Parking Charges and The Prisoner's Dilemma

Submitted by JMB on Mon 30/Jun/2008

The contentious issue of charging Bristolians for on-street parking has been enough to drag the mysterious Bristol Blogger out of retirement. And with good reason: £40 quid a year per vehicle plus the hassle of having to arrange permits for visitors and tradesmen, and no guarantee that you'll be given permission by the council to park a second car. If this were declared as an increase in council tax, it would be equivalent to a minimum of 3% on every Band D household.

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As a local car owner, I don't like this policy, both because I'm already paying more tax than I want to, and because I don't believe that stringent council-led ticketing and control is the right way to solve the problem (although is it a problem? see below). My preference would be a wholesale mutualisation of non-trunk roads, to let individual home owners form friendly associations to manage their street, to define their own approach to parking control and to decide how much of their money to spend on up-keep. Wearing my small business hat, I'm already investigating the purchase price of high-density, small-footprint urban parking structures, which could be a potential area of growth regardless of how we choose to respond to parking.

Coming soon to Bristol

The trouble is that if just one area of the city did decide to go down the route of Parking Control, then the knock on effect would be to increase parking in neighbouring areas. This results in a city-wide version of The Prisoner's Dilemma.

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies ("defects") for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence.

If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

If all areas of the city vote against Parking controls, then everybody get's a good result. But if only one area votes in favour whilst their neighbours take the opposing view, then that dissenting area will displace cars into the neighbouring areas. Therefore even those who are against the scheme have an incentive to vote in favour.

Redefining the problem

If we define the problem to be "too many cars on the road", the general consensus amongst drivers seems to be that the solution is better public transportation systems for other drivers. But very few people have any desire to make the "modal shift" themselves.

But if one defines the problem as excess demand at peak times - outside the rush hour, there's plenty of roadspace and traffic moves freely - then perhaps we should try to do a bit more to incentivise road use outside peak times. How about something simple, which requires no capital investment, no new staff, no consultations, no free "Our City" newsletters, no focus groups and no extra money from car drivers or council tax payers: Let's switch traffic lights to flashing amber outside busy hours. This would improve traffic flow on major roads and might persuade commuters to change their daily pattern. Simple, cheap and easy to test.

Who Watches the Watchman?

watchmanIn late news, the council are running a further consultation on "the possible introduction of state-of-the-art safety measures aimed at reducing dangerous driving and protecting lives in two areas of the city."

Bristol City Council is proposing the introduction of comprehensive Watchman Safety Schemes at Long Cross in Kings Weston - between the junctions with Kings Weston Rd and Stile Acres - and at Whiteladies Road in Clifton, between the junctions with Lower Redland Road and West Park.

Both roads have relatively high accident rates. There were 63 reported accidents on Whiteladies Road in total between January 2005 and December last year - with two people killed and nine seriously injured. At Long Cross there were 27 reported accidents during the same period, with six people being seriously injured. Speed was an issue in a large number of the accidents at both locations.

If the new Watchman schemes get the go ahead, safety cameras would be installed in both directions on the two roads. They would be switched on around the clock and would record the number plates of any vehicles breaking the speed limit. Vehicle Activated Signs (VAS) would also be installed in advance of the cameras to warn motorists where they are exceeding the speed limit - and there would be clear signs to advise road users when they are entering the zones.

Fines would not be issued instantly, as with most other speed cameras, but police would be able to follow up any driving above the speed limit captured on film and consider prosecution.

A similar scheme has been in operation at Allison Road, Brislington for the past year and over that time traffic speeds have dramatically decreased and no new personal injury accidents have been recorded.

I wonder whether the Allison Road scheme will continue to deliver such benefits? The key phrase for consideration is "Post Hoc Ergo Propter Hoc", with extra credit for a study of "Regression toward the Mean".

Comments

Should market forces prevail?

