Dynamic pricing for reservation-based parking system: A revenue management method

With the improvement of urban smart level, parking reservation has become not only one of the most effective ways to solve parking problems but also an efficient tool to reduce traffic congestion in eliminating the cruising. This paper proposes a new dynamic pricing model for parking reservation, aiming to maximize the expected revenue of the parking manager. The parking requests arrive as a Poisson process, and the arrival intensity is influenced by the time-varying parking price. The optimal pricing scheme is proved to be unique for any general demand and derived in closed form for some particular types of demand functions, like exponential and linear. Numerical examples show that the dynamic pricing scheme can provide significant improvement in revenue and make full use of the parking resources during peak periods.