Proposed car share spaces in City of Melbourne at 2021

Later this month Melbourne City Council will decide whether or not it will subsidise all or some of the cost of on-street parking for car share vehicles.

As shown in the exhibit, the proposal is to provide 260 parking spaces in metered streets in the CBD for car share by 2021, with a further 340 in un-metered streets in the rest of the municipality. (1)

It’s also anticipated operators will increase the number of spaces they rent in off-street parking stations from 40 at present to as many as 1,400 by 2021 i.e. only 30% of spaces will be on-street in 2021.

A report commissioned by Council estimates the municipality is currently foregoing around $300,000 p.a. in revenue from metered parking spaces provided without charge to car share operators. The subsidy is expected to increase to $561,000 p.a. by 2020/21 unless operators are charged for the 260 metered spaces.

The report also provides a potential justification for the subsidy; it says car share delivers significant social benefits.

Each car share vehicle replaces ten privately owned vehicles i.e. a net reduction of 9 parking spaces. Moreover, car share users drive 2,000 fewer kilometres per year on average than car owners. (2)

There appears to be little opposition to the idea of Council facilitating and promoting car share, but most Councillors aren’t enthusiastic about continuing to subsidise it.

One of the Councillors, Stephen Mayne, reported in Crikey last week that Council’s Future Melbourne Committee voted 8 to 1 to charge operators for the use of all on-street spaces, whether metered or not. The decision was for a “partial cost recovery model” that will claw back around 80% of the otherwise foregone parking meter revenue.

Combined with the 1,400 off-street parking spaces, that means 83% of car share spaces in the municipality in 2021 will be (almost) fully funded by operators/users.

Apparently both Greens and Labor Councillors took the view that car share operators are private businesses and therefore shouldn’t be subsidised (or at least not fully) by Council. (3)

That’s doubtful logic. How a service is delivered – whether by private or public providers– is largely independent of the issue of subsidy; otherwise fares on Melbourne’s public transport system might be $50 a ticket!

The more pertinent matter is whether or not a subsidy would provide a net social benefit for residents and businesses that wouldn’t otherwise be forthcoming. In my view, the key issues are whether Council should be:

  • Subsidising any form of driving when it’s the densest and most walkable municipality in Melbourne and has by far the best public transport infrastructure.
  • Subsidising an alternative model of driving that promises to significantly reduce the demand for parking spaces and kilometres of car travel compared to ownership.
  • Treating car share users any differently to the way it treats other car owners in the municipality.

Council should have a long term objective of significantly reducing the absolute number of cars on city streets but it’s unrealistic to think cars are going to go away any time soon; for one thing, many of the relevant policy levers aren’t in Council’s hands.

At the 2011 Census, 57% of dwellings in the municipality had at least one car. That’s a big improvement over 61% in 2006, but it’s still a very big number considering this is the city centre. Moreover, the number of dwellings with one or more cars increased in absolute terms from 19,553 to 23,547 over the period.

If the claims made on behalf of car sharing are true – in particular, that it reduces the demand for parking by almost an order of magnitude – then the social benefits are enormous relative to the level of subsidy.

Those nine “saved” spaces could be used for much more valuable purposes than parking e.g. dedicated bicycle paths, wider footpaths, outdoor dining, possibly another traffic lane in some circumstances.

Indeed, if the estimates are right Council shouldn’t just subsidise on-street spaces; it should also be thinking seriously about subsidising the 1,400 off-street parking spaces to make car share even more attractive to car owning residents.

The problem, though, is the claimed benefits are almost certainly exaggerated. As I’ve discussed before (see Does car-sharing reduce emissions?), research by Rand Corporation suggests car share is mainly used by residents who wouldn’t otherwise own a car or buy a second car.

In the absence of car share, these members either wouldn’t make a particular trip or they’d use other modes – like public transport, taxis or Uber – instead. Of course they’d get a real benefit from car share – increased mobility – but it’s a private benefit.

The great bulk of new residents in all those towers going up in the centre of the city don’t own a car but some will nevertheless take up occasional driving via car share if it’s convenient and is available at an attractive price. That’s not providing much of a social benefit though; it might even be negative.

There’s also reason to be cautious about accepting industry claims like “one car share vehicle replaces nine cars”. These are usually extrapolated from the number of members enrolled; hardly a good indicator of actual use when it only costs $49 for an annual GoGet membership.

The real measure begins with how many residents actually pay $10 – $15 per hour plus $0.40 per km, or $85 – $91 per day, to use share cars on a reasonably regular basis. What matters even more from Council’s point of view is how many members substitute car share for owning a car.

If car share is to deliver on the claimed social benefits, it must replace actual cars, not notional ones.

Frankly, I can’t see many of the well-heeled car owners in the municipality abandoning their cars simply to save money. They’ll only switch if owning a car is made so inconvenient that it’s no longer worth the bother compared to other options like car sharing, public transport, taxis/Uber and cycling.

If Council wants to realise the potential social benefits of car sharing it needs to develop complementary policies that make owning a car a pain in the neck for residents and businesses in the municipality. Obviously that’s politically difficult but without parallel measures the rationale for subsidising car share in the centre of the city is weak.

Update: Nice article on Melbourne City Council’s car share debate in The Age on 26 July but ultimately disappoints because it makes crucial error of accepting without question the claims made regarding the social benefits of car share (Car sharing: operators cry foul as Melbourne council moves to up parking costs).

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  1. At present, there are 130 car share spaces in metered areas, 80 in free areas, and 40 in parking stations.
  2. The main reason car share users drive less than owners is they pay the full capital and operating cost by the hour/kilometre; that makes them very conscious of how much they’re spending.
  3. I wonder if Councillors’ concerns about the budgetary impact is shaped in part by the views of existing residents and businesses who don’t like the idea that car share users get dedicated parking spaces in free areas. It’s perhaps a sign of conflict between a new generation of ‘apartment’ residents and established ‘terrace/town house’ residents. See this interesting report on car share in the City of Sydney.