Submitted by Chris Hutt on Wed 02/Jul/2008.
James, you're an economically highly literate person who seems to understand the operation of markets. Don't you think that the surplus of demand over supply for car parking places arises because the parking places are under priced (namely free)? Where parking places are charged for at the market price (central CPZ) there isn't a shortage (by definition, since if they're was a shortage the price would be too low). So extending the areas where parking places are charged for is surely a way to resolve the shortage (at least in principle, leaving aside the general incompetence of the City Council in such matters).

Economically Highly Literate?

Submitted by JMB on Wed 02/Jul/2008.

I don't know about "highly economically literate", but I can spot flattery a mile off.

I like market solutions to problems. This is not because I worship them as some sort of holy instrument of Thatcherite justice, but rather because they allow groups to solve problems gradually through negotiation and experimentation rather than by ham fisted intervention by (usually) well-meaning politicians like you and me.

I think you're off to a questionable start with the contention that this issue has anything to do with markets. By "market", I mean a space in which goods or services are freely exchanged. The asset under discussion - parking/road space - is publicly owned (so not owned by anyone), and the ongoing maintenance is paid for from general taxation.

To contend that the compulsory fee for a permit to allow someone to park in a CPZ, where demand is reduced by legislative fiat and supply is artificially constrained, represents the "market price" is the specific point where I start thinking "Pull the other one, it has bells on".

Which bits can we agree on?

  • There is great demand for parking space in some areas of the city.
  • Some of the demand is from commuters who park and walk to their place of work.
  • Some of the demand is from homeowners, who particularly wish to park near their home.
  • Occasionally demand is not matched by supply.

But none of these statements lead to the conclusion "and therefore we should paint double yellow lines everywhere, issue permits, hire parking inspectors and charge local people £40 a year to park one car, with no guarantee of a permit for a second car, and sod the commuters - they can all get the bus."

I note that your "free parking is a subsidy" argument is not making much headway in the comments section over at BB.

Free parking is a subsidy

Submitted by Chris Hutt on Wed 02/Jul/2008.
"I note that your "free parking is a subsidy" argument is not making much headway in the comments section over at BB." That's why I was hoping to you might lend it some credibility, but you're too much of a politician to go for that. Still I don't see why a market shouldn't operate for parking spaces as much as it does for living spaces. We all expect to pay a market price to rent accommodation for ourselves so why not for our cars? Just because the highways are publicly owned shouldn't stop parts of them being offered for use for parking at a market rate, which would mean that there would always be some parking spaces available, but at a price that reflected the balance of supply and demand. Otherwise we have all this bureaucratic nonsense with permits.

Arguments from Authority are rarely valid

Submitted by JMB on Wed 02/Jul/2008.

Done with the flattery, then? If your argument needs to borrow credibility from someone then it probably requires more work.

Run me through the chain of reasoning. Why is the CPZ permit fee the "market rate" for parking? Or, more formally, how do you prove that the fee is equivalent to a price at which excess supply and demand are cleared. (see market clearing). Or is the intent to keep raising the permit fee until there is exactly one empty space in the zone?

My counter-proposal to a CPZ (other than "do nothing" which is an acceptable response to many people) is mutualisation of non-trunk roads, which would actually provide the basis for a market solution to parking space. Individual roads could sell their excess parking space, bidding against neighbouring roads, if they felt it was economically viable.

