
Lyft’s Radical Experiment in Charging for Free Parking - victorvation
https://www.bloomberg.com/features/2017-lyft-parking-experiment
======
julienb_sea
This is quite bizarre to me. In city centers, very few if any office buildings
in any industry offer free parking. My company in Seattle will subsidize our
~280/mo parking by 100. I have never heard of a building in downtown Seattle
charging under 200 a month for parking, even outdoor surface lots are around
200 monthly. Is it not a bit obvious that free parking dramatically encourages
driving over public transit? Parking demand must grow as a company grows,
while its parking structure generally is fixed. Increasing the cost is the
only way to effectively manage the situation.

The alternative from my company versus the parking subsidy is a free unlimited
public transit card. Most people choose to take either light rail or bus, and
choose their living situations so as to take advantage of those options.

~~~
closeparen
The city center of San Francisco (for public transit purposes) is a small,
eastern portion of the Market St corridor, several miles from the site being
discussed.

------
obilgic
What if experiment is conducted like this:

1\. 53 top bidders pay and get their spot.

2\. total money collected is shared between everyone who doesn't park

~~~
Grustaf
1b. Renormalise bids based on each employee's salary.

~~~
Nav_Panel
Then an enterprising but low paid employee can rent their spot to a more
highly paid employee and make a solid profit.

~~~
acjohnson55
Great! Why should rent-seeking be reserved for the rich?

~~~
Nav_Panel
We should seek to find solutions that eliminate rent-seeking altogether...

------
sharkweek
My wife's company just pays people bonuses to take the bus/ride a
bike/walk/run/whathaveyou to work. Employees get a small bonus literally every
day they utilize alternative transportation. It's not much for each commute,
but over the course of a month, it ends up being a few hundred bucks for some
people. My wife used to drive to work, but is now riding her bike. I am 99%
sure she loves the bike commute so much now that she wouldn't revert back even
if the small bonus got taken away.

~~~
hycaria
It's great ! But it's also very saddening that people need incitation from
companies to stop driving to work and can't make such healthy, environment-
friendly decisions themselves.

~~~
tomjen3
Driving is awesome, I am way better protected in the event something goes
wrong, and I don't have to care about the weather.

This isn't popular here, but I have been indoctrinated by environmental
bullshit as a kid and teen and I am done with that. I pay high gas taxes and
if that can't more than offset the environmental impact whomever is in charge
should be fired for incompetence.

~~~
epistasis
>I pay high gas taxes and if that can't more than offset the environmental
impact whomever is in charge should be fired for incompetence.

Edit: comment predicated on the assumption that this is in California, where
Lyft is located

No, you don't pay high taxes, and second, political forces are such that gas
taxes can not be raised to what they should be to prevent your "firing for
incompetence." The politics don't work that way.

------
sfaruque
Just an observation: Why aren't Lyft's employees using Lyft's ride-sharing
service to get to work?

I know that's not the point of the article, but if your company owns ~25% of
the market share [1], wouldn't it make more sense to instead give your
employees "Lyft credits" (or whatever it's called), and have them use the
service on a near-daily basis.

