The LA Times has an interesting article about market based pricing in Santa Monica, CA. The idea is to change the rate for pricing in downtown areas in response to need. A certain percentage of spots should always be open: if too many spots are open, the price is too high, if too many spots are filled, the price is considered too low. An insightful quote is given by Ventura City Manager Rick Cole:
“It’s illegal for a car to be homeless but not for people,” he said. “As a result, we devote a huge amount of extraordinarily valuable real estate to asphalt and concrete and then we give it away.”
This is an idea championed by Donald Shoup of UCLA, who wrote The High Cost of Free Parking. More information about his market based pricing theory is available on his site and in an informative interview on Streetfilms.