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Merchants are wrong about parking meter fees

This blog takes the position that high-profile claims by many merchants about parking are untrue. I mean merchants no disrespect: I have the highest regard for the entrepreneurs that give Oakland its flavor. Merchants are on the front lines of the economy, and contribute enormously to Oakland’s employment and sales tax base. Merchants deserve the city’s attention and dedication. But transportation policy is not their strong point.

While merchants are a vital and valuable part of the community, their perspective on transportation is not as well-rounded as one might assume, and, as has happened before, many merchants have taken a position contrary to the best interests of their customers. The claim that higher meter fees and longer hours are hurting business is not borne out by a careful examination of the evidence.

Some merchants argue that the new meter fees have had a direct and immediate impact on their livelihoods. They claim very frightening downturns in their business: in Grand Lake, a salon claims to suffer a one-fifth fall in revenue, a bakery says sales are down 25%, and Alan Michaan of the Theater says his sales are off by half. They attribute these huge declines in their revenue to a $.50/hr parking meter fee increase, as well as a two-hour increase in the hours of operation.

This is hard to believe for two reasons. First, it usually takes consumers a fair amount of time to change their behavior in response to price signals. For example, car driving has continued to fall after gas prices came off their 2008 highs. A less inspiring example is that consumer habit is a major barrier to establishing new retail districts in Oakland. So it seems unlikely that one trip to Grand Lake, paying more than expected for parking, would result in an immediate and drastic change in consumer habits.

Second, fifty cents an hour is not very much money. Dinners in Oakland for two often cost over $50. $4 more in evening meter fees, which many customers expect because of dining experiences in San Francisco and elsewhere, is about the same as sales tax. If $4 is crippling to one’s transportation budget, then the extra cost of driving to a restaurant with dedicated parking in Walnut Creek or Lafayette would be hurtful too (and of course there are establishments within Oakland with off-street parking). Despite what some merchants imply, street parking is not free or unlimited in Emeryville, Berkeley, Lafayette or Walnut Creek. Daytime customers who may be buying the apocryphal spool of thread are paying an extra fifty cents an hour more, which does not justify a substantially longer and less convenient trip. It’s really hard to believe that Oakland charging drivers an extra dollar would have a substantial and immediate impact on store receipts.

So what is going on? Are the merchants lying? No, they’re not, although I will point out that merchants’ business statements are held to a far lower standard than that applied to larger enterprises. It’s true that business is bad for Oakland merchants. But is that really a surprise? Merchants should have been prepared for a hot, difficult summer, given that the recession is (hopefully) hitting its bottom, and there is usually a summertime decrease in local business. Rebutting one neighborhood’s example, City Homestead writes:

It’s critical to know how much, if any, business the commercial districts are losing that’s directly attributable to the parking fees and not to the economy overall. (I’ll add that in Grand Lake’s case, my read as a neighborhood resident is that business has been down for months—it’s not a new thing. We’ve lost a number of businesses, and most of them closed well before the increased fees kicked in, so I’m wary of attributing too much to a drop in July business.)

So there are other explanations for a painful business downturn. A source reports that one large and well-known Oakland restaurant has suffered, since July, a 40% decline in business. This restaurant enjoys free dedicated parking. So it may not be true that recent decline in business can be attributed to increased parking fees.

Even the upset merchants themselves date their decline in business to before the meter fees were increased. Several say that business has declined since the beginning of July, when the Master Fee Schedule was passed. But the fees didn’t come into effect until July 11; it was only two days later that Michaan began his protest. While many merchants believe they benefit from cheaper parking for their customers, it is far from clear that meter fees have had a real business impact.

Some merchants are asking the City Council to believe that customers cannot afford an extra dollar for shopping or four dollars for dining, that they have drastically changed their weekly routines, and did so immediately after a Council meeting at which Alan Michaan was the only person to speak against the fees. It doesn’t make sense. There isn’t enough evidence that higher meter fees and longer hours are actually reducing business receipts for the Council to reopen the budget process. Merchants’ assumptions need to be challenged: is cheap street parking really that important to Oakland retailers? In conclusion, please enjoy a choose-your-own-adventure story inspired by Paramount Theater Boardmember Clinton Killian’s Oakbook op-ed.

It’s a bright and breezy summer Saturday. You’re half of a hot couple and you want to roll your Prius to Ozumo at 7pm, but are sensitive to parking problems. You could spend $10 on the valet, $2 on the meter, or go somewhere else. Emeryville’s meters are cheaper, but they run all night, so if you linger over langoustine at Town Hall you’ll lose more than a Jefferson. PF Chang’s at Bay Street will let you park for free for two hours, but mediocre fried rice doesn’t really go with your outfit. You could cruise all the way over to Lafayette, enjoying some Lady GaGa on the way, but Yankee Pier may not be your scene, gas just keeps going up, and all that time in the car is time you’re not admiring your date. If you’re determined to pinch pennies, you can take your high-heeled, clutch-toting companion to the Sinaloa truck on First Avenue, where there’s free parking and the lengua tacos with pickled carrots are cheaper than Ozumo’s tender toro. What do you do?

The classy answer is to go to Ozumo and pay the valet, or cough up the $2 and walk a block. I dare say that’s your date’s opinion too.

Posted in california, citycouncil, oakland, transportation.

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12 Responses

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  1. Ralph says

    if your date is in heels, i am pretty certain you are paying the valet.

    good post. tis shame our council has a tendency to listen to the voice that screams the loudest, not the one speaking truth.

    spend fair amount of time on college ave these days, i’ve noticed a couple of stores which have closed. the least expensive items in these clothing stores was $100 for a shirt and those were the oddlots. Most items retailed for well over $200. Wild guess but I don’t think $0.50 increase in parking caused their demise.

