“Free” Parking Has Hidden Costs

ParkingMeterRedwood2.jpg ParkingMeterRedwood1.jpg   Two views of the new parking meters in Redwood, California.  Source of photos:  online version of the WSJ article cited below.

 

Economists have long made the case that the solution to the parking crunch many cities face lies not in more free or cheap parking but in higher prices. The idea is that higher prices result in a greater churn — and get more people on buses and subways — which leads to more open spaces. But this notion has often run up against city planners and retailers arguing that cheap and plentiful parking results in more commerce and, thus, higher sales taxes and a vibrant economy.

Now, in places like Redwood City, some officials are finally listening. One reason is that after decades of losing people to the suburbs, many city centers are swelling again. Many of these new residents are bringing cars with them, creating the kind of traffic that makes them yearn for the suburbs again.

One of the most influential of the parking gurus is Donald Shoup, a professor at the University of California, Los Angeles who commutes on a bicycle. Since the publication in 2005 of Mr. Shoup’s "The High Cost of Free Parking," he has become something of a celebrity at academic gatherings and parking-industry meetings. Lines form at his book signings. "He’s a parking rock star," says Paul White, of Transportation Alternatives, a New York group that advocates for pedestrians and bicycles.

. . .  

Dan Zack, downtown development coordinator for Redwood City, has bought in. A few years ago, his boss presented him with a problem. "He said, ‘We’re adding a million visitors every year, but only 600 new parking spots — make it work,’ " Mr. Zack recalls. After visiting neighboring cities and reading books like "The Dimensions of Parking," Mr. Zack was handed an article by Mr. Shoup.

The city recently raised rates to 75 cents for some prime downtown spots that had been free, and ditched its one-hour time limits, so cars can prepay for as long as they’d like. The move has helped steer more cars to underutilized parking garages away from the main drag.

. . .  

San Francisco, perhaps more than any other city, shows how radically some cities are rethinking their parking. The city is one of the toughest places to find a meter spot in all of America, and there have been a spate of attacks by angry drivers, against parking enforcement officers. One block near the popular Fisherman’s Wharf has average stays of four hours — even though there’s a two-hour time limit — and some spots are filled for days at a time.

Recently, the city hired a company to lay hundreds of 4-inch-by-4-inch sensors along the streets in some areas. The sensors, which resemble reflectors, have recorded some 250,000 "parking events" across 200 parking spots. City planners can now tell you which spots are occupied the longest and how traffic flow affects parking supplies.

If the sensors get a wider rollout, the city has floated a number of ideas. When there’s a Giants baseball game at AT&T Park, the city could temporarily charge about the same as private lots near the stadium. The ground sensors are also connected to the Internet wirelessly, which creates the possibility that parking enforcement officers equipped with PDAs could get real-time information on parking violations beamed to them. It also means consumers could get information on which parking spots are open.

 

For the full story, see: 

CONOR DOUGHERTY.  "The Parking Fix; Free-market economists are overhauling a frustration of American life — and erasing what may be one of the last great urban bargains."   The Wall Street Journal  (Sat., February 3, 2007):  P1 & P5.

(Note:  ellipses added.) 

 

 ParkingSensorsSanFancisco.jpg ParkingMeterInternet.jpg  Sensors such as the one embedded in the San Francisco street on the left, could eventually be used to help track parking violators, as imagined in the fictional picture on the right.  Source of photos:  online version of the WSJ article cited above.

 

In Praise of Microsoft

   A PC screen displaying one of the wallpaper options from Microsoft’s Vista operating system.  Source of photo:  online version of the NYT article cited below.

 

I know what Microsoft wants. I know because I have been exploring its new operating system, Vista, which was released last week after five years of false starts, persistent bugs and great expectations. I also know because after spending three weeks building a computer from scratch to test out Vista, piecing the PC together from parts bought online, I want the same thing. What we want is to eliminate the PC altogether, to dismantle that box of green circuit boards and crammed-in wires, to break through even the most glorious flat-screen monitor and open up a new … vista.

That’s why the operating system has its name, of course, and why the screen images it includes show exotic landscapes with skies lit by sunset or sunrise or aurora borealis displays.

. . .

