Employer parking subsidies, mode choice, and public policy

This dissertation explores the reasons why employers subsidize parking, analyzes the impact of those subsidies on travel mode choice, and evaluates a proposal to change employers' parking subsidy policies. The research uses a sample of downtown Los Angeles office workers and their employers. More than half of the office worker drivers in downtown Los Angeles receive subsidized parking. Employers generally subsidize parking to attract and retain workers, encouraged by favorable tax treatment of parking subsidies. A multinomial logit analysis is used to examine the sensitivity of mode choice and parking demand to parking subsidies and price. The model predicts that 18 percent fewer commuters will drive alone when they have to pay to park. Accordingly, public policies designed to address traffic congestion, air pollution, and energy use must deal with employers' parking subsidy policies. This research proposes and evaluates a new policy recommendation: require employers to provide those entitled to subsidized parking the option of taking a cash commute allowance instead of the parking subsidy. This proposal is found to be cost-effective and feasible.