Could the Incentive Policy of Shared Parking Be Sustainable? The Viewpoint of Personal Risk Aversion

Abstract

Using an incentive measure to encourage people to share their private parking spaces could be an effective strategy for urban parking problems. This paper discusses an innovative mechanism of shared parking, “FlexPass,” which applies a reverse auction in which drivers propose bids in line with their individual expectations to share their idle parking spaces. The auction mechanism, hypotheses on bidding process principles, the competitive environment, and the risk-averse decisions of providers with regard to parking spaces are analysed to explore the sustainability of the economic benefits obtained for FlexPass parking spaces. A total of 216 respondents from the University of California, Berkeley, were invited to participate in bidding in an actual survey during their daily use of parking spaces. The analytical results show that operational rules based on risk aversion can enable profit-seeking with a bounded capability to obtain considerable economic benefits and release parking resources in an environment of demand competition. Particularly in some scenarios, FlexPass would sacrifice a certain monetary income to ensure the perceived benefits of parking space providers. With the improvement of people’s enthusiasm for participating in shared parking, the benefits to individuals and parking lots would be further enhanced, suggesting that our mechanism can operate sustainably over the long term. These findings are helpful for policymakers to formulate feasible shared parking policies from the perspective of monetary incentives.