Apple had it easy: it kept its PC box closed, maintaining control over the hardware so it would perfectly suit its software. But Microsoft faced hundreds of thousands of boards, drives and chips like those I had spread out before me a few weeks ago, all of differing technological vintages, made by hundreds of companies with wildly different goals. Microsoft has taken these objects, along with the many thousands of PC programs now sold, and tried to create a system that would overlook their dizzying differences, bind them to a coherent vision and force them, in all their variety, to leave techne behind for the uncharted possibilities of magic. 

 

For the full commentary, see: 

EDWARD ROTHSTEIN.  "CONNECTIONS; Techie’s Cyber Odyssey: Magic in Bits and Bolts."  The New York Times  (Weds., February 7, 2007):  B1 & B7.  

(Note:  ellipsis added.)

 

    In the Vista operating system, the user can shuffle through open windows almost like a deck of cards.  Source of image:  online version of the NYT article cited above.

 

Level 3 Hangs On

   The fiber optic network of Level 3, originally founded in Omaha, Nebraska.  Source of map:  online version of the WSJ article cited below.

 

Ex ante, Level 3 seemed to have a plausible business model.  When they laid fiber optics, they left room to install more, when demand, or a change in technology, made that profitable.  But demand did not rise as expected; and technologists elsewhere found clever ways to cram more bandwidth into existing fiber optics.  So, alas for many in Omaha, ex post, the results are in the graph below.

 

Fiber-optic network operator Level 3 Communications Inc., a high-flyer during the telecommunications bubble, almost went bankrupt after the sector burst in 2000.

Now, it is back, with a stock price that has almost doubled in the past year and bond prices that have risen about 20%.

Behind the gains: Explosive growth in video viewing over the Internet, which requires high-speed networks of the sort Level 3 offers. At the same time, a hearty appetite by investors for risky debt has enabled the company to put itself on firmer footing by refinancing its debt at lower rates. There also are good reasons to believe that Level 3 might be an acquisition candidate, though many feel such speculation is overblown.

But there are reasons to be wary: The company remains saddled with debt, it is in a business that still has excess capacity, and it has reported a quarterly profit just once in its more than 20-year history. With the stock and bonds at lofty levels, it could be that any future possible good news already is priced in.

 

For the full story, see: 

LI YUAN and GREGORY ZUCKERMAN.  "HEARD ON THE STREET; Level 3 Regains Luster Amid Web-Video Boom."  The Wall Street Journal   (Thurs., December 21, 2006):  C1 & C4.

(Note:  the above version is the online version, and differs some from the print version, though not in substance, as far as I noticed.) 

 

 Level3StockPrices.gif   Level 3 stock prices.  Source of graphic:   online version of the WSJ article cited below.

 

“The Blogger as DJ”

 

(p. 220)  Increasingly, the winning strategy is to separate content into its component parts ("microchunks"), so that people can consume it the way they want, as well as remix it with other content to create something new.  Newspapers are microchunked into individual articles, which are in turn linked to by more specialist sites that create a different, often more focused, product out of the content form multiple sources—the blogger as DJ, remixing the news, to create something new.

 

Source: 

Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

 

Intellectual Property Rights in Toilet

 

CHICAGO (AP) — The gun­man who fatally shot three peo­ple in a law firm’s high-rise office before he was killed by police felt cheated over an invention, au­thorities said Saturday.

  Joe Jackson forced a security guard at gunpoint to take him up to the 38th floor offices of Wood, Phillips, Katz, Clark & Mortimer, which specialized in intellectual property and patents.  He carried the revolver, a knife and a ham­mer in a large manila envelope and chained the office doors be­hind him, police said.

  Jackson, 59, told witnesses be­fore he was shot that he had been cheated over a toilet he had in­vented for use in trucks, Police Superintendent Phil Cline said.

 

For the full story, see:

"Shooter felt cheated over toilet, police say."  Omaha World-Herald  (Sun., 12/10/2006):   4A.

 

Feynman: Nothing in Biology Requires Us to Die

   Source of book image: http://stochastix.wordpress.com/files/2006/08/the-pleasure-of-finding-things-out.gif

 

(p. 100)  It is one of the most remarkable things that in all of the biological sciences there is no clue as to the necessity of death.  If you say we want to make perpetual motion, we have discovered enough laws as we studied physics to see that it is either absolutely impossible or else the laws are wrong.  But there is nothing in biology yet found that indicates the inevitability of death.  This suggests to me that it is not at all inevitable, and that it is only a matter of time before the biologists discover what it is that is causing us the trouble and that that terrible universal disease or temporariness of the human’s body will be cured.   

