GLOSSARY

Dynamic Pricing (Parking)

Dynamic pricing, or demand-based pricing, adjusts parking rates by time, location, event or occupancy to manage how full parking is and how much it earns.

TARGET ~85% Meter price 050%85%100% BLOCK OCCUPANCY HIGH LOW PRICE
Illustrative: demand-responsive pricing holds the rate low while spaces are plentiful, then raises it as a block fills, aiming to keep roughly one space open. Modeled on SFMTA’s SFpark; not specific rate data.

In public parking, the usual goal is a target occupancy rather than maximum revenue: raise rates where blocks or garages are too full, lower them where spaces sit empty, so that a space is usually available. San Francisco’s SFpark program, launched in 2011, adjusted meter rates periodically by block and time of day based on measured occupancy and became the model for many cities. Private operators use dynamic pricing for events, commuter peaks and reservation channels.

Try it
Price the block

Twenty curb spaces on a busy downtown block at 1 p.m. Slide the meter price and watch who parks, who circles and what the block earns.

When curb parking is free, more drivers want the block than it can hold: all 20 spaces fill and several cars circle waiting for one to open. Around $2.50 an hour the block runs about 85 percent full, so arriving drivers find a space on the first pass and nobody circles. At $6 an hour more than half the spaces sit empty and nearby shops lose customers.

Illustrative demand curve for one block at one hour. Real blocks differ, which is why cities that price for occupancy adjust each block and time period from measured data.

Forms of dynamic pricing

  • Scheduled. Rates set by time of day and day of week, adjusted periodically from data.
  • Event pricing. Flat or tiered rates for games, concerts and peak days. See flat fee pricing.
  • Real-time. Rates that move with current occupancy or bookings, most common online.
  • Channel pricing. Different rates for reservations, aggregators and drive-up customers. See parking aggregator.

Keeping it fair

  • Publish the rules and the target, and change rates in predictable steps.
  • Show the rate before the driver commits, at the entry or in the app.
  • Protect monthly customers and validation partners from surprise changes.

The Parkonomics view

Price to the occupancy you want, and publish the logic. Dynamic pricing works when people can see why the rate moved; it fails when it looks like surge pricing on a captive customer.

Related terms: Parking Rates, Flat Fee Pricing, Congestion Pricing, Dynamic Tolling, Parking Turnover, Parking Occupancy, Cruising for Parking, Parking Meter