Do you adjust on street rates every time too many spaces are empty?
I had breakfast with a manufacturer of on street equipment yesterday at the IPI show. We spoke about a number of topics but he asked me what I thought about market based pricing. The way he asked the question made me think he didn’t think much of it.
I probed a bit and found that he didn’t believe that prices could be reasonably change hour by hour to fit the number of cars on the street. “How would you communicate that to drivers?” he said.
He noted that his product was perfectly capable of changing rates on a moment’s notice, meter by meter. That wasn’t his point. He was musing that the good Professor Shoup might have a bit of an “ivory tower” approach and the real world works differently. Good Point.
I haven’t reviewed this with the Shoup-dog, but from my point of view you are throwing the baby out with the bath water. It seems to me that to work, the word has to get out as to the rates in an area at a certain time. When the new theater opens, rates will go up in that area when it is usually full (Friday night and on weekends and holidays) but they will go down on Monday PM and etc. We find that an area with tony clubs and restaurants may have higher rates during the evening but low rates during the day.
Rates are adjusted as data is collected about occupancy in each area and raised or lowered so that there is a free space on each block space all the time. Sf Park is adjusting rates monthly, I believe and then not more than a quarter a go. Who knows that may be too often. You need to be sure that the change in occupancy isn’t a one-time anomaly, say the opening of Star Wars vs the opening of Hangover IV.
To me it just makes common sense that the rates are adjusted often enough to make a difference, but not so often that you lose sight of the objective