Parking cash-out is a policy in which an employer that subsidizes employee parking offers workers the option of taking the cash value of that subsidy instead of the space. Employees who keep driving are no worse off; those who walk, bike, take transit or carpool receive the money.
Free workplace parking is a benefit only drivers can use. Cash-out makes the benefit equal for every commuter and reveals the true cost of the space. California has required certain employers that lease parking to offer cash-out since the early 1990s, and studies of employers that offered it found meaningful reductions in solo driving.
How it works in practice
- Applies most easily where employers lease parking and can reduce the number of spaces they rent.
- The cash payment is typically taxable income, while parking provided as a benefit may not be.
- Works alongside transit passes, bike facilities and carpool programs. See TDM.
- Pairs naturally with unbundled parking in leases.
The Parkonomics view
Cash-out does not take parking away from anyone. It simply stops paying people only if they drive, which is often enough to change how they commute.
Related terms: Transportation Demand Management, Unbundled Parking, Parking Minimums, Parking Maximums, Shared Parking