Xerox – Reducing congestion in Los Angeles through Intelligent Parking Management.
Xerox company summary
Xerox is a US based global corporation that sells business services and document technology to companies and governments worldwide but it is most famous for its leadership in the photocopier business. The company is less well known for its pioneering inventions of the computer mouse, desk top computing and other inventions that have since been further developed by Apple, Microsoft and other industry giants.
The problem in Los Angeles: Too much congestion
Motorists in Los Angeles were spending 10 minutes or more driving around, looking for places to park. The potential root cause of the problem? On-street parking prices did not match demand. Prices were uniform within a given area and were often the same, or cheaper, than garages a few blocks over. There was no incentive to park a little further away.
The project goal: change driver behavior and balance demand by achieving 10-30% of the parking spaces on each block being available throughout the day. Ensuring availability was expected to reduce congestion and pollution, shorten travel times, and encourage the use of alternative forms of transportation.
The key question: Could analytics driven pricing be used as a mechanism to manage parking demand and ease congestion?
To answer the key question, the City of Los Angeles in partnership with Xerox commissioned LA Express Park. This one-year pilot program, funded by a $15 million grant from the U.S. Department of Transportation and $3.5 million in city funds, centered around a 4.5 square miles area in bustling downtown Los Angeles.
To achieve the desired result, Xerox developed a highly integrated advanced pricing engine. This system continually compiled occupancy and parking payment data, analyzed it, and pushed pricing data out to customers (who were looking for available spaces) and enforcement officials (who were tasked with arresting and charging illegal parkers) in real-time.
The key challenges in developing the model
The key task was to design an appropriate model of how people choose parking spaces. This model would seek to optimize prices based on a history of observations. Development of this model would be faced with numerous challenges some of which are discussed below:
- It isdifficult to account for the immense flexibility that drivers have about where, when, for how long they stay and for what portion of their stay they are parked legally.
- Populations react gradually, rather than instantly to price changes.
- Drivers sometimes have to revise their decisions because the block they wished to park on is currently fully occupied.
- Finally the whole system has a complicated dependence on its own history.
Despite the challenges, as early as the first six months of the trial, the LA Park Express pilot already realized substantial results:
- Parking congestion decreased by 10%, with spaces easier to find
- Under-utilized parking spaces decreased 5%, as drivers were drawn by lower rates
- Pilot-wide parking rates decreased by 11%, but parking revenue increased by 2%
- 76% of drivers indicated in a survey that they would park in less expensive areas nearby, demonstrating the power of pricing
Are these early wins real? Can simply managing demand through changing prices fix congestion problems in Los Angeles? How can customers (parkers?) game the system? Is this method of congestion management sustainable?