Employee Parking Cashout

Mike R. Bullock

The South Bay MTS Membership Banquet (held July 1997) featured a presentation by Stanford Transportation Analyst Patrick Siegman. His topic was Employee Parking Cashout.

In case the reader is not familiar with such programs, here's a brief explanation. In a cashout program, a company pays employees to not drive. One rationale for such a program is that because car parking is an expensive commodity, those that use it less than others deserve additional compensation.

Mr. Siegman, who is also an active member of the Silicon Valley Bicycle Coalition (SVBC), presented data on 10 different case studies of cashouts, covering a total of over 50,000 employees. The data is shown in the accompanying table: Cashout, Results of 10 Studies. As shown, the average payment was $46 dollars per month. But here's the kicker. The average decrease in parking demand that was that was accomplished by the programs was over 25%!

Based primarily on this data, the South Bay MTS has requested that the County's Valley Transit Authority (VTA) consider cashouts in their Countywide Deficiency Plan (CDP). The CDP purports to be a plan to alleviate congestion (despite its name, which is not a misprint, and seems to make perfect sense to the government officials involved.) The current Draft Plan's primary strategy is a large tax increase to further subsidize highway expansion. (Well, yes you want to plan for continued deficiencies, that is certainly a valid approach.) However, as if to make up for its obvious mischief, the Draft Plan also contains legitimate "Actions" (so-named in the Plan) that would in fact reduce traffic, at least to some extent. A long overdue example is an "Action" to require bike parking in the same way that car parking is required. (That action has been supported by the SVBC and MTS for over 20 years.)

However, nothing in the Plan (or perhaps I should say not even everything in the Draft Plan taken together, including highway expansions costing hundreds of millions of dollars) has as much proven traffic-reduction payoff (25%!) as requiring that employers institute equitable cashout programs. "Equitable" means a cash out plan under which all employees receive exactly the same "commute related compensation". "Commute Related Compensation" (an MTS coined phrase) means 1.) the per-time value of capital items used to aid commuters, such as car parking, bike parking, or showers for bicyclists; 2.) company purchased commute services, such as bus passes or shuttle services; or finally, 3.) cash paid so that all employees get exactly the same amount of value from the company's involvement in commute choices. "Working the math", shows that average value of car parking, in Silicon Valley, where land worth about $1.25 million per acre, is about $70 dollars per month. Note that this is about 50% more than the average pay out of the Siegman examples.

The MTS has sent this information in letters to the 3 advisory committees that are supposed to be involved in the formulation of the Plan. They are the Policy Advisory Committee (PAC), the Citizen's Advisory Committee (CAC), and the Bicycle Advisory Committee (BAC). These letters also stated that a cash out strategy was supported by the Sierra Club's Conservation Committee, as well as the Bicycle Coalition. This critical support was obtained by showing the Siegman data and other material to representatives of the two groups.

In response, at least one of the Committees (the CAC) has expressed an interest in the ideas, causing the Draft Plan responsible person, Mike Evenhoe, to state that he would research the ideas and report back. The interest was expressed by MTS's Henry Servin and SVBC's Ellen Fletcher. The BAC's response, to date, has been to say little and do nothing, even though the SVBC has expressed clear support.

Contact me, Mike R. Bullock, if you have comments, would like to help, or would like to be updated on this work.

Index of articles on cashout and parking

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