Why Bundling Parking Costs… Well, a Bundle


When you subscribe to a cable TV service, it doesn’t matter whether you’re a fan of Sean Hannity or Rachel Maddow, you’ll get a package that includes access to FOX News, MSNBC and CNN, not to mention a host of other channels that you may or may not ever watch. Even if you find Hannity (or Maddow) so vile and reprehensible that you would rather gouge your own eyeballs out rather than watch him (or her), you can’t buy a cable TV package without getting FOX and MSNBC as part of the deal. That’s called “bundling.”

Bundling is a practice in many industries. When you purchase a PC, for instance, it typically becomes bundled with a keyboard and a mouse. The economics vary from industry to industry. The practice is usually the result of private business considerations…. but not always.

An instance of  bundling mandated by government regulation is parking. Jim Dalrymple, a Utah writer, offers a great example in his About Town blog.

A few nights ago I saw The World’s End at the theater in Salt Lake City’s Gateway mall. Because that theater is only a block away from my house, I walked there.

As I was buying the tickets, however, I was asked if I needed parking validation. I said no, but the clerk was apparently unaccustomed to my response because he gave me a validation ticket anyway.

And that’s when it hit me: I was paying for parking whether I was using it or not. And that’s a terrible arrangement.

Parking at the Gateway costs $3 for three hours — about the time you’d need to walk from the parking lot, buy a movie ticket, watch the previews and the movie, and get back to your car. A validation ticket makes that parking seem free, but of course it is not; the costs of building, maintaining and securing parking lots are incredibly high and are always passed on to building owners, tenants and, finally via prices, customers.

In other words, we pay more for goods and services that come with “free” parking because the costs of that parking are rolled into the prices of whatever we’re buying. This is true of all parking, of course, but the validation transaction emphasizes that parking was never free to begin with, it’s merely an obligatory add-on when buying something else.

So in my case, the movie ticket was more expensive because it came with $3 worth of parking. It’s like I was forced to buy a concession that I didn’t want.

Bundling parking, Dalrymple argues, encourages driving. “By way of analogy, if you were forced to buy a bucket of popcorn, you’d probably end up eating it, whether you originally wanted it or not. Or, to return to the cable bundling analogy, you probably watch more, say, VH1 Classics than you’d otherwise be willing to pay for a la carte because it’s there, you paid for it, so whatever, you watch it.”

De-bundling parking from the movies would provide consumers greater choice. But businesses often have no incentive to de-bundle because governments require them to offer a minimum number of parking spaces, depending upon the type of establishment. If businesses are forced to maintain the parking, they might as well bundle it. What the hell! But they pass on the higher cost to customers in the form of higher-priced movie tickets… or, in the case of residential real estate, higher rents or housing prices. People who own cars end up paying for space they don’t use, thus subsidizing the people who do drive.

Dalrymple drives home the point in a follow-up post:

Imagine, for example, that residential neighborhoods had communal parking lots where you could pay a month fee to store your car. If you choose to not have a car, you avoid the parking costs altogether. Or, if you choose to have four cars, you pay to store them for however long you need them. In either case, when your needs change, so do your parking costs.

Paying for parking by the month wouldn’t be fun, of course, but if homes were $20,000 cheaper it might suddenly seem like a pretty awesome deal.

The culprit, he writes, isn’t the market. “It’s laws and ordinances that distort the market.”


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10 responses to “Why Bundling Parking Costs… Well, a Bundle”

  1. Peter Galuszka Avatar
    Peter Galuszka

    Interesting points.
    It affects the poor in inner cities because to start small businesses and get internet, they have often had to buy the “bundle” of services they don’t want, such as HBO, whatever. The carrier (Comcast, Verizon, whatever) makes it very difficult to de-bundle. The only answer would be REGULATION to protect consumer rights but Lordy NO we don’t regulation.

    So, Jimbo, what’s YOUR answer? Regulation capitalism up the wha-zoo none stop.

