California's 'cashout' plan didn't carry over to Seattle

By Eric Pryne
Seattle Times staff reporter

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It's the law in California. It's called "parking cashout." Some employers there have used it to achieve big drops in solo commuting. When it works, no one loses.

But attempts to introduce it in the Seattle area have flopped.

Here's how cashout works: A company offers workers the choice of a parking space or cash, up to the amount the employer pays each month to provide the parking space.

Those who take the parking option are no worse off. Those who take the cash can use some of it to pay for another way to get to work — a transit or van-pool pass, perhaps — and maybe have something left over.

Employers break even, or maybe even make money, because they're paying for fewer parking spaces.

A 1992 California law requires employers of more than 50 workers who rent parking from a third party to offer employees a cashout option. The law hasn't been widely enforced, but when UCLA urban planning professor Donald Shoup studied results at eight Los Angeles companies that did offer cashout, he found solo commuting had fallen an average of 17 percent.

The drop came even though five of the eight had also dropped the ride-sharing incentives they offered previously. "It's a much better carrot," Shoup says of cash.

But cashout doesn't work everywhere. Most employers own the parking they provide their employees. It's a "sunk" cost. Unless there's another market for the spaces employees give up, there's no way for companies to recoup their cashout expenses.

And the cost of much parking that is leased comes "bundled" with the office space. If companies can't negotiate with building or parking managers to rent fewer spaces, they can't save money.

Parking managers, in turn, won't be interested in negotiating if there's no market for the freed-up spaces.
 
King County Metro thought parking cashout would work in downtown Seattle. In 2001 and 2002, the agency pitched a federally funded pilot cashout program it called "FlexPark" to more than 750 employers, sweetening the deal with a one-time offer of cash — $125 for each drive-alone employee — for firms that elected to participate.

It got just three takers. Only 17 employees of those three firms opted to give up their parking spaces for cash and other incentives.

Why didn't it work? The recession played a part, Metro officials concluded in a report last summer. Employers may have been unwilling to try new ideas. The program was complicated. But the most important reason for the program's failure, the authors concluded, was that there simply wasn't much of a market for it.

Most downtown commuters don't get free or subsidized parking. Those who do are those least likely to give it up, the report concluded. They either need their cars for work or are well-paid senior managers. The marketplace has already taken care of the rest.

"The employers didn't feel that any of their senior people would ever give up their parking space," says Metro's Carol Cooper.

John Resha, executive director of the Greater Redmond Transportation Management Association, says one employer in that city also tried cashout, but is phasing it out.

"It's too effective," he says. "It's costing them more than they expected."

Resha says the firm, which he wouldn't identify, paid drive-alone workers who agreed to give up their parking spaces $75 a month, more than the cost of most alternatives to driving alone. Car-pooling surged.

But the company couldn't recover its costs, he says: Parking is included in its lease. It still had to pay for the stalls it no longer needed or used.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com