 

Source: 

Feynman, Richard P.  The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman.  New York:  Perseus Books, 1999.

 

Cheap, Easy, Transparent Property Rights Institutions Are Key to Developing Long Tail

Chris Anderson points out that the main thing currently holding back the long tail, are legal restrictions in the form of clearing copyrights.  This is somewhat analogous to how the legal restrictions to starting up a small business, end up protecting the larger incumbent companies, a la Hernando de Soto’s The Other Path

Figuring out how to quickly and cheaply process small intellectual property rights claims is the key.  The assumption that this could and would be done was an underpinning of Bill Gates’ prediction of the key importance of content in his The Road Ahead.

If Gates’ vision could be realized, it would provide the consumer much greater variety (and much closer matches between what is sought and what is found); and it would provide many more producers of content, the opportunity to support themselves through their productive activities.  (As opposed to the current situation where most such producers must produce as a part-time, labor-of-love, while they support themselves by their unrelated ‘day job.’)

 

Books mentioned:

Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

Gates, Bill. The Road Ahead. New York: Viking Penguin, 1995.

Soto, Hernando de. The Other Path. New York: Harper and Row, 1989.

 

Microsoft’s VX-6000 LifeCam Really Stinks

  Microsoft’s VX-6000 LifeCam.  Source of image:  http://www.microsoft.com/presspass/images/gallery/hardware/WC6_Angle_Silver_lg.jpg

 

I posted this to Amazon.com, late on Thurs., Nov. 30, 2006:

I have spent a frustrating afternoon and evening trying to install the VX-6000 on a fully updated MS XP pro system. The install took forever, because every couple of minutes the install program couldn’t find a needed file (if they need it, why not put it on the install CD?). So I had to browse my system and point them to where the file was (why couldn’t they design the install program to search for the file instead of making me do it?). Finally I got a successful install, and then I was informed there was an updated version, and I needed to install that. So I went through the whole time-consuming process all over again, including the schtick about searching for the location of several files. Finally it again said I had installed the program successfully. So I rebooted my PC, and clicked on the Microsoft LifeCam icon. After cranking for awhile I get "initialization error". I try rebooting again—same error. So I type in "initialization error" in the search bar of the "help" section, and I get back "no topics found." So they sell me an expensive camera, run me ragged installing it, send me a repeated error message, and provide me no clue on what to do about it. (I guess now that Bill Gates is saving the world through philanthropy, nobody’s left minding the shop?)

 

The final comment is probably a bit too snide or harsh.  Microsoft has always had the deserved reputation of letting some products out the door before they are ready.  E.g., the first couple of versions of Windows paled in comparison to the graphical-user-interface operating system that Apple was offering at the time.  And the CD that accompanied Bill Gates’ The Road Ahead would not work on what was then Microsoft’s premier operating system:  Windows NT.

Maybe these kind of glitches result from a conscious operating strategy that gives employees a lot of freedom to make their own decisions.  The upside can be speedy decisions, and creativity.  The downside can be glitches such as the VX-6000 LifeCam.  Taking the broad, professorial view, maybe overall, the upside justifies the downside.  Tom Peters endorses companies accepting this trade-off rather than adopting layered, rule-bound, slow, bureaucratic decision-making.  (See his:  Re-imagine!)

(But did I mention that the VX-6000 LifeCam really stinks?) 

 

The reference to the Peters book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

 

Gerstner’s Insights on Business

 Source of book image:  http://ec1.images-amazon.com/images/P/0060523794.01._SS500_SCLZZZZZZZ_V1122531345_.jpg

 

Gerstner is known for turning around IBM, when many business experts thought it was headed down the tubes.  His book is useful as a report on what happened at IBM during his time as CEO, and also has some more broadly applicable observations.  I’ll mention a few of these in this and a few other postings in the next couple of weeks. 

It is interesting how many successful and important business leaders and experts have spent some time associated with the McKinsey consulting group, where Gerstner started his career.  One major McKinsey figure, Richard Foster, is a strong advocate and elaborator of Schumpeter’s process of creative destruction. 

I wonder if perhaps some of the success of McKinsey is due to the firm’s embracing and applying Schumpeter’s ideas?

