How Toronto’s parking pricing contributes to pollution and congestion, wastes time, and robs Toronto of desperately needed revenue

A friend who lives in East Toronto is testing a new pay-as-you-go parking and insurance meter. He came to visit me last week downtown at College and University for a one-hour meeting. I told him he could park on a side street for $2 an hour (GreenP municipal street parking) or in the private parking lot under my building for $8/hr (IMPARK). Guess which parking option he preferred. Figure 1 shows a trace of his trip to visit me.

Figure 2 shows a close of up the final 39% of the distance he drove – all of it in fruitless circles to find a way to put his parking money in a City meter. Surely, 39% can't be typical can it? Can short trips engender this much waste? You bet it can. This trip should have been 5km, but was 8.25km.

Even closer, in Figure 3, you can see he cruised the block of Elizabeth between Gerrard Street and College Street four times! Who’s at fault here? The carbon-burning, single-occupant vehicle driver trying to save $6? Or the City he was so eager to give his $2 to?

Well, let’s think it through…

First, consider that my friend spent about 10-12 minutes circling for parking which made him late for our meeting (he ended up in the $8/hr IMPARK lot). That means that he valued his time at about $36 per hour since he was only willing to blow off 10 minutes to save $6. Others value their time less and circle more – you can count on it.

Second, my friend clearly would have paid anything between $2.01 and $7.99 for the hour he needed. So Toronto is throwing that revenue away on many thousands of high-demand parking spots every day. I assert that with proper pricing Toronto would dramatically increase its parking revenue. I wish they would – and start repairing some streets with the money. The arterial nearest where I live is a single pothole interrupted by islands of asphalt.

Third, my friend wasted a bit of gas and released a bit of carbon. Even if Global Warming is a crock, this is not something we want to be seen doing.

Fourth, my friend generated some congestion. Circling or parking is the greatest single cause of inner city traffic congestion.

Fifth, the additional congestion made him and the other cars around him (congestion begets congestion), burn even more gas, which has additional Greenhouse Gas and National Security implications (burning gas enriches hostile states).

So my friend wasted 10 minutes and some gas in his losing bid to save $6. He needlessly contributed a little extra to air pollution and will probably feel even worse reading this. Toronto suffered some additional pollution and congestion while losing a revenue opportunity of, say, $4 had correct pricing yielded a spot for my friend. Note that we are not only talking about the increment of pollution and congestion that my friend personally contributed, since his circling activity had secondary spillover effects for other drivers around him.

And this is repeated thousands of times every day. Add to that the “lucky winners” of Toronto’s parking roulette who are paying $2 instead of $4 per hour, the city is likely losing upwards of $250,000 per week-day or somewhere between $60 - $100 million per year. If such pricing encouraged a portion of these bargain-hunter parkers not to bring their vehicle into the city, but to use some other modality, that would only be an additional benefit. How many people would leave their car home to save $4 ($2 incremental fee per hour for 2 hours)? Likely 5-10% of the street parkers. And most of them would find another way to transact their business.

Far from a virtuous circle, under-priced parking in a congested city illustrates how the seemingly innocuous actions of many single individuals can add up to large negative outcomes. The cumulative size of revenue loss to our city, the unnecessary environmental impact to a City that lays claim to green leadership, and the direct contribution to the daily grind of congestion beg to be addressed. I assert that Toronto could dramatically improve inner-city traffic flow and reduce emission volumes by increasing its parking charges to the Shoup-optimum of 15% vacancy. Considering the spread between the cost of off-street parking and underpriced on-street parking, the City could easily double it parking revenues – at least in the downtown core.

One irony in all this is that parking metering was not originally designed to raise revenue for cities, although it is doing that now. It was designed to be sure that retail employees did not take the best spots in front of the store, thereby discouraging shoppers. But that purpose only remains appropriate in some places and at some times, and as soon as low-priced street parking is available near storefronts it fills up thereby defeating its own purpose.

Setting a proper parking price, i.e., more than $2 on a street next to an $8/hr lot would free up spaces for short-term visitors, making those visitors happy, saving time, saving fuel, reducing congestion, reducing pollution and swelling city coffers. Correct pricing of street parking leaves almost everyone a winner especially the City and its property tax-payers.

Wait!, you say, what about those people who circle and get a $2 space and therefore are more likely able to visit a shopping area in Toronto to transact business. Isn’t that good? Not so much. Each such lucky person in the parking lottery pays a price for the uncertainty, the circling, the extra gas, the extra walk, and the lateness and the rush. Each one contributes to congestion and pollution, as the majority of them are “entitled” to park their SOV at the lowest price. Underpriced parking carries a small, transient benefit to individuals who happen to be lucky on a particular day, but it carries a large societal detriment to all of us each day, every day.

Any Mayor in any city in any country on our planet can green his city while contributing to its coffers. No program to raise tens of millions for a city could be saner – and its way, way better that increasing property taxes.


ian said...


Why does this Blog not surprise me, there are two problems with the way drivers think, and that is paying for parking is a crime and that those who charge for parking are criminals. Parking can generate a great deal of anger and emotion sometimes leading to violence.
The technology demonstrated by this Blog allows a calculation to be made showing the additional mileage driven which becomes quite frightening if you multiply it by the thousands of vehicles worldwide who are doing exactly the same thing. The pricing is definitely the wrong way around, On Street parking should be cheaper than Off Street parking although in this case with the car park controlled by a private company it does mean raising the On Street price to over $8 which is more expensive than the price in Westminster and frankly unlikely.
If you can get the pricing right then what I have done in the UK is to set up a website www.carparks4u.com which allows drivers to seek out an Off Street parking garage in the most suitable location and at the best price, then where I have the exact location of the entrance they can send that location to their TomTom or Garmin as a “Favourite” and be taken directly to the chosen parking garage.

