Why is Parking so Expensive?

Why is Parking so Expensive?

Taylor K.4th March 2019

Everyone that’s ever attempted to park in the city would know how costly parking can be. But does anyone really know why?

It has to do with the economic fundamentals of supply and demand. 

Just like with housing, there is more demand for parking in the city centre. Parking becomes more expensive for the same reason housing does. There simply isn’t enough space in cities to meet the demand for parking the vehicles of people that live and work there. 

As basic economic theory explains, the best way to remedy excess demand for parking spaces, is to increase the cost. Source: Policonomics

Unfortunately, this system has its flaws. For example, many car parks cap their costs once drivers have stayed over a certain number of hours. Say a car park has their spaces listed to increase in price every hour up to 4 hours, at which point the cost is capped and does not cost the driver any more for the duration of their stay. This gives the driver incentive to stay longer, rather than getting in and out swiftly, preventing another driver from using the space, and creating a loss in potential revenue.  

Source: Huffington Post

Other car parks do not cap their prices until 8 hours. These car parks are typically targeting those that work and park in the city daily. Many of these car park companies offer deals to incentivise people to drive over taking public transport, and to park with them rather than competitors. These deals usually reduce the cost of parking dramatically, sometimes allowing a driver to park all day for the same price as they typically offer 2 hours. Meaning while these car parks are appealing to those staying longer (if they are lucky enough to get one of the deals), they are unfavourable to the short-term parker as, without having attained a special deal, they would be required to pay a high price for the space. 

It seems like no one has really figured out the perfect way to control the supply and demand for parking in inner cities. That’s where Kerb is different. By allowing those not using their personal parking space to rent it out to others at an affordable price, Kerb is increasing the supply of cheap parking to aid the high demand for it.

If you want to find an affordable parking space in your city, download the Kerb app or visit www.kerb.works. Or, if you have a space that sits empty, whether it’s during work hours, over the weekend or permanently available, you could list it on Kerb for others to rent and start earning money from your car park. 

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