[1] [https://www.usatoday.com/story/tech/news/2017/06/13/uber-
mar...](https://www.usatoday.com/story/tech/news/2017/06/13/uber-market-share-
customer-image-hit-string-scandals/102795024/)

~~~
CaliforniaKarl
Personally, I think Lyft credits would be bad, for a number of reasons.

First off, I'm pretty sure that the value of the credit would be taxable, in
the same way that wages are taxable.

Specifically, see IRS Publication 15B Section 2, the sub-section on
Transportation (Commuting) Benefits
([https://www.irs.gov/publications/p15b/ar02.html#en_US_2017_p...](https://www.irs.gov/publications/p15b/ar02.html#en_US_2017_publink1000193740)).
Lyft credits don't to me appear to be one of the four "Qualified
Transportation Benefits" (although paid parking _is_). Nor would it be a de
minimis benefit.

(To be clear, I'm talking US tax law, as a US corporation.)

So, if it's going to be taxed, then you (as the Lyft employee) now have
something which you _have_ to use, or else you're going to lose money (in that
you've paid taxes for a benefit you're not using). That's a pressure that I'd
personally not want to be under.

Similarly, I wonder if a permanent discount (all Lyft employees get 50% off)
would also be taxable. Since this is all electronic, I don't think it would be
that hard to track an employee's Lyft usage, so I don't think the de minimis
exception would apply here. Then, come each paycheck, I'd have to remember
"Oh, right, I have less money this pay period because I did all those extra
Lyfts over the weekend."

Continuing the thought experiment, if Lyft did do this, then I most definitely
would _not_ want to work or live near Lyft's offices. The reason is, any time
I'd want to use Lyft, I'd be competing with all of the Lyft employees who are
also using the service. I could see that increasing the chances of surge
pricing switching on. That could maybe be minimized by nudging drivers to
congregate around Lyft's office, but that would then deprive other areas of
drivers.

So too many problems, in my opinion.

~~~
ubernostrum
_Lyft credits don 't to me appear to be one of the four "Qualified
Transportation Benefits"_

Lyft and Uber have already solved this. They've partnered with a bunch of the
employee-benefit debit-card providers so that people can use employer-provided
commute benefits. The guidelines as I recall from when I saw it announced are
that you have to use Lyft Line/Uber Pool and vehicle has to have at least 6
seats, and both Uber and Lyft have tweaked their apps to ensure that they
recognize benefit-debit cards and only let you use them on rides that meet IRS
guidelines for commute benefits.

~~~
CaliforniaKarl
Ah! I see, and yes, that would qualify in the "Transit Pass" section, although
it's really at least seven seats (the driver can not occupy one of the six
seats). More specifically, it's "In a vehicle that seats at least 6 adults
(not including the driver)".

It seems the details are here: [https://help.lyft.com/hc/en-
us/articles/115002073608--Line-C...](https://help.lyft.com/hc/en-
us/articles/115002073608--Line-Commuter-Benefits)

That makes me wonder, although the problem is solved from the technological &
regulatory sides, how many of those types of vehicles are there. I guess
that's why this option is only available in four cities.

------
CalRobert
Relevant to a lot of people here -

California's Parking Cashout law requires your employer to reimburse you what
they would spend on your parking if you don't use it. This applies in the
(somewhat narrow) situation where you not parking has a direct impact on what
the company spends - i.e. they rent a spot in a garage.

When I worked in Santa Monica it was a couple hundred bucks a month - cycling
was nicer anyway, too.

[https://www.arb.ca.gov/planning/tsaq/cashout/cashout.htm](https://www.arb.ca.gov/planning/tsaq/cashout/cashout.htm)

~~~
SilasX
So wait, employers have to track how you get to work each day? Or just
classify you as "always" vs "never" parking?

~~~
CalRobert
You just don't get the spot. In my case I just didn't get the card that
enabled access to the garage. It's not applicable where the employer just has
one big lot and isn't paying per space, generally.

------
hazelnut
The story telling and gifs are really outstanding. Congrats to Bloomberg.
What's not so nice is ... it's completely not accessible. If you achieve that
- hats off

~~~
dr_hooo
I liked the concise way the story was told - the text was short, to the point,
without much fluff. On the other hand, I was actually a bit annoyed by the
whole comic thing: why is a comic necessary to present a rather simple idea to
an adult - tt felt kind of condescending. The drawings didn't really add
anything to the story, and I found the animations distracting. ...now get off
my lawn :)

~~~
kaybe
I wish the animations could be switched off. They're distracting and don't add
anything.

Didn't we just have that discussion on the compression thread?

------
Nav_Panel
This is not a very radical idea. It is known that people are averse to losing
things they already have (even in exchange for equal or greater benefit). I'm
glad it worked out for Lyft without too many ruffled feathers, at least
according to the comic. I'm glad this sort of idea continues to get media
exposure. It needs it.

An example, it is absurd to me (and most urbanist types) that Manhattan still
has free street parking and that all the East River bridges are free.
Congestion pricing in Lower Manhattan was on the table during the Bloomberg
era, but never made it through. It should have.