Robin Chase said...

It is curious how legacy pricing leaves us with pricing value reversed. On street parking (faster in, faster out) is almost more valuable than garage parking and therefore should be priced higher.

One exception is when it snows.

Sean said...

This person should of taken public transit - driving downtown is what causes congestion and pollution

michael webster said...

Maybe the answer is to have a GPS monitor on the side street parking, so you know before hand whether to look around or not?

Bern Grush said...

Sean: We needs cars as well as transit. In Toronto a round-trip on the subway is about $5, especially if you do not have a monthly pass, which you wouldn't if you already own a car. If you are taking a short 12-min, 5 km trip (which for my friend was a choice between bus-subway-walk ($5, 40 mins) or drive-park ($2,12mins), AND if you owned a car, which would you do?

But, wait, my friend actually ended up with a drive-circle-park ($8, 22mins) trip. So he would have saved $3 for the extra 18 minutes (or $10/hr). Perhaps he thought his time worth more even if he lost the gamble (which, in the end, he did).

In more advanced forms of urban civilization, transit is charged based on distance, so my friend’s short bus-subway trip might have been $1.50. That would likely have changed things for him – it would have for many.

Sean, it is ALWAYS about money. Most people (and congestion-pollution is “most people”) make wallet-based choices, not “nice-green-urban-sainthood-choices”. The exceptions are so few as to not register on the screen.

Please stay car-free, as I suspect you are, unless you are an urban-saint-radical, ‘cause, we don’t need any more parking circlers.

Bern Grush said...

Robin: Absolutely. Many systems that were perfect when established such as gas-tax in 1919 have long outlived their "correct" or optimal architecture and need to be revised.

Donald Shoup wrote over 700 pages exhaustively explaining why the 1930 model of using parking meters to keep a 10-cent spot open for the missus in a Model-T to buy a pair of $4 shoes, is long in need of overhaul.

Now when the missus comes by for $200 shoes, she's in an Escalade, but now she can't find a spot for $2 ($0.15 in 1935 dollars).

Bern Grush said...

Michael Webster: Very close! But putting infrastructure on the street is EXPENSIVE and subject to vandalism (ask any parking manager). It is now possible to find a parking spot for you (without the circling) using the same meter my friend was testing. AND it is anonymous, so you cannot be tracked.

How cool is that?

(Hint: Only as cool as the city that tries it out.)

Tom said...

If he rode a bike it would have taken 15 min (@ an easy pace 10 mph) and cost $.00 for parking and gas.

So the difference would be 3 extra minutes and save $2.00 ($40 p/h). Since he values his time at $36 p/h this is a better solution.

This analysis of course does not place a value on the pure joy that your friend would experience for the 15 minutes on the bike.

tono-bungay said...

In Ottawa, the city charges $3.00 an hour everywhere, on and off the street, long term and short term. Has any city tried multi-tiered street parking? Some spots could $2 and fill up quickly, some could be $4 and often be available, and some at $8, always available for the more desperate. Then there is the illegal parking fine, $30 divided by the probability of being caught.

Bern Grush said...

Tom: "If he rode a bike..."

For those than can and are inclined, yours is by far the best approach. Actually it would be a good approach for anyone who can, whether inclined or not, for health reasons.

BUT - I assert that with Toronto potholes the size of a small bike (potholes that could be fixed with the flood of parking money being left on the table), there is no way I would bike out there (I am 60).

But my "twin brother" bikes in The Hague...

Here's to the elusive bike-friendly Toronto...

Bern Grush said...

tono-bungay: "Ottawa $3 everywhere..."

What is the effect on circling in Ottawa? I'd love to place a couple circling meters in Ottawa to find out.

I love the tiered-idea. Sorta like seat pricing on the airlines. I first described this for transit lots in '03. Cheap spots waaaay in the back for students, expensive spots right up by the door for the less young and less financially challenged. Fair, convenient, affordable.

I have seen good ideas from you in some other venues. Wish you would write me at Skymeter... Who knows.

michael webster said...

The Toronto Parking Authority does hold public meetings.

Have you tried to put these ideas in front of the Board?

You should get a lot of play for any scheme which reduces property taxes by increasing property rights.

Justus said...

Also: taking the bus/subway is fixed (beforehand you have a high certainty in both the money and the time it will cost you) but taking a car is much more variable. We have a tendency to be overly optimistic about most outcomes in life, so it should surprise us that most people -- especially when going someplace they don't travel to every day and can't judge probabilities well -- assume optimistic outcomes from driving.

@Tom: it also doesn't count the high levels of anxiety that cycling in most cities cause people.

Srilekha said...

The root cause is -

MaRS (College and University) for a one-hour meeting

Can't this meeting be done on a phone or do a video conf ? Okey I know that you need to be in person, probably in a business suite for a meeting but think once again do we really need it to happen in person

A small change in work culture could show dramatic difference.

If you ask me Parking should be allowed only for the following

Mass Transit Hubs

Small Video Conference Rooms should be made available in public areas like libraries etc etc so instead of driving downtown one could drive to nearest library and make a call.