UCLA should fully subsidize BruinGo by implementing more efficient parking permit policies
By Roy Hu
April 1, 2011 12:12 a.m.
Last fall, BruinGo increased student bus fare from 25 cents to 35 cents ““ a tough measure because it meant we had to carry dimes. And effective next fall quarter, students will endure another increase: 50 cents per ride.
BruinGo enables students to ride the Big Blue Bus and Culver CityBus at a subsidized rate, which is what has kept bus rates so low for students. Currently, UCLA Transportation & Parking subsidizes BruinGo with the revenue generated from parking fees.
But the inefficient pricing of parking permits leads to misallocation of parking spaces and lost revenue, which could be used to fund programs like BruinGo.
If UCLA Transportation lacks funding for BruinGo, it’s not because it cannot generate the funds but because it is not generating them. To increase revenue, UCLA’s parking system needs to get smarter.
UCLA Transportation grants first priority for permits to faculty and staff. It then sells a remainder to students. Collectively, these permits account for about half of the parking revenue.
A permit is a fantastic deal. The apartments near campus that operate their own tandem garages get away with charging around $100 a month for parking. So it seems strange that UCLA only charges $82 a month for both the Blue and the Yellow Residence Hall permits. At below market value, are we really extracting enough revenue?
The other half of parking revenue is generated from daily sales of parking passes to campus visitors and the like. Since the demand is sensitive to the time and location, our current system of “one price fits all,” $10 a day, leads to all kinds of market inefficiencies: At various times and in various places, lots may be too empty or too full.
A simple solution is to go the way of Washington State University, which runs zone pricing for permits. Certain zones, such as Lot 32, are less desirable because of location. Prices are then adjusted accordingly to the price that people are willing to pay.
And not to be outdone, the city of San Francisco rolled out a futuristic army of hyper-intelligent parking meters. Based on “demand-responsive pricing,” rates fluctuate from 25 cents an hour to $6 an hour, based on sensors that track up-to-date demand. In theory, around 20 percent of the spaces will be available at any given time and location at the most efficient rate.
The idea behind all of this is to discover the price that consumers are willing to pay, thus extracting all of the consumer surplus to avoid any deadweight loss.
Yet all this seems rather counterintuitive. Why should UCLA try to exploit the preferences of its own?
But one should realize that UCLA’s goal to increase parking revenues is not for the sake of maximizing profits, like that of a private firm, but for the sake of maximizing social benefits. Profits go directly back to students and faculty in the form of subsidized bus rides.
Of course, this all begs the question: Is BruinGo even worth subsidizing?
To be sure, a significant part of its value is intangible. Who, after all, could quantify a beach trip with friends?
But there are a few things we can quantify.
For one, subsidizing public transportation is economical. BruinGo reduced demand for parking by at least 1,000 spots during its opening year. Instead of making students pay for a $47 million parking structure, subsidizing for them to take public transportation may indeed prove cheaper.
Despite all the benefits BruinGo brings, UCLA Transportation fails to see the need to subsidize it more.
“We’re trying to bring BruinGo in parity with other programs,” said Lisa Koerbling, the associate director of Parking and Finance. “Why should one lower-income student from Santa Monica ride for free while another riding the Metro pay?”
The argument for parity has appeal ”“ to ask for consistent treatment seems fair enough.
But the idea of parity challenges reflection. You very quickly realize that the only thing fair and consistent is that nobody gets to benefit. Why shouldn’t a lower-income student from Santa Monica receive that subsidy? Is parity really good enough?
BruinGo should receive that subsidy. Historically, it was the pilot program designed to test fare-free transit at UCLA. To say we’re not going to subsidize it beyond the level of any other program is admitting we’ve really given up on the idea.
At the new rates, we begin to wonder if it’s all really worth it. The prospects of alternatives like driving are rosier. Or perhaps that’s just the rising smog clouding our vision. To pay or not to pay: Either way, we’ll need a lot of change.
Prefer driving to public transport? Email Hu at [email protected]. Send general comments to [email protected].
