Research Note 98-3: Topic = Parking Cash-Out Incentive for Reducing Emissions


 California Environmental Protection Agency

Air Resources Board

 No. 98-3

June 1998


Brief Reports to the Scientific and Technical Community

 Research Division, John R. Holmes, Ph.D., Chief

 P.O. Box 2815, Sacramento CA 98512

 Parking Cash-Out Incentive: Eight Case Studies

 Emissions from cars used by a single occupant for commuting to work are the single largest contributor to poor air quality in many urban areas of the state. Removing some of the incentives to drive alone could help improve air quality. A 1992 California law created a program known as "parking cash-out" that eliminates subsidization of parking for solo drivers. In the present study, parking cash-out programs used by eight firms were evaluated to determine their effectiveness in encouraging the employees to switch from solo driving to using carpools, public transit, or other air-quality-friendly transportation modes. This study was performed by the University of California, Los Angeles.




Significance and Application:

Related Projects:

Many businesses that pay to lease parking spaces offer free or reduced-price employee parking, inadvertently subsidizing solo driving to work. This encouragement is in conflict with air quality management programs whose aim is to reduce vehicle emissions. A 1992 law (California Health and Safety Code section 43845) eliminates the solo driver's "subsidy" paid by many employers and requires employers to provide incentives for commuting alternatives. To achieve this, the law requires businesses with at least 50 employees to offer a parking cash-out option if they subsidize parking that meets specific criteria. The cash-out option offers employees the choice of receiving the cash value of the "subsidy" if they give up their parking space. In this study, the results of the cash-out programs used by eight firms were analyzed to assess the commute vehicle trip and emissions reduction impacts.

The case study firms were identified in consultation with Southern California Rideshare, a regional agency that assists nearly 5,000 employer sites with rideshare programs, and the City of Santa Monica which enforces the state's cash-out requirement as part of its Transportation Management Plan Ordinance. The firms ranged in size from 120 to 300 employees, with a combined total of 1,694 employees. The price of parking at the worksites ranged from $36 to $165 per month.

The data for the case studies were taken from the firms' Trip Reduction Plans submitted annually to the South Coast Air Quality Management District. The employers were required to conduct employee transportation surveys in a carefully prescribed manner, and to report the results in a uniform format. To assess the impact of the parking cash-out programs, commute mode change and vehicle trip activity were analyzed for the year before and after the firms began to offer employees the cash-out option. Average annual auto emission factors developed by ARB were used to determine the impacts of reduced trips and vehicle miles traveled (VMT) on emissions.

Additional information on implementing a parking cash-out program was collected from interviews with transportation coordinators of five of the firms participating in the study.

With the cash-out programs implemented, the average share of solo commute drivers decreased from 76 percent to 63 percent, a 17 percent decrease. The reduction in solo driving among the eight firms ranged from 4 to 29 percent. Carpooling increased from 14 to 23 percent; transit ridership increased from six to nine percent, and walking and bicycling increased from 2.3 to 3.4 percent. This shift in mode of travel led to fewer vehicle trips and VMT, which were reduced by an average of 11 and 12 percent, respectively, both with a range of five to 24 percent. The reduction in vehicle trips and VMT resulted in a reduction of vehicle emissions of 12 percent, with a range of 5 to 24 percent for the eight firms.

The eight firms' average commute subsidy per employee increased from $72 per month before providing the parking cash-out option to $74 per month after implementing a parking cash-out program. One firm that eliminated parking subsidies incurred savings of $70 per month per employee. The other seven firms increased subsidies by an average of $14 per month, with the range of increase $6 to $33 per month. The five employer representatives interviewed indicated very little administrative difficulty in implementing the parking cash-out programs.

The parking cash-out law is a self-implementing statute under the administrative authority of the Air Resources Board. Unfavorable tax implications caused many employers to delay implementing the law, making it impossible to obtain a random sample of employers for this study. The results therefore may be unrepresentative of what will occur when other employers cash out their parking subsidies. Nevertheless, the case studies indicate that single-occupancy vehicle trips and emissions can be substantially reduced when employers subsidize the alternatives to parking to the extent that they subsidize parking. The results become more significant considering that enacted 1997 federal legislation eliminated the unfavorable tax implication, which may result in more widespread implementation of the program.

Related studies funded by the ARB include (ARB contract numbers are in parentheses): Transportation Pricing Strategies for California: An Assessment of Congestion, Emissions, Energy, and Equity Impacts (92-316), Impacts of Compressed Workweek on Vehicle Trips and Miles Travelled (A132-136), and A Survey and Analysis of Employee Responses to Employer-Sponsored Trip Reduction Incentive Programs (A932-187).

 This research was conducted under contract with The University of California, Los Angeles (ARB Contract No. 93-308). Comments or questions can be directed to the contract manager, Fereidun Feizollahi, by mail, FAX (916) 322-4357, phone (916) 323-1509, or e-mail. For an index of Research Notes, call (916) 445-0753 or FAX (916) 322-4357.

 Copies of the research report upon which this Note is based can be ordered from:

National Technical Information Service
5285 Port Royal Rd
Springfield VA 22161
Request NTIS No. PB98-126162

 Title: Evaluating the Effects of Parking Cash-Out: Eight Case Studies.

 Author: D. Shoup