This is Different: A Parking Auction at Chapman University
John Van Horn
Chief Randy Burba at Orange County (CA)’s Chapman University knew that like most college campuses, the ratings students gave the parking program couldn’t get much lower. The University’s president, James Doti, in response to student satisfaction surveys wanted to fix the problem and put Burba together with Economic Science Institute Professor David Porter with the challenge to create more space at peak times. However, as Dr. Porter points out, they did not create more space, but just better allocated the spaces that already existed.
Burba and Porter knew they had a difficult task. The problem couldn’t be solved by traditional means because parkers wanted parking to be free, and wanted the space nearest to their destination. Their solution was to institute a “Dutch Clock Auction” to set the true value of the parking spaces on campus and enable parkers to purchase spots online using the auction’s mechanism.
Dutch Auctions originated in Holland and are used to set pricing for the world’s largest flower marketplace. The pricing starts at a high price and then is reduced at certain time periods throughout the auction. People bid as the price falls, locking in their opportunity to purchase the goods for sale and depending on the rules of the particular auction, also lock in their price at the time they bid. The auction continues until all products available are sold. In Chapman’s case, the price of the parking spaces is the lowest bid when all spaces are sold.
Two types of spaces were auctioned at Chapman. Reserved spaces which normally sell for $330 a year and lower cost spaces that normally sell for $50 per year. So there are two auctions run, one for each type of space. Sixty five spaces are auctioned off in the reserved area, and 100 spaces in the lower priced lot.
From the University’s web site:
This fall Chapman University is auctioning off permits for Reserved spaces and The Villa Park Orchard (VPO) Lot. The auction will be held online and the VPO and Reserved Space auctions will be simultaneous. The auctions will begin with a high price, and every 30 minutes this posted price will fall.
In order to bid, you can either enter a bid at the current posted price, or indicate the most that you are willing to pay for a permit.
The auction will end when the number of people willing to
pay at least the current posted price equals the number of
All winners will pay the final (lowest) posted price, even if they bid more.
• Winning bidders in the Reserved Space Auction must buy a $330 parking permit in addition to paying the final auction price.
• Winning VPO bidders pay only the final auction price. VPO winners who have already paid the $330 fee will be reimbursed upon return of the purchased decal.
• In the event of a tie, the bidder who placed his/her bid first will win the permit.
VILLA PARK ORCHARD (VPO) AUCTION
You will be bidding for a permit that allows you to enter the Villa Park Orchard Lot, and no other lot on campus, Monday through Friday. On Saturdays, Sundays, and during the Summer break this permit can be used in the same area Commuter and Staff Permits are valid. This permit is valid August 30, 2013 through August 15, 2014.
105 VPO permits will be auctioned. You can begin placing bids on Monday August 19th at 9:30 a.m. (PST).
The starting bid is $50; the price will drop by $1 every 30 minutes between 10 a.m. and 10 p.m. on Tuesday August 27th and Wednesday August 28th.
VPO Auction winners DO NOT need to pay the $330 parking fee in addition the final auction price. If you have already paid the $330 fee, you will be reimbursed the difference between what has been paid and the cost of the VPO permit, upon return of the $330 permit.
The VPO Auction has ended. Winners have been notified via e-mail. All 105 available permits went for $50. Congratulations to the winners!
Although bidding was relatively slow the first year, things picked up as the students began to get the idea. By the third year, the auction was sold out within hours of opening with reserved spaces going at $1001 plus the $330 price. The lower priced lot went for the bid price only, the starting price of $50.
Burba and Porter decided to limit the number of reserved spaces in the auction to counter possible charges of elitism (although some student groups jumped on that bandwagon the first year and to ensure that there was adequate turnover of spaces for the majority of parkers.
Students and faculty have become accustomed to the auction and it runs very smoothly. The majority of reserved spaces are typically won by students. Parking satisfaction is always challenging but there are certainly some very satisfied people as a result of the auction. As a university it feels right in trying to take innovative approaches to issues.
Chapman is a fast growing University and the parking program is in a dynamic state. Old parking structures are giving way to new buildings and parking is starting to move away from campus. New challenges are arising in supply shuttles from off campus parking and the on campus parking is becoming more valuable. Prices will likely increase for the auction spaces which never sits well with participants. However, the university community is becoming more familiar with the process and the auctions are now part of the culture at Chapman. However, more innovate pricing structures and incentive schemes will have to be developed as the university grows and Burba is always ready to try new ways to solve one of the most difficult allocation problems on university campuses.
John Van Horn is editor of Parking Today. He can be reached at firstname.lastname@example.org
Article Abstract from August, 2014