~~~
blacksqr
Congestion pricing proposals for publicly-owned infrastructure always run into
the same problem: taxpayers paid for the building of the infrastructure, they
already own it. Charging what the market will bear effectively turns the
infrastructure over to the relatively wealthy to use. Making people watch as
the rich get exclusive use of the infrastructure every taxpayer paid for never
goes over well.

~~~
TulliusCicero
But what if charging what the market will bear means the rich are paying for
the cost of the thing _and then some_?

Anyway, my impression is that opposition to things like congestion fees come
more from affluent commuting suburbanites than the poor (who probably already
rely on transit anyway).

~~~
kaybe
Doesn't help if I don't get to use it..

~~~
TulliusCicero
But what if you don't need to because the money goes to fund alternative
methods?

~~~
blacksqr
Will those alternative methods also be congestion priced? Are you just setting
up an infinite regression?

If there's broad demand for increased capacity, why not just raise everybody's
taxes to pay for it, and let everybody use it?

~~~
Nav_Panel
No, because the point is that cars specifically are Pretty Bad for cities
(noise, air quality, inefficient use of space, dangerous) and should be
discouraged (and economic incentives work). Mass transit is generally far less
bad and should be encouraged by economic means.

NYC sort-of does this by not using zone fares, so long trips from far-away
areas (read: poor parts of the city) cost as much as a brief trip through a
rich area.

------
rgbrenner
The facebook character had the right answer. These companies have products
that create more value than running a paid parking lot... why would you trade
an employee on a product like that for a few dollars in parking fees.

~~~
johnhess
The point of the article is that by making something scarce free, the company
was in effect "rationing by the queue", an inefficient way to handle things.
Those unwilling to get there early had a bad time.

Instead they said, "Hey, we were giving the average employee $100/mo in
parking. We're gonna keep doing that in the form of cash. But, to fund that
extra 100 you're now getting in cash, anyone who wants to use the lot has to
pay its market value." In short, instead of providing a "flakey parking
availability" they provided cash. It's a lot (a lot... get it?) like selling
the lot and giving the proceeds to employees.

This isn't always the best idea (sometimes, similar schemes can be socially
unjust), but from an efficiency standpoint, it's hard to beat.

I hear what you're saying about pissing people off, but this should do the
opposite. Sure, some folks might irrationally like jockeying for position or
be early risers. But the company never intended to say "this benefit is for
early risers". The intended it as a benefit to all employees and now it is.

~~~
revicon
The parking spots were not "free", employees were paying for them with their
time, leaving their homes extra early and risking circling the neighborhood
looking for extra spots if the lot was full. That time was worth money to the
drivers and the growing price of a spot was evidence of that.

As they increased their employee count, the time cost would have increased as
well and employees unwilling to spend that time on trying to get parking would
take another mode of transportation. From the linked comic it sounds like the
employees that spearheaded the program were trying to prove a larger point
that cities could raise public transit funds by charging for all parking
spaces in a city. I don't think this program was at all about making things
more efficient at Lyft.

~~~
surfmike
It was also about making things more efficient at Lyft. Some people really
needed cars (mostly because they had kids) but couldn't find spots unless they
arrived super early. This change pushed some people to stop using their cars.

