Request a Demo

Less workplace parking

Researchers Stefan Tscharaktschiew and Felix Reimann from the Institute of Transport and Economics, Technische Universität Dresden, Dresden, Germany, published an article in Journal of Intelligent and Connected Vehicles in 2022, regarding workplace parking with fully autonomous vehicles.

The article provides an up- to-date review on this issue. Here are some of the key issues.

The advent of fully autonomous vehicles (FAVs) – also referred to as self-driving cars or driverless cars – is projected to revolutionize the world’s transportation system. In particular, safety improvements are undisputed. As driver-related errors are suggested to be the main reason behind the overwhelming majority of all crashes, these sources of accidents may disappear as vehicles become increasingly automated.

Autonomous vehicles also have the potential to improve traffic throughput. Because vehicles can react to the environment much faster than humans, they will be able to maintain smaller headways with the vehicle in front, thereby, other things equal, increasing the capacity of roads. Also, FAVs open up new mobility options to those who currently cannot drive, e.g. children, adults without driver license, elderly and disabled people.

According to the study, adopting self-driving cars is beneficial as it diminishes the utility reducing the effect of car commuting time. Generally, for FAVs there is no need to park close to their destination or even to park at all. Instead, FAVs can seek out free on- or off-street parking, just cruise (circle around) or even return home. So, self-driving cars may offer unprecedented opportunities to those not having access to and not making use of employer-provided and -paid parking.

Self-driving cars enable vehicle repositioning without human input, which substantially improves vehicle sharing within (and between) households. The research points out that the potential of FAVs to reduce the demand for and the supply of parking should be a major issue of concern. As of today, parking is one of the largest consumers of urban land. Even in relatively dense cities, substantial space is given away to park private vehicles. Much of this space sits unused at any given moment in time and in many cities the number of parking spaces exceeds the number of vehicles by a multiple.

Interestingly, a crucial observation made by the authors is that none of these studies – even though all are to a large extent concerned with commuter parking – discuss the case of employer-provided parking, although workplace parking is a widespread phenomenon and in many instances the dominant form of commuter parking.

More than 80% of all firms in the US provide parking for their workers. In San Diego and Los Angeles, around 90% of employees receive employer-provided parking. 45% of Dutch workers use employer provided parking which, on average, corresponds to 26 parking spaces per firm. Moreover, about 80% of car commuters are reported to make use of parking at the workplace in the Netherlands, suggesting that workplace parking is much more important than curbside parking. Similar orders of magnitude for Barcelona (Spain) and Dublin (Ireland), respectively.

One of the most important features of workplace parking is that it is usually either provided for free or at a meager direct cost to the employee. For example, in the USA, only a few percent of the parking resource costs are paid by commuters. In Barcelona, about 80% of those employees who use an employer provided parking space, get it for free.

The researchers stress that there is overwhelming consensus that in many cases employer-paid parking can be regarded as excessive and the literature has identified three main reasons. The first reason is related to the distortive preferential tax treatment of the fringe benefit parking. As wage income is taxed, whereas workplace parking as a fringe benefit in kind is usually not, firms can save labor cost for each parking space they offer at the expense of government tax revenue.

The second reason relates to parking standards. In the absence of minimum parking requirements, parking is unbundled from other transactions (e.g. the rent of the property), implying that the parking cost faced by firms is a marginal cost. In the presence of a binding minimum parking requirement, however, a firm incurs no extra cost, as the regulation turns the marginal cost of parking into a fixed cost through bundling the cost of parking spaces into the total cost of development. Both types of disincentives distort an employer’s parking supply decisions and, as a consequence, create a deadweight loss owing to excess supply of parking.

The third reason is under(der)priced road transport externalities. Inefficiently low pricing of road transport stimulates car commuting and so an overconsumption of parking. Excessive workplace parking, in turn, is accompanied by several further negative effects. The group of car commuters suffers from more severe road congestion because workers with access to workplace parking are usually more car-oriented. Similarly, the society as a whole gets worse through pollution and further adverse impacts of car commuting. Further, it worsens competitiveness and urban vitality by reducing the land area available for production, housing, parks and other purposes.

The various weaknesses associated with employer-provided parking and the observation that governments seem to be reluctant to enforce policies to reduce the level of workplace parking make it worthwhile to place the focus on self-driving cars and their auspicious capability to reduce parking requirements.

General assumption on vehicle usage

Ownership of private cars has been on the rise since the invention of the automobile. Autonomous vehicles technology could then be the stimulus for a new mobility system in which members can call up distant autonomous vehicles using mobile phone applications.

However, recent results from stated-preferences studies suggest that, in general, people will (on average) continue to favor owning cars over sharing them even in an era of FAVs.

Apart from stated-preference approaches, comprehensive cost-based analysis of autonomous mobility services reveals that in the era of autonomous vehicles, out-of-pocket costs of private car usage are likely to be still lower than for most other mobility concepts.

The authors conclude that a substantial share of vehicles may remain in private possession and that private cars, whether conventional or fully automated, will remain the preferred travel mode. In fact, most studies point out that when sharing services will grow owing to car automation, this will mainly be at the expense of public transport rather than private car ownership.


The main finding of the literature on employer-provided parking is that the level of workplace parking as derived above is excessive, meaning that it exceeds the socially optimal level. In the light of this, the researchers understand that reducing or even eliminating employer-provided parking should be the goal.

According to the study, one option how this could be achieved is to account for the fringe benefit of workplace parking in the income tax code. Another option is to force employers to offer commuters the option to choose cash in lieu of any parking subsidy offered by the firm, better known as “ parking cash-out. However, as shown in previous work, these and other options have not become widespread. Governments seem to be reluctant to enforce these or similar policies to reduce the level of workplace parking.

The authors consider what would happen if self-driving cars would already be available today. Could this make a contribution to a reduction of employer-provided parking?

Recent studies on commuter parking in an age of self-driving cars suggest that with the capability of FAVs to get rid of the need to park close to the workplace, the number of parking spaces demanded by commuters will decline. This would be good news, because, as of today, parking is one of the largest consumers of urban land. None of the studies, however, is concerned with the special case of employer-provided parking, although workplace parking is a widespread phenomenon and in many instances the dominant form of commuter parking.


The authors emphasize that their perspective on commuter parking differs from the recent literature because in the case of employer-provided parking, the firm’s decision to offer its employees a parking space and the incentive of employees to accept the offer are closely interrelated because of the fringe benefit character of workplace parking.

The tax code significantly affects the extent of workplace parking. An increase in the income tax will lead to more parking at the workplace if parking is not treated as a taxable fringe benefit in the tax code (low imputed value. With a higher income tax, firms have an incentive to substitute parking for wages. Hence, it could be used as a policy instrument to reduce workplace parking.

Thus, the researchers conclude that, the regime of switching from employer-paid parking to employee-paid parking – whether it be through policy intervention in the form of fringe benefit taxation or by means of other measures such parking cash-out – may be even more justified in a world of self-driving cars than today.

Contacts Want to learn how Octo can transform your business?

We are happy to hear from you.
Discover our tailor-made solutions.

Get in touch
a Contributor!
We’re always looking for interesting ideas and content to share within our community.
Get in touch and send your proposal to: