Merchants are wrong about parking meter fees

This blog takes the position that high-profile claims by many merchants about parking are untrue. I mean merchants no disrespect: I have the highest regard for the entrepreneurs that give Oakland its flavor. Merchants are on the front lines of the economy, and contribute enormously to Oakland’s employment and sales tax base. Merchants deserve the city’s attention and dedication. But transportation policy is not their strong point.

While merchants are a vital and valuable part of the community, their perspective on transportation is not as well-rounded as one might assume, and, as has happened before, many merchants have taken a position contrary to the best interests of their customers. The claim that higher meter fees and longer hours are hurting business is not borne out by a careful examination of the evidence.

Some merchants argue that the new meter fees have had a direct and immediate impact on their livelihoods. They claim very frightening downturns in their business: in Grand Lake, a salon claims to suffer a one-fifth fall in revenue, a bakery says sales are down 25%, and Alan Michaan of the Theater says his sales are off by half. They attribute these huge declines in their revenue to a $.50/hr parking meter fee increase, as well as a two-hour increase in the hours of operation.

This is hard to believe for two reasons. First, it usually takes consumers a fair amount of time to change their behavior in response to price signals. For example, car driving has continued to fall after gas prices came off their 2008 highs. A less inspiring example is that consumer habit is a major barrier to establishing new retail districts in Oakland. So it seems unlikely that one trip to Grand Lake, paying more than expected for parking, would result in an immediate and drastic change in consumer habits.

Second, fifty cents an hour is not very much money. Dinners in Oakland for two often cost over $50. $4 more in evening meter fees, which many customers expect because of dining experiences in San Francisco and elsewhere, is about the same as sales tax. If $4 is crippling to one’s transportation budget, then the extra cost of driving to a restaurant with dedicated parking in Walnut Creek or Lafayette would be hurtful too (and of course there are establishments within Oakland with off-street parking). Despite what some merchants imply, street parking is not free or unlimited in Emeryville, Berkeley, Lafayette or Walnut Creek. Daytime customers who may be buying the apocryphal spool of thread are paying an extra fifty cents an hour more, which does not justify a substantially longer and less convenient trip. It’s really hard to believe that Oakland charging drivers an extra dollar would have a substantial and immediate impact on store receipts.

So what is going on? Are the merchants lying? No, they’re not, although I will point out that merchants’ business statements are held to a far lower standard than that applied to larger enterprises. It’s true that business is bad for Oakland merchants. But is that really a surprise? Merchants should have been prepared for a hot, difficult summer, given that the recession is (hopefully) hitting its bottom, and there is usually a summertime decrease in local business. Rebutting one neighborhood’s example, City Homestead writes:

It’s critical to know how much, if any, business the commercial districts are losing that’s directly attributable to the parking fees and not to the economy overall. (I’ll add that in Grand Lake’s case, my read as a neighborhood resident is that business has been down for months—it’s not a new thing. We’ve lost a number of businesses, and most of them closed well before the increased fees kicked in, so I’m wary of attributing too much to a drop in July business.)

So there are other explanations for a painful business downturn. A source reports that one large and well-known Oakland restaurant has suffered, since July, a 40% decline in business. This restaurant enjoys free dedicated parking. So it may not be true that recent decline in business can be attributed to increased parking fees.

Even the upset merchants themselves date their decline in business to before the meter fees were increased. Several say that business has declined since the beginning of July, when the Master Fee Schedule was passed. But the fees didn’t come into effect until July 11; it was only two days later that Michaan began his protest. While many merchants believe they benefit from cheaper parking for their customers, it is far from clear that meter fees have had a real business impact.

Some merchants are asking the City Council to believe that customers cannot afford an extra dollar for shopping or four dollars for dining, that they have drastically changed their weekly routines, and did so immediately after a Council meeting at which Alan Michaan was the only person to speak against the fees. It doesn’t make sense. There isn’t enough evidence that higher meter fees and longer hours are actually reducing business receipts for the Council to reopen the budget process. Merchants’ assumptions need to be challenged: is cheap street parking really that important to Oakland retailers? In conclusion, please enjoy a choose-your-own-adventure story inspired by Paramount Theater Boardmember Clinton Killian’s Oakbook op-ed.

It’s a bright and breezy summer Saturday. You’re half of a hot couple and you want to roll your Prius to Ozumo at 7pm, but are sensitive to parking problems. You could spend $10 on the valet, $2 on the meter, or go somewhere else. Emeryville’s meters are cheaper, but they run all night, so if you linger over langoustine at Town Hall you’ll lose more than a Jefferson. PF Chang’s at Bay Street will let you park for free for two hours, but mediocre fried rice doesn’t really go with your outfit. You could cruise all the way over to Lafayette, enjoying some Lady GaGa on the way, but Yankee Pier may not be your scene, gas just keeps going up, and all that time in the car is time you’re not admiring your date. If you’re determined to pinch pennies, you can take your high-heeled, clutch-toting companion to the Sinaloa truck on First Avenue, where there’s free parking and the lengua tacos with pickled carrots are cheaper than Ozumo’s tender toro. What do you do?

The classy answer is to go to Ozumo and pay the valet, or cough up the $2 and walk a block. I dare say that’s your date’s opinion too.

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