------
mreome
Why not just treat the assigned parking a standard perk (considered in the
overhead cost of an employee) and offer a cash bonus to those who elect to not
have a spot? That would maintain the perception of the parking being free,
while allowing for a reduction in usage based on the same value assessment
described in the article.

~~~
bradstewart
That's how a number of companies in Austin do it.

------
brian-armstrong
I think a big issue with parking is that people might not even consider that
there are alternatives to driving. The car is just a little too comfy. But if
everyone is so far from work that they need to drive to get there, that
creates so many congestion and environmental issues. This seems like a real
weak spot for our culture.

------
FullMtlAlcoholc
Am I crazy or is it ridiculous that a ride-sharing company didn't give their
employees free Lyft credits to alleviate the situation? You would think that
would be one of the perks of working for Lyft. I am also confused as to why it
was called free parking. Is employee parking not considered as part of
compensation? I've worked at offices before that used public lots and the
employer purchased parking passes for everyone.

Also, a bit off topic, but biking is not a panacea for everyone. I tried
cycling my 18 mile commute along the PCH for 1.5 years. By the end of it, I
was really turned off by biking. I like to play basketball, hike, and go open
ocean swimming. I finally quit cycling to work because I had dead legs due to
musclr fatigue and couldn't enjoynmy preferred recreational activities.

Also, I sweat very easily. Luckily my office at the time had a shower.

~~~
kelnos
> Am I crazy or is it ridiculous that a ride-sharing company didn't give their
> employees free Lyft credits to alleviate the situation? You would think that
> would be one of the perks of working for Lyft.

I'm surprised that/if they didn't have that perk before the parking brouhaha,
but even if they didn't, non-parkers got $150/mo just for not parking there,
so they could certainly spend that on Lyft rides.

Though considering that a month is around 23 working days, that means they
only have a little over $3 per ride, which won't get them to and from work
every day in the month... unless they take Line and live within walking
distance anyway...

~~~
FullMtlAlcoholc
Even though it seemed to work out overall for the company, it seems like
employee carpooling via Lyft Line would be a less risky solution, especially
at the end of the day when you all can be picked up at the same location.

------
shahbaby
It "worked" because people paid or found an alternative? Who's going to quit
their job over parking?

Seems like the standard formula for a business news article now is to
repackage common sense ideas as something new and exciting.

Charged for parking? Let's make a comic about how innovative that was.

~~~
ajhurliman
Not really, if they're free and you just randomly give them out then it
doesn't allow the power of the market to sort out who really wants a spot vs.
who doesn't really care.

~~~
shahbaby
How is paying with money any more fair than paying with time?

I'd personally prefer random distribution over selling to the highest bidder.
Does every single thing really have to be for sale?

~~~
lmm
Money isn't consumed, the money paid can be passed out to other employees as
raises. Whereas time spent waiting in line is a dead-weight loss. (Ok, it's
not a 100% loss since you might be able to do something somewhat fun with that
time, e.g. maybe you listen to a podcast while you're sitting in the parking
lot. But it's not an ideal way to spend your time, and there's no way for
anyone to get their time back)

------
jacobr
Gave me an idea of dynamic pricing for public parking, like the surge prices
of ride sharing services. Maybe this already exists somewhere?

If there are only a handful spots left, the price would be really high. If a
parking lot is not that popular it will automatically be cheaper.
Environmentally friendly cars could get a discount.

Instead of reserved parking spots, the spot would know for instance if it's
never used during working hours and the prices would adjust to optimize the
fill rate of all spots. Residents would get a discount for spots close to
home.

I guess most cities have zones with different fees, and often free parking on
weekends and nights. This would instead adjust it automatically, maybe even
adjust for popularity of a particular group of spots.

~~~
TulliusCicero
IIRC San Francisco has experimented successfully with dynamic pricing.

The main problem with such initiatives is that most drivers reflexively
despise them, and will create a big political stink.

------
tixocloud
Tolls continue to represent an effective way of managing congestion in large
cities but it's only if the community will be willing to accept it. Better
transportation alternatives need to be provided in addition to the
introduction of tolls to appease everyone.

------
mc32
Doesn't the university down the peninsula charge everyone monthly/yearly
parking fees to reduce driving and encourage people to take public
transit/bike or live on campus?

Most FinDi commuters have to pay for their spots. It's widely used and well
known stick to get people to carpool or take alternative means to work.

