The encyclopedia · R&D & Science · Strategic decision · 1992–2017
California paid commuters to not take the free parking
A 1992 law said: if you subsidize employee parking, you must offer cash instead — so solo driving fell and VMT dropped 12%.
State of California · California employers
the move
Employer-paid parking was an invitation to drive alone. A 1990 survey of 5,000 downtown Los Angeles commuters found free parking increased the number of solo drivers by 34%, because a free space made the car the cheapest option even when a bus or a carpool existed.
The intuitive fix — make parking harder or more expensive — is politically hard and hits everyone. Donald Shoup's parking cash-out did the opposite: it turned the already-existing parking subsidy into cash, letting the commuter decide.
California's 1992 law compelled employers renting free or below-cost spaces for 50 or more employees to offer a cash allowance equivalent to the parking subsidy.
The effect was measurable. For every 100 commuters offered the cash option, 13 solo drivers switched to another mode; the solo-drive share fell from 76% to 63%, and total commuting vehicle-miles and emissions dropped 12%.
why it works
- Cash instead of a free space makes the true cost of each car trip apparent.
- The employee keeps the choice — no ban, no new fee, just a price signal.
- Employers save money when an employee takes the cash and frees a parking space.
- It works even in places with weak transit, because the biggest shift was to carpools.
what transfers
A subsidy tied to a behaviour causes the behaviour. Pay the same benefit in cash and people choose otherwise, so you cut the behaviour without banning it and save the space.
what came after
The law stayed on the books but was widely ignored, with most employers unaware of their obligation. Shoup's broader idea — that parking is underpriced and the subsidy distorts driving — became a foundation of modern parking and congestion research, and was applied in cities that repriced curb parking with sensors.
references
- Evaluating the Effects of Parking Cash Out: Eight Case Studies
- Here's an easy way to fight L.A.'s traffic and boost transit ridership
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