The incredible Cheapness of Being Parked
Some people have wondered about my forecast in the spreadsheet on Robotaxi economics about the very low parking costs I have predicted. I wrote about most of the reasons for this in my 2007 essay on Robocar Parking but let me expand and add some modern notes here.
The Glut of Parking
Today, researchers estimate there are between 3 and 8 parking spots for every car in the USA. The number 8 includes lots of barely used parking (all the shoulders of all the rural roads, for example) but the value of 3 is not unreasonable. Almost all working cars have a spot at their home base, and a spot at their common destination (the workplace.) There are then lots of other places (streets, retail lots, etc.) to find that 3rd spot. It's probably an underestimate.
We can't use all of these at once, but we're going to get a great deal more efficient at it. Today, people must park within a short walk of their destination. Nobody wants to park a mile away. Parking lots, however, need to be sized for peak demand. Shopping malls are surrounded by parking that is only ever used during the Christmas shopping season. Robocars will "load balance" so that if one lot is full, a spot in an empty lot too far away is just fine.
Small size and Valet Density
When robocars need to park, they'll do it like the best parking valets you've ever seen. They don't even need to leave space for the valet to open the door to get out. (The best ones get close by getting out the window!) Because the cars can move in concert, a car at the back can get out almost as quickly as one at the front. No fancy communications network is needed; all you need is a simple rule that if you boxed somebody in, and they turn on their lights and move an inch towards you, you move an inch yourself (and so on with those who boxed you in) to clear a path. Already, you've got 1.5x to 2x the density of an ordinary lot.
I forecast that many robotaxis will be small, meant for 1-2 people. A car like that, 4' by 12' would occupy under 50 square feet of space. Today's parking lots tend to allocate about 300 square feet per car. With these small cars you're talking 4 to 6 times as many cars in the same space. You do need some spare space for moving around, but less than humans need.
When we're talking about robotaxis, we're talking about sharing. Much of the time robotaxis won't park at all, they would be off to pick up their next passenger. A smaller fraction of them would be waiting/parked at any given time. My conservative prediction is that one robotaxi could replace 4 cars (some estimate up to 10 but they're overdoing it.) So at a rough guess we replace 1,000 cars, 900 of which are parked, with 250 cars, only 150 of which are parked at slow times. (Almost none are parked during the busy times.)
Many more spaces available for use
Robocars don't park, they "stand." Which means we can let them wait all sorts of places we don't let you park. In front of hydrants. In front of driveways. In driveways. A car in front of a hydrant should be gone at the first notification of a fire or sound of a siren. A car in front of your driveway should be gone the minute your garage opens or, if your phone signals your approach, before you get close to your house. Ideally, you won't even know it was there. You can also explicitly rent out your driveway space for money if you wish it. (You could rent your garage too, but the rate might be so low you will prefer to use it to add a new room to your house unless you still own a car.)
In addition, at off-peak times (when less road capacity is needed) robocars can double park or triple park along the sides of roads. (Human cars would need to use only the curb spots, but the moment they put on their turn signal, a hole can clear through the robocars to let them out.)
So if we consider just these numbers -- only 1/6 of the time spent parking and either 4 times the density in parking lots or 2-3 times the volume of non-lot parking (due to the 2 spots per car and loads of extra spots) we're talking about a huge, massive, whopping glut of parking. Such a large glut that in time, a lot of this parking space very likely will be converted to other uses, slowly reducing the glut.
Ability to move in response to demand
To add to this glut, robocars can be the best parking customers you could ever imagine. If you own a parking lot, you might have sold the space at the back or top of your lot to the robocars -- they will park in the unpopular more remote sections for a discount. The human driver customers will prefer those spots by the entrance. As your lot fills up, you can ask the robocars to leave, or pay more. If a high paying human driver appears at the entrance, you can tell the robocars you want their space, and off they can go to make room. Or they can look around on the market and discover they should just pay you more to keep the space. The lot owner is always making the most they can.
If robocars are electric, they should also be excellent visitors, making little noise and emitting no soot to dirty your walls. They will leave a tiny amount of rubber and that's about it.
The "spot" market
All of this will be driven by what I give the ironic name of the "spot" market in parking. Such markets are already being built by start-ups for human drivers. In this market, space in lots would be offered and bid for like any other market. Durations will be negotiated, too. Cars could evaluate potential waiting places based on price and the time it will take to get there and park, as well as the time to get to their likely next pickup. A privately owned car might drive a few miles to a super cheap lot to wait 7 hours, but when it's closer to quitting time, pay a premium (in competition with many others of course) to be close to their master.
Ideally, driveway owners and cities would put all the spots they control into the spot market too. Free parking may vanish and be replaced by very cheap parking. Human drivers with smartphones should be motivated to also buy their parking in the spot market, ideally. In some cases, free parking is still possible with conditions. A retailer may offer free parking to human drivers (who probably want to shop) or frictionless validation systems could be built. However, parking may get so cheap that all of this becomes unimportant.
The zero incremental cost
Parking is perhaps the lowest incremental cost product there is. If you own a parking spot, your costs don't change if it's occupied or not -- not in a world of automatic electronic payments. If you leave a spot empty when somebody would pay for it -- pay almost anything -- you are leaving money on the table. There are many products roughly of this class, but few as strongly in it as a parking spot. Especially when we're talking about an electric robocar that drips no fluids, emits no soot, pays online, and will leave if you have a higher paying customer. There's not even opportunity cost in that case. About the only cost is extremely minor pavement wear, deposit of rubber and traffic going in and out. Perhaps a slight increment in security (though cars can monitor their own.)
