Parking charges are simply charges levied on motorists for the use of parking spaces, either in dedicated car parks or in identified on-street parking bays. They provide one of the most widely used forms of parking control. They act to suppress the demand for parking and they enable demand to be kept below the supply of parking space, thus they can reducing time spent searching, and have the potential to contribute to demand management (Kelly and Clinch 2006).  However parking charges can be a politically fraught area, with politicians reluctant to set charges sufficiently high to be viable mechanisms for demand management (Marsden et al. 2013).  

Terminology

There are three commonly used terms to describe this policy of requiring motorists to pay to park their vehicle: Parking charges; parking pricing; and parking fees. We view these three terms as being inter-changeable with one another.
The ability to apply charges for parking depends on the type of parking space in question. Types of parking space fall into the following categories:

• Public spaces
  On-street - identified parking spaces on the highway (usually adjacent to the footway but sometimes in the central reservation)
  Off-street - dedicated car-parks operated by local authorities or private companies
• Private spaces (off street)
• Residential
• Non-residential.

In general, policy-makers have direct control over public on-street parking spaces and public off-street, local authority operated parking spaces. Hence, it is charges for the use of these categories of parking spaces which may be most readily used as a policy instrument.

Privately operated public parking spaces are commercial services for which commercial charges are made. In general, policy-makers have little control over these charges; there are exceptions to this though: legislation is available in some countries to permit the licensing of privately operated public car parks, but often this requires that operators must be compensated for losses.

The normal expectation is that private parking spaces - residential and non-residential - are not charged. However, there are exceptions to this Charges for private parking space, e.g. legislation exists in the UK to permit local authorities to introduce a 'Workplace Parking Levy' which would represent a charge for private non-residential parking at the workplace, though the levy would be on the employer who would not necessarily pass it on as a charge to individual users. In addition, some employers in the US have introduced charges for workplace parking as part of their 'Commute Trip Reduction' programmes and in the UK under Company Travel Plans.

Types of Parking Charges

For public parking spaces, it is usual to distinguish between 'short stay' parking and 'long-stay' parking. Short stay parking charges are often defined as an hourly rate, allowing the user to park up to a maximum number of hours. For example, the charge may be one USD per hour, up to a maximum of three hours. Long-stay charges are often defined as a fee per day, or sometimes per half day. Separate short and long stay car parks are often defined, with a minimum charge for the latter which is similar to the maximum charge for the former. Another approach is to have an hourly rate which rises or falls with duration.

Variable parking charges may be fixed rate, whereby hourly rates do not vary by the hour or by time of day, or may be variable, whereby there are higher hourly charges for peak periods within a day and lower hourly charges for off-peak periods or different rates for week days as opposed to weekends.
For private parking spaces, charges for customers may be differentiated from charges to employees so as to give priority to one or the other. This prioritisation may be reinforced by locating parking spaces for customers separately from parking spaces for employees.

Parking on residential streets is often not charged. However residents’ permits, for which a fee may be payable, are increasingly used to control the over-demand for parking in residential areas see parking controls.  A further potential use for charging for parking on residential streets is described by Shoup (1995) and involves charging for parking on residential streets and using the revenues to benefit local communities, as part of a 'parking benefit district'.

Another means of charging for private residential parking spaces is to 'unbundle' parking from housing purchase or rental, so that parking spaces can be purchased or rented separately as required. In the US, this can form part of 'Location Efficient Development'.

Payment of parking charges is usually at point of use, i.e. via meters, pay and display machines, pay on exit barriers or similar devices. However in some cases monthly or annual passes or permits are available for users to purchase; this may be provided as an alternative, more convenient means of payment or may actually be the prime means of paying for parking, e.g. where payment per hour or per day is not provided for.

The type of parking charge to be introduced will depend on the objectives being pursued and the type of parking space in question. For example, if the objective is to reduce commuting by car then priority amongst public parking spaces would be given to short stay over long stay parking, or if there was a more general objective to reduce peak period congestion then there may be higher charges for parking during the peak period.

Technology

The technology of parking charges relates to the method of payment and enforcement used. The different methods may be characterised as follows:

• Attendants
  No technology is provided, but instead users pay an attendant either for a pre-specified fixed period of parking, usually paid on entry, or for the period elapsed since entering the car park, paid on exit. Enforcement is via the attendant monitoring entry and exit to the car park.
• On-street Meters
  A mechanical or electronic meter is sited at each parking space, into which users insert payment based on being parked for a fixed period of time. The more sophisticated electronic meters allow the user to pay for the exact duration required, as opposed to a fixed unit of time, e.g. an hour. Enforcement is via roving inspectors monitoring the meters and imposing penalty fines where appropriate.
• Pay and Display Ticket machines
  Often, though not exclusively, used for off-street parking spaces, whereby one or more machines will serve an entire car park. The user inserts payment for a specified period of parking and the machine prints a ticket which the user displays on their car windscreen. Enforcement is generally via roving inspectors monitoring the displayed tickets, imposing penalty fines where appropriate.
• Pay station machines
  Often used for off-street parking spaces, whereby one or more machines will serve an entire car park. On entering the car park the user picks up a ticket stating their time of arrival and on exit they insert this ticket into the pay station machine which records the time of departure and, accordingly, calculates a charge. The more sophisticated, electronic machines allow the user to pay for the exact difference between arrival time and departure time, as opposed to rounding that to the nearest unit of time, eg an hour. Enforcement is generally via carefully controlled entry to and exit from the car park.
• In-vehicle meters
  Users pre-pay to use a small electronic meter, displayed in the vehicle whilst parked, which counts down minutes and registers the period of time parked. Enforcement is via roving inspectors monitoring the meters, imposing penalty fines where appropriate.
• Automatic detection
  Vehicles are automatically detected by the system, e.g. via number-plate recognition, when entering and exiting the parking area. A bill is then either presented to the user on exiting the parking area or sent to the user's home address. Enforcement is generally via carefully controlled entry to and exit from the car park.