University of California Transportation Center

Almost all parking in the United States is provided free to the user. In the 1990 Nationwide Personal Transportation Survey, motorists reported receiving free parking for 99 percent of all automobile trips. Because the average car is parked 95 percent of the time, it seems clear that, in most cases, congestion tolls would charge motorists for the use of roads during the brief time they are travelling between free parking spaces.

In considering the potential benefits of congestion pricing, previous research on parking pricing provides useful evidence that automobile use is surprisingly sensitive to its price. The purpose of this study is (1) to present the evidence from parking studies on the price elasticity of demand for automobile travel, (2) to explore how employer-paid parking subsidies contribute to the problems that congestion tolls are meant to solve, (3) to propose a policy to "cash out" employer-paid parking subsidies, (4) to explain California's new parking cash-out legislation, and (5) to describe some early results of the California legislation and speculate on how it may serve as a precedent for implementing congestion pricing.