A well-known and respected transportation consultant recently reviewed material put together by a major transit agency considering the problem of congested park-and-ride lots for their heavy rail system. The planners and operations folks, apparently, were a bit confused, or had never taken economics (probably both), because this was the cosultant’s takeway from their argument and background briefing papers:
“[Their planners’ logic] goes like this:
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Need more parking — lots full early
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Spaces expensive — 25k per space
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Can’t afford it
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Can’t charge a market price for it — will drive customers away
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Ergo — convince people to live within walking distance of stations or build more stations. “
An economic (and market-based) solution exists to this problem, of course: Charge market-clearing prices for parking spaces. If the revenues are sufficient, build new parking facilities to encourage even more transit use. You might even be able to avoid building more stations because the high-capacity parking garages might manage the flow of transit users (and feeder buses) more efficiently.
The down side? I can’t think of one off hand.