or quarterly to better reflect usage trends. For instance, a city might raise parking prices in a popular shopping district during the holiday season or lower rates in underutilized zones after observing sustained low demand.
Demand-responsive pricing encourages drivers to park in less congested areas, freeing up space in high-demand zones. Cities often rely on pre-approved rate ranges they can switch between throughout the year based on the data they collect on parking patterns. This model brings cities closer to a dynamic pricing system but still lacks real-time flexibility.
“Your destination is approaching, dynamic pricing is just ahead on the right”
Finally, the future frontier of parking pricing is dynamic pricing, where rates adjust in real time based on current demand — imagine “surge pricing” for curbs. With dynamic pricing, cities require real-time data on parking occupancy, allowing them to shift rates immediately by time of day, location, or demand level. This creates a responsive system where parking spaces are always priced to reflect their true value at any given moment.
Dynamic pricing is an incredibly advanced approach and requires sophisticated technology, including sensors, smart meters, and powerful data analytics. While most cities are not yet ready to implement this system, dynamic pricing offers a vision of the future—one where cities can seamlessly manage parking supply, reduce congestion, and create a better experience for residents and visitors.
“What you’ll need on your trip”
Each stage in the evolution of parking pricing requires cities to gather and analyze increasing amounts of data. As cities progress from static pricing to more sophisticated models like demand-responsive and dynamic pricing, having access to comprehensive parking data becomes critical. Parking Insights provides cities with the tools they need to gather, analyze, and act on parking occupancy data. Whether a city is ready to implement demand-responsive pricing or is looking to make the larger leap to dynamic pricing, they can be provided with the insights and infrastructure required for success. With the right platform, cities can track parking occupancy, identify patterns, and adjust pricing models to optimize space utilization and revenue.
The Road Ahead
The path from fixed pricing to dynamic pricing may seem daunting, but cities don’t need to travel it alone. By leveraging data and digital tools, cities can evolve their pricing strategies step by step, moving toward smarter, more efficient parking systems. Are you ready to explore the future of parking pricing?
Ali Barsamian is the Vice President of Growth with Populus. Ali can be reached at ali.barsamian@populus.ai.