~~~
CaliforniaKarl
It's Stanford, and yes to most of that, but no to the "live on campus" part.
8-)

------
brwnll
With so many companies offering employees public transportation passes for
commuting, I'd love to see Lyft/Uber create the ability for employers to offer
free/reduced fare office commutes (within a determined range). AFAIK the only
option they have is to give blanket monthly credits.

~~~
misingnoglic
My girlfriend is starting a PhD at UCSF, and if they have to commute between
11pm and 6am the school will pay for the Uber/Lyft ride up to a certain
amount. I'm not sure how it's facilitated but it's a good idea for sure.

------
ryan-allen
In the City of Melbourne in Australia, most parking that you could use all day
is not free. You can either get in by 10am and pay $20 per day, or pay around
$100 per day if you arrive after that. There's still heaps of cars in the
city.

------
mahyarm
You need about $250 minimum in credits to make a $12/day commute viable via
lyft line. If they gave everyone $250/month in credits, I bet the parking
issue would of reduced itself significantly.

------
brianpan
Obviously parking is not free. You can just look at the paid lots all around.
Or look at the assessment of the headquarters purchase.

You might as well "investigate" whether free work shuttles are actually free.

------
chrissnell
Had an idea while reading the story: if I worked for Lyft during that time, I
would have created an app that made it simple to rent out your "owned" spot to
fellow employees. It would be easier and faster than the Facebook group, with
built-in payment.

The cost for the app? Parking space owners have to let me use their space for
one workday a year, with a prearranged date of my choice. If everybody signed
up, I would have a space almost every day, free of charge.

~~~
mfkp
Do you mean "let me use their space for a week"? There's only 53 parking
spaces, and approximately 260 working days per year.

------
noahmbarr
This program isn't free for Lyft -- @ 1,000 employees and $375/space/month for
each of the 53 spaces, the monthly program cost is $35K per month (with the
subsidies net of revenue), or 420K a year in cash burn!!!!

IMHO, they'd be better off shutting down the lot and using it as a picnic area
/ common area for everyone to enjoy.

~~~
djrogers
I’m not sure I follow your numbers or your logic - Lyft charged their
employees, where is the $35k/mo cost to Lyft coming from?

~~~
gwern
Presumably that's originally coming as part of the total cost of renting the
building+mandatory parking lot. :)

------
pouetpouet
some cities experiment with dynamic parking pricing [http://sfpark.org/how-it-
works/pricing/](http://sfpark.org/how-it-works/pricing/)

------
nsarafa
Love the animated comic format of this post. Well done, Bloomberg

------
CaliforniaKarl
I work at "the university down the peninsula"
([https://news.ycombinator.com/item?id=14975881](https://news.ycombinator.com/item?id=14975881)).
Stanford—in my opinion—has a similar situation.

We are affected by the "General Use Permit" ([https://gup.stanford.edu/the-
project/reference-documents](https://gup.stanford.edu/the-project/reference-
documents)) which, among other things, limits the number of parking spaces
that campus can have.

As a result, Stanford has a number of programs to encourage people to commute:

• Paying for a Caltrain Go Pass
([https://transportation.stanford.edu/transit/free-transit-
inc...](https://transportation.stanford.edu/transit/free-transit-
incentives/caltrain-go-pass)) and VTA Eco Pass
([https://transportation.stanford.edu/transit/free-transit-
and...](https://transportation.stanford.edu/transit/free-transit-and-
incentives/vta-eco-pass)).

• Running the AE-F
([https://transportation.stanford.edu/marguerite/aef](https://transportation.stanford.edu/marguerite/aef))
and EB
([https://transportation.stanford.edu/marguerite/eb](https://transportation.stanford.edu/marguerite/eb))
lines to the East Bay.