Free parking is a subsidy

Submitted by Chris Hutt on Thu 03/Jul/2008.
My argument is that parking spaces have a value which can only be determined by the operation of the market, as you suggest with your mutualisation scenario. However markets for parking spaces will rarely be free because of the intervention of local authorities who control a large proportion of the parking available. The nearest we have to a free market is in the central CPZ where all on-street parking is pay and display and where private parking providers like NCP operate (I don't include the CPZ residents' permit fee of £50 p.a. as a function of the market - it's obviously a tiny fraction of what the parking spaces are "worth" and so is a good example of a subsidy). Parking for a working day in the central CPZ apparently costs £10 - £15 (£3,000 - £4,000 per annum), so that is the best indication we have of the market value of spaces in this area. I accept that the market is not allowed to operate freely, for example by allowing entrepreneurs to erect Barlow style parking structures left, right and centre. However I think most people would accept that as a reasonable restraint on the market. Outside the central CPZ one would expect the market value of parking places to decline progressively as one moves further away from the centre, but with local hot spots (around Clifton "Village" for one). I'm suggesting that a market value in the order of £1,000 p.a. might be expected. I emphasise "in the order of", so perhaps within the range of £500 - £2,000. In reality no market operates without a fair degree of government intervention and regulation, which of course tends to create distortions, but they remain markets nevertheless. The problem is that with parking government intervention and the resulting distortions are excessive, resulting in the problems with supply and demand that we know so well.

I walk along this same old lonely street ...

Submitted by The Bristol Blogger on Thu 03/Jul/2008.
"Do nothing" is indeed the most acceptable and correct short term response. Sixty years and a lot of money went in to planning the motor car in to Bristol. It's not unreasonable to believe it will take 30-40 years and a lot of money to plan the motor car out again. And making travel to work and getting around the city outrageously expensive doesn't seem much of a long term plan as there may be considerable economic and social consequences to this. Mutualising roads seems similarly irrelevant. For starters a lot of people such as myself have little interest in coming home after work and running a small car parking business. Plus surely our nationalised road network, considering the capacity it has to bear, is overall a success story? If it ain't broke why fix it?

All in favour of "Do Nothing", say "Aye!"

Submitted by JMB on Fri 04/Jul/2008.

In many ways, political policy making has strong parallels with consumer marketing: first, define a problem; second, offer a solution.

I'm not actively seeking to force anyone to manage their own road space, but I feel obligated to offer a specific alternative to this policy beyond the obvious and preferred solution of "Do Nothing".

Those of us involved in local politics would do well to remember that "Do Nothing" is often the most rationale response to many high-profile local issues, notwithstanding that it can be a difficult position to argue at election time.

RPZ

Submitted by Elizabeth on Sat 05/Jul/2008.

I don't like your idea of running co-operatives in streets.  Property is best managed privately, and if the government is responsible for highways then residents can't, Railtrack-like, take on bits of ownership and its maintenance, and not others. No, the highways should be for driving on not for parking on, and you won't be able to draw a workable line between those residential backwaters you have in mind, and the house-lined dual carriageways of Slough. Quite apart from the difficulties of running such a co-operative in a neighbourhood with lots of students in it.

 

If you lived in a street where the council has annexed the space for short-stay public car parking from which you got no benefit, only noise and pollution round the clock, epsecially at night, you would not baulk at paying £40 p.a. to get rid of the nuisance.  But the council is not offering this deal to people so afflicted.  Only to those suspicious that it is another stealth tax - i.e. those living further out.  The whole point of RPZ is surely to cut down pollution and noise in the city, not to provide residents with secure parking. It should start in the CPZs where there are residents, and work outwards as people come to see the benefits.  Instead the council is doing it the other way around and encountering unnnecessary opposition from both groups.

Residents control of streets

Submitted by Chris Hutt on Sat 05/Jul/2008.
The more I think about it the more I like James' idea of mutualisation of streets, at least for mainly residential streets without a major through traffic function. There would of course have to be safeguards to ensure that basic rights of free and safe passage along the streets was not compromised, but beyond that residents could decide on their own priorities. They would obviously be mindful of the revenues to be gained from allowing parking on the street by "outsiders" and this would lead to an appreciation of the market value of parking spaces. "Free" parking given to residents would be seen as a valuable subsidy and those without the requirement for parking spaces would come to expect an equivalent benefit. Parking management would normally be carried out by agents chosen by the residents (presumably on the basis of the revenues offered to residents) so they need not concern themselves with day-to-day management. The agents could also assume the residents' responsibilities to enforce the associated parking and traffic regulations. The revenues from parking might be used to carry out maintenance and improvements, including traffic calming measures if so desired. The Council's responsibilities would only extend to ensuring that basic standards of safety and accessibility were maintained.

