Daily parking - the secret to managing demand

In these extraordinary times, employers are quickly moving from monthly parking permits to daily parking and reservations. More flexibility. Less demand. Proven resiliency.

Now, more than ever, flexibility is key for commuters. And, as commute leaders, we are being called upon to collaborate, innovate, and empathize in order to keep our teams feeling safe and productive as they return to work with narrowed transportation and mobility options. Most notably, we must prepare for a substantial (and sustained) uptick in employees driving alone to work.


This desire for flexibility isn't new. It's just become more evident. More employees will opt for a combination of telecommuting and driving alone. The foundation of any flexible, resilient commute program is daily parking—whether or not your organization charges employees for this parking. Daily parking allows you to better manage demand through reservations and a phased return, while simultaneously encouraging safe alternatives such as telecommuting, biking, and walking.


The core truth is this: transportation and mobility is going to look different for quite some time. If you look at what's happened in China, the data tells a compelling story. Driving numbers are way up, transit ridership has significantly dropped.  When employees across the US do return to the office, more will drive than ever before. How will you manage the demand? Why will flexibility and empathy be crucial to commute program continuity? Your commute success starts and ends with your parking policies.



Now, more than ever, flexibility is key for commuters.

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The fact is, nearly every organization is trying to play catch up. And that’s not a slight, given the recent hyper-growth of Mobility as a Service (MaaS) apps—and further exacerbated further through the uncertainty of our post-pandemic commute. Commuters have come to expect this on-demand mobility coupled with daily flexibility. And now that 'normal' is changing, and our commute policies need to change as well. Even though most of our employees won't rely on shared mobility in the near future, flexibility remains the key to a resilient commute program.


So let's dive in and talk parking policies, as they represent the underpinnings of a resilient commute program. There are two common commute policies at organizations across the continent—monthly parking and binary benefits. Monthly parking is simply the administration of parking assignments and/or charges on a monthly cadence. Employees pay in advance for next month's parking space. Many organizations rely on monthly parking charges because administration is more manual and capable of being executed without technology. This creates major parking demand problems that we will get into later.


Binary benefits—meaning parking OR transit—are another norm. The intention here is good but the execution falls short. My first job in Seattle offered me a choice. A free transit card (yay) or free parking in their garage. One or the other. I’m in or I’m out. Zero flexibility. What if I want to bus some days but park on others? I created my own hybrid system, where I bussed most days but drove (and paid market rate for parking) on Fridays, so I could quickly escape the city to the mountains. I created my own flexibility, but the truth is, my employer should have had the policies (and, honestly, technology) in place to empower every employee with this daily flexibility. That was nine years ago...I wonder, have they caught up?

The right policy and technology for flexibility


So, if binary isn’t the answer, what is? The key is to create a scenario where employees have a choice each morning—and any incentives/disincentives are purposefully designed to realize the behaviors we’d like to encourage. We should allow employees to set aside pre-tax dollars for parking, transit, and rideshare services. We should subsidize or reimburse commutes via MaaS apps and offer amenities like bike cages, showers, and free tune-ups. We should support flexible vanpooling and subsidize the cost for employees. We should provide guaranteed ride home services with Lyft or Uber, so employees feel like they have the flexibility to leave cars at home in case of emergency. We should subsidize transit whenever possible so that fewer employees are choosing to drive-alone each day. We should do all of these things once it is safe to do so. We need to prepare now. And here’s the message that needs to be heard: It’s not about never driving – it’s about driving less. So let's start with parking.


In the current commute climate, how do we promote driving less, when it is the safest commute for many? The simple answer: we keep our policies flexible. We promote telecommuting even after we return to work. We implement daily parking charges, even if just a nominal fee. This means that employees will only pay for the days they actually park, and they are less likely to park if they have other safe options available to them (telecommute, bike, walk, carpool with spouse, etc). We implement parking reservations—where employees reserve parking in advance for the days they must be in the office. This will help manage demand and prevent employees from showing up to the office without having a place to park. We offer pre-tax parking cards to employees, and add our own subsidy, to pay for qualified parking expenses if employees have to park offsite (due to onsite parking shortages).

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In a world where it is safe again to do so—technology administers subsidies (say $100/month) to eligible employees who commute with third-party mobility providers like Lyft, Scoop, Strava, and Waze Carpool. The employer will also receive critical data about which employees are using ride-hail, biking or walking, and carpooling. For example, when an employee carpools using Scoop or Waze Carpool, the employer will know when an employee carpooled— and with whom—allowing for rich analysis, targeted communications, and directed incentives (like free or priority parking for carpools). Employees simply connect their apps and start carpooling. This provides flexibility, choice, and an enjoyable experience because employees can use the daily apps they love for their (twice) daily commute.

Why do I need daily parking?


Without a doubt, the worst policy you can have in place is free employee parking, with monthly paid permits a close second. You can read more about 'free' parking here, or look up Donald Shoup online (he's essentially the godfather of parking economics). These basic economics tell us that charging a fee, even a nominal one, will reduce demand for a given commodity. More employees will drive alone when they return to the office due to public health concerns, meaning it is even more crucial for employers to manage demand with daily parking charges and safe, alternative options like telecommuting, biking and walking. If you do charge for parking, but it’s at a monthly rate, you’re creating a detrimental sunk cost effect. I am actually more likely to drive because I’ve paid for parking and I want to get the most bang for my buck. No matter how many carrots (rewards) you throw at alternative modes, I’m still likely to stay rooted in my car seat.


We’ve worked with employers who have shifted from monthly parking charges to daily parking charges (and doubled the total cost), with very little outcry. HR thought there would be a mass exodus, but instead, employees were delighted that they were only paying for the days they actually drove and wanted to park. What’s more, the employer was able to open up garage access to more employees, because fewer chose to drive each day. The parking garages had better daily utilization, because employees weren’t just sitting on their monthly parking permit –– afraid they wouldn’t have access on a day when driving was a necessity. Employees understood that they had access and could park on days they needed to drive but, in the end, didn’t have to worry about the days they enjoyed an alternative instead.


When we wake up in the morning, the first question on our mind is often: what’s the weather and what’s my commute like today? We commute twice daily, and we all know it has a profound impact on our job satisfaction and productivity. In fact, commute is the 3rd most common reason why an employee leaves a job, only second to low wages and hours worked.[1] So employers, catch up and align your programs, policies, and technology to offer that flexible daily choice we all desire. Your employees, corporate culture, and bottom line will all reap the benefits of this shift.

[1] Washington Post; Hinge Research Institute Employer Brand Study 2017; ADP Research Institute, 2018.

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