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Evaluating the effects of cashing out employer-paid parking: Eight case studies

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  • Shoup, Donald C.

Abstract

California law requires many employers to offer commuters the option to choose cash in lieu of any parking subsidy offered. This report presents case studies of eight firms that have complied with California's cash-out requirement. For the 1,694 employees of the eight firms, the number of solo drivers to work fell by 17 percent after cashing out. The number of carpoolers increased by 64 percent, the number of transit riders increased by 50 percent, and the number who walk or bike to work increased by 39 percent. Vehicle-miles traveled for commuting to the eight firms fell by 12 percent. Carbon dioxide emissions from commuting fell by 367 kilograms per employee per year. The eight firms' spending for commuting subsidies rose by $2 per employee per month because payments in lieu of parking increased slightly more than spending for parking declined. Federal and state income tax revenues increased by $65 per employee per year because many commuters voluntarily traded tax-exempt parking subsidies for taxable cash. Employers praised the cash option for its simplicity and fairness, and said that it helped to recruit and retain employees. The benefit/cost ratio of the eight cash-out programs was at least 4/1. In summary, these eight case studies show that cashing out employer-paid parking can benefit commuters, employers, taxpayers, and the environment. All these benefits derive from subsidizing people, not parking.

Suggested Citation

  • Shoup, Donald C., 1997. "Evaluating the effects of cashing out employer-paid parking: Eight case studies," Transport Policy, Elsevier, vol. 4(4), pages 201-216, October.
  • Handle: RePEc:eee:trapol:v:4:y:1997:i:4:p:201-216
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    1. Small, K.A. & Kazimi, C., 1994. "On the Costs of Air Pollution from Motor Vehicules," Papers 94-95-3, California Irvine - School of Social Sciences.
    2. Shoup, Donald C., 1997. "The High Cost of Free Parking," University of California Transportation Center, Working Papers qt25w617n7, University of California Transportation Center.
    3. Shoup, Donald C., 1997. "The High Cost of Free Parking," University of California Transportation Center, Working Papers qt4vz087cc, University of California Transportation Center.
    4. Small, Kenneth A., 1992. "Using the Revenues from Congestion Pricing," University of California Transportation Center, Working Papers qt32p9m3mm, University of California Transportation Center.
    5. Wiktor L. Adamowicz & Vinay Bhardwaj & Bruce Macnab, 1993. "Experiments on the Difference between Willingness to Pay and Willingness to Accept," Land Economics, University of Wisconsin Press, vol. 69(4), pages 416-427.
    6. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-647, June.
    7. Shoup, Donald C., 1992. "Cashing Out Employer-Paid Parking," University of California Transportation Center, Working Papers qt4548s6j5, University of California Transportation Center.
    8. Shoup, Donald C., 1997. "Evaluating the Effects of Parking Cash Out: Eight Case Studies," University of California Transportation Center, Working Papers qt5nc6w2dj, University of California Transportation Center.
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