Value Pricing Pilot Program: Lessons Learned – Appendix B

6.0 Other Pricing Projects

Table 6.1 Car-Sharing in the City of San Francisco, California

Other Pricing Projects	Car-Sharing in the City of San Francisco, California
Operations	Nonprofit City Car Share operates. Reaches 4,000 drivers; launched in 2001, the service has 90 vehicles available in more than 40 locations in SF and East Bay. Agency under authority of SFCTA. Makes agreements with transit, businesses and building owners, insuring car/driver and managing reservations.
Cost, Finance, and Revenue	In FY 2000, FHWA VPPP funding of $742,000 was awarded for the study. Most users spend less than $2,000 a year. Cheaper than taxis or rental cars for most trips, more expensive for longer trips. Membership dues are $10 per month; then $5 per hour and $.40 per mile for most cars; application fee of $30 and a refundable security deposit of $300. Reported revenue of about $2 million in 2003, from membership fees and government grants.
Policy/Institutional	Nonprofit formed in cooperation with cities of Berkeley and Oakland. Competing with for profit Zipcar and Flexcar in region.
Outreach/Acceptance	Formed with support of public interest trusts, coalitions and associations.
Technology	Cars have an embedded on-board computer that captures your member number, mileage, and share time. Users hold a small plastic fob next to a reader to relay unique code; engine will not turn without it. On-board computer updated with reservation schedule verifies you; car keeps a current roster by wireless link to garage wall panel.
Equity/Environmental	Fuel consumption and related emissions fell for members versus controls; not statistically significant for either group (03 and 06). “Result” probably due to reduced vehicle ownership, more fuel efficient car-share vehicles (03) or shorter trips, higher occupancy versus controls (06). Possibly hard to serve low-income groups profitably by commercial operators.  As demonstrated in Seattle, car sharing for low-income probably requires public subsidies, but can achieve social objectives.
Impacts	Large proportion of trips made off-peak, possibly moderating congestion relief (06 and earlier reports). 3/10 trips “would not have been made” (06 report). Prior mode survey shows high proportion of transit, walk, bike, carpool or new trip; 68 percent of trips are added vehicle trips (03). Car ownership decline:  73 percent versus 43 percent controls reduced car ownership 2001-2003; in 06 report Table 5 shows very mixed result:  controls reduced “2 or more cars” versus members; members show more “reduce by one”  and less likely to increase vehicles versus controls, but no statistical test here. VMT decline for members versus controls (6.46 VMT per day, 03), but not statistically significant in 03 or 06 report; “adjusted for mode and occupancy did get significant result in 06 report, but not clear what means.
Evaluation	Early adopters may not represent later adopters; long-term evaluation (at least two years) important. Creating evaluation design not easy:  controls made up of applicants who initially registered but did not join may not be fully comparable to joiners. Mailbacks and financial incentives boost response rates.

Sources:
http://knowledge.fhwa.dot.gov/cops/hcx.nsf/docs/29AB105A2787964C85256DB100641EFE?opendocument&%20Group=Value%20Pricing&%20tab=REFERENCE.
Robert Cervero and Yu-Hsin Tsai, San Francisco City CarShare:  Travel-Demand Trends and Second-Year Impacts (August 1, 2003).  Institute of Urban and Regional Development.  IURD Working Paper Series.  Paper WP-2003-05. See:  http://repositories.cdlib.org/iurd/wps/WP-2003-05.
http://www.citycarshare.org/partners.do#nonprofits.
http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2005/08/01/daily32.html.
http://www.wired.com/wired/archive/9.10/streetcred.html?pg=4.

