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Why It’s Fair to Save a Parking Spot – For a Price | Harvard Business Review

But is this fair?

Is it ok, for a fee of $2.25, to “save” a parking space that you’ve paid for? What about saving a space for a family member or friend at no charge? These answers to these questions are really subjective. I will point out, however, that it’s axiomatic for a secondary resale market to emerge for any product that is priced below-market. Examples of this are in-demand sporting or music events that are routinely resold at higher prices through the scalper market.

The bigger question is whether meter rates should be so low that it incentivizes people to drive into the center of town (instead of taking public transportation) and then incur the time, frustration, and extra gas to find a cheap parking spot. Don’t even get me started on the wasteful pollution generated throughout this process!

In other words, though, is it a right of all citizens to have access, albeit inefficient access, to rock-bottom priced parking? I don’t think so – I vote for jacking up meter prices and investing in public transportation improvements.

And when you think about it, Haystack represents an incredible value to parking spot seekers. A $3 fee secures, for instance, $1.25 an hour parking in Boston instead of paying $12 at a garage. And then, if a driver uses Haystack to “re-sell” their space, they’ll reap $2.25. Thus, a net price of 75 cents enables drivers to save a bundle – seems like a bargain to me. Perhaps Haystack should boost its prices!

So what should local governments do about Haystack?

Officials, for instance those in Boston, need to stop being so status quo and allow technology to better serve their residents. Haystack exists because city officials have done a poor job of pricing parking spaces. Instead of needlessly obsessing on Haystack, cities should start dynamically pricing parking meters based on demand: increase rates during peak times and conversely, discount during periods of low demand.

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Why It’s Fair to Save a Parking Spot – For a Price.