Those who oppose creative destruction emphasize the destructive effect that the process has on some workers.  In fact the effects on labor are seen by many (e.g., Thomas Friedman) who are otherwise sympathetic, to be the major drawback of the process.  As a result some of them (e.g., Thomas Friedman) propose paternalistic ‘safety net’ labor policies.

We usually think of government as the main implementer of such policies, but among firms, IBM’s labor policies were among the most paternalistic.  This is usually viewed as one of the positives about IBM.  But one of Gerstner’s insights is to suggest that some of those in the IBM work force were hurt by IBM’s paternalistic policies:

(p. 186)  . . . I came to feel that the real problem was not that employees felt they were entitled.  They had just become accustomed to immunity from things like recessions, price wars, and technology changes.  And for the most part, they didn’t even realize that this self-contained, insulated system also worked against them.  I was shocked, for instance, to discover the pay disparities—particularly in very important technical and sales professions—of IBM comployess when comapred to the competition and the industry in general.  Our best people weren’t getting what they deserved.

Maybe I should mention that I don’t endorse everything in the book.  For example, Gerstner seems to think that a desire to "win" is crucial to success in business.  But I think the analogy between business and competitive sports is usually taken too far.  Can’t one also succeed in business from a desire to innovate and to improve the world?

 

The reference on the book is: 

Gerstner, Louis V., Jr.  Who Says Elephants Can’t Dance? Leading a Great Enterprise through Dramatic Change.  New York:  HarperCollins, 2002.

(Note:  in the quote, the ellipsis was added, but the italics was in the original.)

 

Closing the Alleged ‘Digital Divide’

 One version of the laptops produced by One Laptop Per Child for roughly $100 a piece.  Source of image:  http://www.laptop.org/OLPC_files/nigeria.jpg

 

Simply giving each child a laptop, won’t much improve their standard of living.  (See Easterly’s The Elusive Quest for Growth.)  But maybe a few of the children will obtain access to information about what is possible in the outside world, and maybe that will lead them to fight for more freedom?

But at least, if they remain poor, it will not be possible to lay the blame on some sort of ‘digital divide.’  Lay the blame, instead on government economic planning. 

Note the aside buried in the article:  ‘competitive advantage’ economist Michael Porter is telling the Libyans how to develop a "national economic plan"??  (Say it ain’t so, Michael!)

 

SAN FRANCISCO, Oct. 10 — The government of Libya reached an agreement on Tuesday with One Laptop Per Child, a nonprofit United States group developing an inexpensive, educational laptop computer, with the goal of supplying machines to all 1.2 million Libyan schoolchildren by June 2008.

The project, which is intended to supply computers broadly to children in developing nations, was conceived in 2005 by a computer researcher at the Massachusetts Institute of Technology, Nicholas Negroponte.  His goal is to design a wireless-connected laptop that will cost about $100 after the machines go into mass production next year.

. . .

At the World Economic Forum in Davos, Switzerland, in January, Bill Gates, Microsoft’s chairman, suggested that the next generation of cellphones might be a better way to reach across the so-called digital divide.

Mr. Negroponte said Microsoft refused to sell its Windows software to the project at a price that would make it possible to include in his system.  As a result, his laptops will come with the freely available Linux operating system, which is becoming increasingly popular in the developing world.

The idea of a laptop for every schoolchild grew out of Mr. Negroponte’s experience in giving children Internet-connected laptops in rural Cambodia.  He said the first English word out of the mouths of the Cambodian students was “Google.”

Discussions between the One Laptop project and the Libyan government began as part of work being done by the Monitor Group, an international consulting firm co-founded by the economist Michael E. Porter.  It is now helping the Libyans develop a national economic plan.

. . .  

The first test models will be distributed to the five participating countries companies at the end of this November, according to Mr. Negroponte, and mass production is planned for June or July of 2007.

The computers come with a wireless connection, a built-in video camera, an eight-hour battery and a hand crank for recharging batteries.  They will initially be priced below $150, and the price is expected to decline when they are manufactured in large numbers.

 

For the full story, see:

JOHN MARKOFF.  "U.S. Group Reaches Deal to Provide Laptops to All Libyan Schoolchildren."  The New York Times  (Weds., October 11, 2006):  A14.

(Note:  ellipses added.)

 

  MIT’s Nicholas Negroponte.  Source of image:  online version of the NYT article cited above.