Keeping the curb vacant

Official URL: https://dx.doi.org/10.1016/j.trc.2024.104669

Implementing a curbside parking pricing strategy that intentionally leaves certain spaces vacant may seem wasteful, but it can offer advantages for a city. This strategy diminishes the time drivers spend searching for parking, thereby mitigating traffic congestion, air pollution, and other negative externalities. However, there is an additional rationale for keeping some curbside parking spaces unoccupied that is unrelated to negative externalities. In urban areas, parking markets often constitute mixed oligopolies wherein curbside parking is publicly operated, and garage parking is privately operated, each with limited capacity. Multiple pricing equilibria exist in such markets. In the equilibrium yielding the highest welfare, certain curbside parking spots remain unoccupied. The city refrains from reducing the curbside parking fee to occupy all available spots, as this could diminish the utilization of garage parking and potentially lead to increased garage fees, thereby reducing overall parking capacity utilization. In essence, maintaining some unoccupied curbside parking spots can serve as a safeguard against private operators creating contrived scarcity and exploiting their market power.