• Coordinating AC Transit for the two Dumbarton Express lines
([https://dumbartonexpress.com](https://dumbartonexpress.com)), and the U line
([https://transportation.stanford.edu/transit/free-transit-
inc...](https://transportation.stanford.edu/transit/free-transit-
incentives/line-u)) lines.

• Various car- and van-pooling options
([https://transportation.stanford.edu/rideshare](https://transportation.stanford.edu/rideshare)).

And there's also the various Marguerite lines (X Express & Limited, Y Express
and Limited, and S) that supplement normal service. There're also other things
that I've forgotten about.

All of those options are pretty well used, and it shows that for the main use
cases, it is possible to "charge for free parking", but I think the important
thing is that you do have to have some external constraint.

In Lyft's case, it was a lack of spaces. In Stanford's case, it's a negotiated
restriction. Either way, that avoids the "Facebook alternative", where you
don't have any outside reason you can point to.

The best example of this is the Stanford Research Park: If you're a Stanford
employee who works off-campus (and the Stanford Research Park counts as off-
campus), then you don't qualify for the $300 yearly credit, even if you use
bus/train/vanpool all the time (see
[https://transportation.stanford.edu/commute-club/about-
commu...](https://transportation.stanford.edu/commute-club/about-commute-
club/are-you-eligible)).

So I guess the lesson (or at least the correlation) is, you need some external
restriction, or else "most" people will drive!

------
noahmbarr
You can't pay for that type of advertising.

------
AndyNemmity
Demand is a fallacy because they compel you to come into the building.

If they allowed everyone to choose to work from home, or from another
location, then it would have something interesting to say about it.

But the demand is artificial in that context, forcing people to exist at that
office, and yet not allowing them the means to do so with their mode of travel
of choice by not providing sufficient parking.

~~~
dbaupp
> yet not allowing them the means to do so with their mode of travel of choice
> by not providing sufficient parking

They also don't provide a runway and hangar space, nor a marina, and probably
not a SpaceX landing pad either! People can't commute with their mode of
travel of choice!

Jokes aside, even ignoring the broader impacts of more driving and just
focusing within the company itself, providing limited free parking is
"stealing" from those who don't drive (the company is spending
resources/opportunity cost on something they don't use), and even on those who
_have_ to drive on certain days (they're pushed to getting to work at
ridiculous hours to be able to park). With offices where it is actually
feasible to commute by public transport (like Lyft's office which seemed to be
~0.5 mile from the nearest BART station and less from many bus routes) and
when working at a transportation company, there are alternatives to driving
one's own car, so putting a price on parking encourages people to treat it as
the scarce resource it is.

~~~
drivingmenuts
> providing limited free parking is "stealing" from those who don't drive

This doesn't seem right - it assumes that the resources going toward parking
would be otherwise spent on employees. If money was taken from employees as a
payroll deduction, then "stealing" might apply, but until the money is
promised to employees, its not employee money, it belongs to the company.
There is no theft that I can see.

------
ars
Asking me to pay for parking is the same as saying "please don't come here
unless you absolutely have to".

And that's exactly what I do - I almost never go anywhere that makes you pay
for parking. Downtown, or to visit congested cities for example. Or to small
stores on roads with parking meters.

Are those places happier without me? Maybe. Depends on if they value whatever
economic activity I would produce over their poor traffic management.

Would I use public transportation? After trying it for a while in a city that
is widely considered among the top 5 in the world for public transport my
answer is a resounding: NO!

Public transport is horrible, even when it is the best humans are able to make
it. I feel bad for those people who have no other choice, and I am determined
to never live in a city that requires it.

~~~
wyager
The only city in the world that I've been to that has what I would consider
"good" public transport is Hong Kong. In comparison, the NY subway system is
dirty, beat up, hot, infrequent, slow, and full of aggressive panhandlers.

~~~
rishabhparikh
I had a great time on Tokyo public transport (excluding rush hour on the
busiest lines, but even that was fun in a way).