Table 6.2 Cash Out of Parking in King County, Washington

Other Pricing Projects	Cash Out of Parking in King County, Washington
Operations	King County Metro received a grant in 2001 from the FHWA in part to reduce commuter parking via promotion of parking cash out to downtown Seattle employers. Cash out concept tested allows employees to give up their parking in exchange for a monthly cash amount; employers negotiate with parking/building managers to pay for fewer monthly parking spaces; parking/building managers then may offer the relinquished spaces at higher hourly parking market rates.
Cost, Finance, and Revenue	FHWA VPPP funding of $499,280 and $98,832 was awarded in FY 2001 and $419,500 awarded in FY 2000. King County offered employers both a financial incentive and technical support in administering cash out:  $125 a month per employee receiving free parking prior to program implementation; after 9 months, additional $125 per employee relinquishing free parking space. Potential employer/developer costs:  cash out may reduce employer parking costs for employees as parking demand is reduced and less parking is leased; developers may gain from reduced parking supply and more land development potential. Administration:  no results assessed in King County; national experience suggests costs tend to be small once program is integrated into payroll; typical program requires approximately two minutes per employee per month for administration (Shoup, 1997); firms that own employee parking facilities may incur financial costs if they cannot lease or sell excess parking capacity (Shoup, 1997, found $2 per month average net cost per employee among eight employers studied).
Policy/Institutional	No public policy changes instituted; promoted as a voluntary program among participating employers. The project served to inform city staff about a parallel effort to begin carsharing in Seattle.  The Parking Cashout project led Metro staff to recognize the market for “business carsharing” among employers in the Seattle CBD.  This market  for business carsharing has expanded considerably over the last few years.  Also, The Parking Cash Out grant provided King County Metro the opportunity to form a partnership with both the City of Seattle and the Downtown Seattle Association, a partnership which is in place today to help increase transit ridership and reduced SOV usage in Downtown Seattle. Trip reduction law was in effect in the project area at start up, requiring employers with 100 or more employees commuting to work during the a.m. peak period to implement trip reduction strategies (94 employers in the study area were affected by the CTR law in 2001).
Outreach/Acceptance	Market Potential:  initially, downtown Seattle seemed ideal for cash out:  good transit; parking leases are unbundled from floor space leases; parking limited and prices high; significant transit pass promotions; law encouraging employer action to reduce SOV; estimate of potential participating employees was about 1,000; based on up to 52,000 employees downtown Seattle with parking subsidy (Kodoma, 2001, King County, 2000), 2 percent which might be affected. Outreach:  Staff worked with existing King County Employer Transportation Representatives (ETR) to market cash out; ETR’s work with employers affected by the state Commute Trip Reduction (CTR) law; staff also presented at meetings in downtown Seattle (representing 27 employers), and distributed brochures at transportation fairs; ETRs presented cash out option to a total of 11 employers, three eventually elected to implement; also worked through Downtown Seattle Association (DSA) to reach employers not affected by the CTR law, size 25 and 99 employees; in 2002, the DSA made 744 sales calls; only three employers agreed to a presentation, and none elected to participate in the program.  Sales staff at Metro and lower level ETC’s (Employee Transportation Coordinators) for employers could not grasp the concept of Parking Cashout well enough to develop an effective sales pitch and follow through. Market Penetration:  All efforts resulted in three businesses and 18 employees participating. Employer/employee Acceptance:  minimal probably due to parking subsidies already eliminated for most employees, extensive bus pass program already operating; decrease in King County and downtown employment reducing employer interest in “something new”; smaller employers without ETRs hard to reach; core of employees believing they must have a car for work (44 percent of those of 100K in salary claim this need, in part because of “working late”). Building/parking management acceptance:  wanted to keep tenants and maintain revenues with office vacancies on the rise and parking prices appearing to decrease; would not renegotiate tenant leases to change monthly parking spaces; concept viable only where demand outstrips supply, and spaces can be sold daily. Employer Transportation Representatives acceptance:  cash out added size and complexity to sizeable existing package of employer; also “hard to process” for some ETRs, and difficult to communicate to upper management. Overall Market Conclusion:  avoid marketing to outside sales employees, high-income workers, brokers, and others who need cars, have irregular work hours; careful not to add cash out to already sizeable employer trip reduction program offerings; analyze market potential in depth.  An economic downturn in 2001 in Seattle created high-vacancy rates in downtown office buildings, probably affecting the acceptance of cash out.
Technology	Study did not evaluate technology options.
Equity/Environmental	No demographic breakdown of participants or potential market given for King County program. Generally:  may be progressive if lower-income employees opt for cash and voluntarily choose automobile alternatives.
Impacts	Participation:  13 continuing employee participants at end of one year across three employers. SOV trip reduction:  114 weekly SOV trips reduced. Transit:  98 weekly new transit trips attributed to program. Projection, best case:  marketing consultant estimated contact with 683 potential candidate companies, 10 percent response rate, 25 percent company adoption rate gets 17 participating companies; 3 participants per company gains 51 parking spaces affected, max. Overall:  “We have concluded that the employer market for cash out in downtown Seattle, even with added incentives, is too small and fragmented to be cost-efficiently targeted.” Impact potential from experience elsewhere:  Shoup (1997) found that total vehicle trips declined by 17 percent after cash out was introduced at various urban and suburban worksites.
Evaluation	Evaluation report prepared by Metro and City of Seattle staff, with some overview findings from marketing consultant. Evaluators assessed the program internally and from the employer’s perspective (A Qualitative Assessment of the FlexPark Product and Sales Strategy:  Employment Transportation Coordinator Interviews) to get at employer and employee barriers. Marketing consultant estimated best case scenario by screening employers in downtown, ruling out high-paid professionals with irregular work hours and sales-based firms, firms under 50 employees.

Sources:
http://knowledge.fhwa.dot.gov/cops/hcx.nsf/384aefcefc48229e85256a71004b24e0/a19c77018189d09f85256dba0063d8f4?OpenDocument.
General cash out:  http://www.vtpi.org/tdm/.
See:  On‑line TDM Encyclopedia – Commuter Financial Incentives Commuter Financial Incentives Parking Cash Out, Travel Allowance, Transit and Rideshare Benefits.