Focus on Understanding Customer Behavior, Pilot Testing, and Clear Communication to Successfully Implement Dynamic Parking Pricing.

Case Study of Implementing Dynamic Parking Pricing in Europe.

Date Posted

Is Parking in Europe Ready for Dynamic Pricing? A Reality Check for the Private Sector

Summary Information

Municipal authorities around the world have begun to realize that parking is an under-priced asset in many urban areas. As such, authorities have increasingly begun to implement various parking pricing schemes to generate revenue and discourage automobile use in congested urban areas.

One parking pricing scheme that is becoming more popular is Dynamic Pricing (DP). DP utilizes data analytics and information processing to proactively change the price of parking based on demand. For example, parking near a stadium would cost more during a major sporting event. In theory, DP can help maximize parking revenues and better manage demand for limited parking space.

Despite the advantages of DP it has proven difficult to implement. To figure out why DP has been difficult to implement, and to offer solutions to this problem, a research team based in Rotterdam conducted a case study of DP implementation in Europe. To do this the team gathered data about DP implementation across Europe and then carefully analyzed this information to understand the barriers to DP implementation.

To better implement DP the team suggests:

  • “Understanding customer behavior should be the initial step…. transactional data should be used to better understand (and predict) drivers’ behavior. At the moment, the biggest challenge is that those who are or should be interested in better understanding parking patterns (e.g., parking operators) usually do not have the right level of skills to thoroughly analyze and understand the data; and those who have proper skills to make use of the richness of the data (e.g., PMS providers and mobile pay applications providers) usually are not heavily interested in using or sharing data insights to better understand customers’ behavior.”
  • “Second, more pilot tests with DP must be carried out, monitored, and evaluated.”
  • “Third, internal and external communication is the most crucial aspect…. Most drivers still find it difficult to understand why they have to pay for a parking space.” Those seeking to implement DP should carefully communicate with customers about why are implementing DP and why paying for parking is necessary.