We'll make a Thatcherite of you yet, Chris

Submitted by JMB on Sat 05/Jul/2008.

It's a controversial model, but I think it's one to experiment with. The obvious places to start are with cul-de-sacs and no-through roads in the existing CPZ, probably those associated with commercial space rather than residential. The Bristol Blogger's comment above that he has "little interest in coming home after work and running a small car parking business" is a good point. Although, effectively as a local tax payer in Bristol he's already doing that as are we all.

We contribute through the council tax and business rates to an enormous parking enforcement and collection operation run by the Council. Unfortunately we're only rate payers rather then shareholders, so we don't get any return from that investment.

I thought I was trying to convert you, James

Submitted by Chris Hutt on Sun 06/Jul/2008.
Your last paragraph is surely wrong. The parking enforcement and collection operation of the Council manages to produce a net profit of over £2 million, most of which comes from on-street parking in the central CPZ, so no direct cost to us as council tax or business rate payers. On the contrary, the profit makes a significant contribution to overall Council expenditure so in theory reducing the tax burden. If privatised one would expect the operation to dramatically reduce its overheads, increase productivity and introduce new technology (e.g. cashless payment systems so eliminating theft losses) so the net profit could be expected to perhaps double.

RPZ

Submitted by Elizabeth on Sun 06/Jul/2008.
I like bits of James's idea - especially the bit about the organic drainage and traffic calming - but even in a harmonious street of very similar owner occupiers I can see problems with "co-operation". People manage their own exclusive property most willingly, and the Tragedy of the Commons should always be borne in mind when one is getting idealistic about communities managing land together. (Re-read Animal Farm and decide whether you want to be Dobbin or not.) The old square gardens are the best model, but look what has happened to them now - Berkeley Square, for instance - though I expect there are smug exceptions in Clifton and Hotwells where there is no public access. I think it best to acept the RPZ idea as a first step towards getting the traffic out of the city centre - it may seem unfair, but if the politicians can blame it on the interests of the residents, they are more likely to carry it through than if they just speak tackling pollution. But they must start in the heart of the city first, in the CPZs, in wholly residential streets, such as those in the Conservation Area of St Georges and Brandon Hill. The 1997 Bristol Local Plan castigated parking as one of the chief factors in the degradation of that particular conservation area, and recommended that it be tackled. If RPZ goes ahead in outer areas first, the degradation and pollution in the centre will be increased as parking is displaced from Kingsdown, Cotham, Clifton and Redland into these CPZs instead.

All or nothing

Submitted by Mark Wadsworth on Mon 07/Jul/2008.

Rule 1 "If in doubt do nothing' Rule 2 is 'if there is a problem, ask if there is a market solution' Rule 3 'Don't do anything drastic without a popular mandate, i.e. a referendum, making it clear that the whole shebang will be reviewed in a year's time' I gather that there is a problem with lack of parking spaces in a certain defined area. So the really radical solution is to work out how many cars there are spaces for (some might need one space at home and one at their place of work, but the space might be used by two or three different cars at different times of the day). Then, having worked out this magic number, the council holds an online auction for x thousand permits, and the bidding continues until there are only x thousand bidders left. Those who can't or won't stump up the £500 or £5,000 or whatever the figure is have to rent a private garage and use public transport. If too many permits are sold, some car drivers might say 'Sod this' and ask for a refund, which is fine. There are infinite tweaks to this, i.e. there could be an inner and outer zone, or separate permits for weekends and weekdays etc. If you think about it, travelcards in London work like this - you choose which zones you need for how long in advance, the longer the period, the cheaper the cost per journey, and that works fine.