    So we’re stuck with the profit-takers having everyone dance to their tunes.

  2. Peter, the FCC’s regulations require the bundling of cable channels to some degree. The industry, including some niche programmers, argues that, without bundling, many niche networks would not likely be carried because they would be so expensive on an ala carte basis. For years, minority programmers have made this argument. I cannot imagine Univision or BET having this problem given our demographics in this country. But programming for smaller ethnic groups might have a problem getting carriage.

    Personally, I’d favor a lot less bundling and allowing subscribers to pick more ala carte programs. Newer and niche networks would have to provide very attractive pricing and programming to get selected by consumers. But what’s so wrong with that?

    Also, in many areas of the country, minority/racial/ethnic groups often subscribe to more video programming services than do Caucasians. It’s always been an argument in favor of building out networks broadly throughout metro areas and not redlining lower income or minority neighborhoods.

    1. Thanks, TMT, I didn’t know that. So, in the name of supporting diversity in programming, the FEC winds up making cable TV services more expensive for the poor and minorities!

      Hah, hah, Peter, he got you!

  3. naw… let’s get to some facts here:


    and you can find one for COX also.

    of course the rest of us help pay for it with the universal access fee “bundled” in our phone bills!

    however, rest assured that if the cable companies were required to “de-bundle” , you WOULD pay a BUNDLE for ala carte also!

    AND people may not realize it but you STILL CAN get broadcasts on a conventional antenna!

    we have way too much whining on this issue!

    whine. whine . whine.

    besides people LIKE “bundles”. I bet most folks buy the “value” meal at McD or even sign up for the entree plus two veggies at most restaurants.


  4. reed fawell III Avatar
    reed fawell III

    I suspect that people will also like the bundling of parking places when suddenly they wake up and discover they have no where to park.

  5. Peter Galuszka Avatar
    Peter Galuszka

    Ha ha, yourself Bacon,

    The FCC’s regulation of cable is limited at best. It does require cable firms to make available a bare bones choice, but the companies are able to skip past that and move towards bundling which boosts them as well.

    The reality is that it is easy to call a cable company and ADD services. Just try to SUBTRACT them on the special number they give you and see how long you wait in the phone tree.

    1. A couple years ago, I switched to Verizon from Cox because the former offered more for less. I went to the Cox office in Herndon to turn in my equipment. The Cox employee got a bit surly with me, asking me why I didn’t contact Cox when Verizon made me a better offer. I explained how I thought Cox should have contacted me with better prices rather than hope I wouldn’t catch on.

      In telecom, you need at least three providers for the consumer to have much control.

      1. re: 3 providers – I agree but if all you have is 2 that’s better than one!

        there are usually MORE options for TV – which would include “free” antenna-received broadcasts as well as DISH/Direct TV and you even have “choices” for internet if you include Hughes satellite and cellular internet. Many smartphones now can be used as a portable internet “hot spot” for an extra 10 bucks of so, and as long as all you are doing is email and web surfing.

        more options/choices than a decade ago….for most

  6. Developers within the TOD areas at Tysons are not bundling parking with offices or residences. I am skeptical about the former. I think market pressure will force landowners to offer large tenants a number of included parking spaces. But there is very strong pressure on these landowners to reduce SOV trips to and from Tysons.

    Another interesting development. The Tysons plan requires the expansion of the Dulles Toll Road heading west. Such expansion would require the taking of some land from Wolf Trap National Park. I understand that the Park Service is now raising concerns about this. Several citizens groups raised the issue years ago.

  7. Many apartments/TH down our way allocate one or two parking spots with a separate small temporary location for when you have company, etc.

    I’m not sure how “fair” it is to allow a subdivision a half mile away to have unrestricted parking on it’s front street and off street while essentially penalizing those who are living in denser housing.

    It’s almost like one group of people is denied personal mobility because they chose something other than a subdivision – or even a townhouse or apartment to live in.

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