Sunday, May 31, 2009

Chicago parking: private metering, public/private enforcement

The City of Chicago recently sold the right to manage its parking meters for the next 75 years to a private company, for a payment of $1.15 billion. The city retains the right to make parking laws and enforce them, although some aspects of enforcement are now shared. Not surprisingly, there's some trouble in the Windy City: Long a Driver’s Curse, Chicago Parking Gets Worse .

Not only have meter rates gone up, enforcement seems to have become more aggressive. Aside from the fact that Chicago looks to parking fines for revenue in tough economic times, there appear to be market design reasons for this.

Here is the agreement between the city and the contractor. Section 3.2e on page 40 reveals that the contractor as well as the city may issue tickets to illegally parked cars at meters.

So now there are two motivations for issuing tickets; the city issues them to raise revenue from parking fines and to enforce the parking laws, and the contractor issues them to increase meter revenue by discouraging people from parking without paying or parking after the payment has expired.

The city can raise revenues from fines by aggressively enforcing laws, e.g. about how many inches you may park from the curb. The contractor can raise revenues by ticketing cars promptly after meters expire. (Both the city and the contractor have an interest in enforcing the laws that say you must park between the lines.)

Some problems with getting new meters (which accept credit cards) to work properly have compounded the angst.

What to do? Carry lots of quarters when you drive in Chicago, at least until things settle down.

3 comments:

Imad said...

I live in Chicago. Winter is one reason I want to move. Now this is second.

David said...

My sister and her husband live in Chicago and can't wait to leave. Just like Imad, reason #1 is winter, reason #2 is parking.

Given that both parties have an incentive to give out as many tickets as possible, not only would I expect and increase in tickets, but I expect to be on a rather unprecedented level. I would not be entirely surprised to (eventually) see the company pay for roving squads of meter maids in an effort to beat out the city's meter maids for fines. Pay them minimum wage with a decent commission for each ticket... things could get ugly.

Professor Tex said...

Another terrible fact: parking authorities (public or private) are actually DISincentivized to have simple, functioning meters and working debit card technology. They made too much money off the violations! It's really an awful situation, and in my mind can only be combatted with enough downtown merchants banding together to demonstrate the negative economic consequences on tax revenues (sales and property)- a much harder check to cash than all that parking revenue!

More effective, perhaps, is citizen outrage when it crosses the "tipping point" as has happened in many municipalities with traffic cameras. Let's hope Chicago has a collective conniption fit!