What happens if we have a glut of spaces, and leaving a space empty leaves money on the table? It means the base price of parking trends down, to very, very cheap. People will probably accept offers of 10 cents/hour because they will get nothing if they decline.
In some markets, the players band together (though this is technically illegal) and put an artificial floor on prices. This could happen here -- it could even be made legal to "save the industry" which will indeed be in trouble. But it only takes one person with an empty lot within a few miles to break ranks. What cities do with their on-street parking will also have a big effect.
Street parking is, as noted a special case. At peak times, most cars and almost all robotaxis (if the fleet is sized for the peak) are in service, and park/stand only briefly. On high-demand routes, street parking will likely be forbidden, and robotaxis must by law hear and obey an order to leave. Off-peak, more cars need to park, but road capacity needs are also less, and cities can open street parking. They can even open 2 lanes per side of double-parked street parking on the wider streets of lower usage. In addition, any driveways which held a car that went out on commute become available, as do the spaces in front of all driveways. Cities probably will face pressure from parking lot owners not to drop prices too low on this parking. Street parking is be more valuable, because it takes zero time to get in and out of a street space compared to a parking lot (especially a multi-floor one.)
At night, there is tons of long term capacity; all the office and closed retail lots, the sides of most streets, and the driveways of homes who have given up car ownership. The owned cars will probably be living there (after visiting the charging station for a few hours.)
Parking and charging
When electric robocars need to charge, they can travel to the electricity. You don't need to put charging stations at every home and in every parking lot, though of course there are already many and will be more. The best places for charging stations should be power grid transformer substations, where many megawatts can be tapped at low infrastructure cost. This may be some of the most expensive parking to be found and lots around these substations may well be the few to go up in value.
People already make robotic fueling stations for gasoline, so robotic plug-in seems pretty likely here as well. You will pay for the electricity, but the car will also pay for time taking up a spot so cars will want to charge fast. Fortunately charging is getting pretty fast, and the 10kwh battery of a single person robotaxi won't take long. Today, there is a trade-off: The faster you charge, the more risk you have of reducing the life of the battery, so there will be a sweet spot charge rate for cars not in a hurry. Robocars will rarely be in a hurry.
Today's parking cost
Parking in high cost areas seems expensive. Many lots are flat rate and might charge you $30 or more for even a short stay, or $10/hour with a daily rate hit after just a couple of hours. They are taking advantage of the fact that human drivers doing short-term parking need parking close to their destination, and they need it now.
The real cost of parking, even in downtown San Francisco, for example, is in the range of $3-$4 per hour. Monthly spaces there sell for $300 to $500 per month. A typical rental spot gets used for 8-9 hours of commuter parking and sometimes 4 hours of evening parking. Spots also sell for $30-$40 per day. The bulk price per daytime hour is under $2, often well under it. So when you pay $10/hour you are paying $2 for parking and $8 for convenience. But robocars don't care much at all about the convenience and can select from a wide array of competing lots. In addition, some robocar makers may elect to buy space for their cars in bulk, so they will pay the bulk price. Combine the bulk price with the 3 to 1 valet ratio and you're already under $1/hour.
When the glut ends
At a rate of only dimes per hour, nobody is likely to build more parking, and many people may want to convert their parking lots to new purposes. That will take time -- in fact in many cities the zoning laws actually demand that buildings have adequate parking. Open parking lots are easy to repurpose, but big parking structures might be difficult to convert and require demolition. Some parking structures are in basements or make up the central core of buildings, spaces without light that are not useful for offices.
As the spaces disappear, the prices should go up, but at the same time, there will be more and more robocars and robotaxis. Outside of the downtown cores, land is not free but bare paved land is actually not that expensive. An acre of land can hold over 700 single person robotaxis parked densely. Even at $100,000 per acre that's somewhat tolerable, and in most places land is cheaper than that. If only holding lightweight vehicles, you can pave at a much lower cost, too.
In super-dense downtown cores, parking should still cost money, but robocars will have the option to drive a couple of miles out of town. For robotaxi users, if there is not enough capacity to bring in all the cars at 5pm for their passengers, vans and buses could arise to take people in bulk in roughly the right direction to outside the congestion zone, where their personal ride should be waiting right where the van stops.
So will you circle for parking?
I have frequently seen people say they imagine robocar owners would tell their cars to just drive around rather than pay for parking. That's never been very likely. Today's cars cost about $20/hour to run, and that's more than today's parking. Tomorrow's cars may cost as little as $2-3/hour to run but that is still more than the forecast cost for tomorrow's parking. (It's also unlikely you would send you car 15 miles to your home to wait. The parking should cost less, and robotaxi service for those still at home will be cheap as well.)
It can be argued that while cars cost $20/hour the cost of incremental hours might be more like $7/hour,and eventually $2/hour for cheap cars. Still too much to justify circling. Even though electricity is cheap, it's actually very precious for electric cars because it represents range.
However, if, in spite of the terrible economics of circling, somebody still wants to do it, it's one of the easiest activities to prohibit in the law. Because there will only be a handful of different varieties of self-driving systems on the market, it's very easy to enforce such a law, working with those providers to make sure their system won't do this. (People often forget that because rules are hard to enforce on people because there are millions of different people who can't be regulated easily, and imagine it will be hard to enforce rules on self-driving cars.)
It is my hope that cities will take the opportunity to convert some of the no longer needed parking lots to interesting new purposes, including of course parks of the natural kind. Yes, some will turn into condo towers and office blocks, but it's a rare opportunity to gain a bonanza of land in the cities.
What if the fleet is larger
In upcoming articles, I will be talking about what the optimal fleet sizes are for robotaxis. There are some arguments that push to larger fleets (to provide short wait times in a competitive space.) If that happens, there will be increased demand for parking.