Parking rate policy needs 'sorting out'<\/p>\n
The Jakarta city administration is involved in a dispute over
\nparking fees with private parking operators, with the former
\nthreatening to close down the booths and equipment of defiant
\noperators on May 22, allowing private vehicles to park for free.
\nSenior lecturer in transport engineering at the Bandung Institute
\nof Technology Willy Tumewu takes a closer look at the issue.<\/p>\n
BANDUNG (JP): A vehicle is generally more often stationery
\nthan moving, either at home or one's destination. When a vehicle
\nis parked at a destination other than the home, what services are
\nwe entitled to when we pay for parking?<\/p>\n
Parking can be categorized as on-street or off-street. On-
\nstreet parking fees are supposed to contribute to local
\ngovernment revenues; off-street parking is organized by the
\nprivate sector, and, subsequently, should the revenues be
\ntaxable?<\/p>\n
Basically, a parking fee covers the rent of a space in which
\nto leave a vehicle for a certain period, either with or without
\nthe help of an attendant, and with various levels of attendant
\nservice. But, terminologies like valet parking and secure parking
\nare supporting the misconception that a parking fee covers
\nsecurity.<\/p>\n
As both on-street and off-street parking fees affect the
\ngeneral public, the local government may assume that it has the
\nright to control both in the interest of the general public.<\/p>\n
But, parking can also be regarded as an optional service for
\nvehicle users for which they have to pay accordingly, when they
\ndecide to park there.<\/p>\n
A parked car needs a stall of 2.5 meters by 5.0 meters. When
\nalleys and ramps are added, then one car needs on average 25
\nsquare meters. Assuming that the cost of a multistory parking
\nstructure is about Rp 0.5 million per sqm, the cost
\nof providing a standard parking space is about Rp 12.5 million,
\nexcluding the price of the land.<\/p>\n
At a basic rate of Rp 1,000 per hour for cars, one parking
\nspace may generate some Rp 10,000 per day, or Rp 3.5 million per
\nyear. This would only cover the operational and maintenance
\ncosts, plus the cost of capital, but not any coverage for
\nsecurity.<\/p>\n
Surface parking on available land needs less investment; also
\nmotorcycles are more space efficient and hence more cost
\neffective, but these form a small part. So, parking on its own
\nmay not be a profitable enterprise at this basic rate.<\/p>\n
When parking is provided as part of an establishment, the
\nappraisal should be on an integrated basis. For example, parking
\nas part of a shopping center is a necessary component without
\nwhich it cannot operate.<\/p>\n
The cost and benefit of providing parking facilities should
\nthus not be appraised independently, and this applies to Jakarta,
\nwhere almost all off-street parking is provided by an
\nestablishment.<\/p>\n
The value of one parking space can be estimated from the
\nadditional profit the establishment makes from providing one
\nadditional parking space. With a profit margin of say 10 percent
\nand total average spending of Rp 50,000 to Rp 100,000 per parked
\ncar, the profit or value of the parking space far exceeds the
\ncost of providing it.<\/p>\n
Not surprisingly, as an attraction, the establishment may give
\na parking voucher or some other token to its \"preferred\"
\ncustomers to cover the parking fee, and still make a profit. By
\nway of illustration, one downtown parking area requires a minimum
\nRp 100,000 cashier's slip to be eligible for a normal parking
\ncharge.<\/p>\n
But, a nearby establishment can also benefit from the parking
\nspace. It can simply give a, say, Rp 2,000 \"discount\" in cash to
\ncustomers who spend more than a certain amount to cover their
\nparking fees, and still make a profit, but without having
\nprovided the parking facility.<\/p>\n
Then there is free parking, which is sometimes used as an
\nattraction by an establishment, but this can also be exploited by
\nnoncustomers, for example, as a transition stop before visiting a
\nnearby destination.<\/p>\n
However, would an establishment forego an opportunity to
\ngenerate profits from its parking operation? When parking places
\nare scarce, or when customers have no other option, parking rates
\ncan be raised without adverse effects on business. But is this in
\nthe interest of the general public, especially when no nearby on-
\nstreet parking is available?<\/p>\n
Furthermore, to charge parking for dropping off passengers is
\nnot a fair business; for example, compare parking systems at
\nrailway stations Gambir and Jatinegara, or airports Soekarno-
\nHatta and Halim Perdanakusuma. The secure parking system tries to
\novercome this by introducing a few minutes of grace period.<\/p>\n
Parking fees can also be used as a traffic management tool. By
\napplying high parking fees in a certain area, it is expected that
\nvisitors would convert to using public mass transport and hence
\ncause an overall decrease in traffic flow.<\/p>\n
But, for this purpose the traffic authorities must have full
\ncontrol over the number of available spaces for both on- and off-
\nstreet parking, and also on the level of parking rates.<\/p>\n
Applying parking fees on an hourly basis, or which increase
\nprogressively with duration of parking, is a means of
\ndiscouraging parking by commuters, which hence cause a reduction
\nin commuter trips by car, but without affecting business visits,
\nwhich normally need only a short parking period. Here the
\nauthorities also need full control over the area.<\/p>\n
An advance payment for parking, together with payment of the
\nannual STNK vehicle registration, should not be considered as an
\noption for Jakarta because of the limited supply of parking
\nspaces. There would be no incentive for road users to control the
\ndemand for parking, and there would also be no incentive for
\nparking attendants to provide a service.<\/p>\n
Also, parking is a commodity which can not be stored,
\nregardless of how many times a car has been parked before, when
\nthere is no vacant parking space at the time of demand, a vehicle
\nwill be refused the service, and the driver will feel cheated by
\nthe system.<\/p>\n
The private sector, which controls the off-street parking, is
\narguing with the local government over legal matters and the
\nlevel of parking rates. It is not clear what the real issues are.
\nThe public certainly prefers the lowest possible rates, but the
\npolicy behind the rates should first be sorted out.<\/p>",
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