  2. Evan Hamilton says

    I’d like to respectfully disagree…I think they are probably exaggerating the effect a bit, but I had a very frustrating experience last night.

    I was trying to park in uptown to hang out with friends. It was around 6:30, and there was still some late workers filling up parking spaces.

    Because it was 6:30 and now the meters go until 8, we couldn’t park at the great many 1hr-only metered spaces we passed. After about 15 minutes of looking, we found a 2-hour metered spot. Then we had to pay something like four dollars to park there. Additionally, the spot didn’t allow parking between 12-3am, so our plan for staying out lake and stumbling home (and getting the car in the morning) were dashed.

    At this point we are frustrated and late, and end up spending less time spending money at businesses.

    I suspect that next time my girlfriend will suggest we go up to Temescal, where we can actually park. And Uptown (which I really like) won’t get any of my money.

    There needs to be a sane middle ground here, and 15 minutes of driving and $4 of parking fees for two hours of parking is not it.

    My 2c.

  3. Beefy McManstick says

    Good post. Thank you for the logical, level-headed, and non-reactionary response. You bring up some good points. Here’s some anecdotal evidence from Copenhagen that when the elasticity of the consumers’ behavior (demand) catches up with the increased parking costs (supply) we will actually become better shoppers:

    I find it much more pleasant and safe to cycle or walk along a less crowded avenue. In short, fewer cars = more window shopping = more actual shopping! Unfortunately, the American Way seems to be to bitch and moan and blame someone else for one’s woes.

  4. John G says

    The Oakland parking site clearly states that feeding the meter to park longer than the maximum time limit for the zone will result in a violation. Is there really an exception to that rule after 5:00PM?

    If so, it must be a brand new regulation. An exception like that wouldn’t have made any sense back when meters were only enforced until 6:00PM.

  5. dto510 says

    Yes, as part of extending meter operation past 6pm, the city abolished time limits after 5pm.

  6. Retnan says

    Why is the world did they need to raise parking fees? The government doesn’t take enough money from the people? Ridiculous.

    If you’re gonna raise taxes at all they should ONLY be taxes on rich not regressive parking meter fees.

  7. jack says

    “By the way, city staff said on Tuesday that the perception that enforcement has been increased is “a myth,” and only 200 more tickets were issued in July and August 2009 than in July-August 2008. I don’t think 200 tickets in two months is a very large percentage, but we’ll learn more when the Council reviews the regulations.”

    A myth? How come on the day after fines were increased , when i had never seen a meter maid in my neighborhood i got a ticket IN THE MIDDLE OF THE NIGHT for “blocking my driveway”. Something myself and my neighbors have done for years. Instead of it being a $30 ticket as it was only 2 days before, now its $90. Coincidence?

  8. ralph says

    according to my sources, in July and Aug 09, DPT issued on average just over 300 fewer ticket compared to the same period last year.

    as to the ticket for blocking in the driveway, while i agree with the ticket because it creates a hazard for pedestrians, i disagree with the way the city went about enforcing laws that it has not enforced for years.

    with the exception of meter violations, the city should have issued should have warning tickets for the first 30 days or so to make people aware of the new enforcement. More flies with honey.

  9. John Franklin says

    *shrug* You may speculate all you want about how cheap parking meters are in comparison to spending. But given the choice, I always choose to drive to vendors with free parking lots. When there is free parking, this means I don’t have to search or fight for parking. Paying for parking is more than about a few cents here or there, it’s about a massive hassle. Also, meters require you to guess in advance exactly how long you will be in a location, and then watch your time very closely or else you can face substantial fines which blow your calculations about parking expenses out of the water. And all that constraining of time and watching of the clock just makes going out that much more inconvenient.

    Free parking lots with adequate space are substantially better, and result in a much more enjoyable outing.

  10. dto510 says

    Free parking lots are private property. The city cannot provide free parking lots because the city cannot charge rent from the benefiting businesses to cover the costs. Free parking lots do not permit parking by non-customers, another thing the city cannot do. Oakland has many free parking lots. So does Walnut Creek. That is not a reason for either city to reduce or eliminate parking meters. Again, the cities with the most shopping in CA (Emeryville, Walnut Creek, Pasadena, and Santa Monica) run their meters late at night.

  11. Robert says

    More revisionism. The change to allow 3 hour parking after 5 PM was done in response to complaints about the extended hours, not as part of the extended hour meters.

  12. Robert says

    If it is true that they issued fewer tickets this year, then the changed enforcement strategy of ticketing more of the parking violations in the hills was not even an effective money raising strategy. And yes, they did modify their enforcement strategy, to the extent that they publicly announce that they had created a special group of parking enforcement officers that were going to target violations in different areas of the city. Apparently ineffective in addition to highly annoying to citizens.

    Regarding the driveway parking, you are making a hugh assumption that the violator blocked the sidewalk. In most cases I have seen they are not blocking the sidewalk at all, the call is fully in the street. They are jsut parked in front of a driveway, and not on the sidewalk.

    In the areas I have seen in the hills, even folks who are parked ‘on the sidewalk” are not blocking passage on the sidewalk, or even parked onthe actual sidewalk. Mostly they are actually parked onthe parking strip between the sidewalk and the curb, shick does not impact the ability to navigate the sidewalk safely.

    I know that there are cases where cars have been parked where cars are parked blocing the actual sidewalk, and those should be ticketed, and there should not have been a warning, but that is not the ususal case up in the hills where the complaints have been.