Protesters in San Francisco who hate private buses for tech employees are right about at least one thing: Google and other companies that pick up and drop off their employees on public streets should pay for the privilege of using public bus stops.
But the protesters are drastically wrong when they demand the companies pay $500 million a year. Instead, the payments should be in the ballpark of $1 million t0 $4 million annually.
Here’s how the protesters’ math works, according to a flyer from today’s protest shared by Instagram user Tigerbeat:
Tech industry private shuttles use over 200 SF MUNI stops approximately 7,100 times each day in total (M-F) without permission or contributing funds to support public infrastructure… If the tech industry was forced to pay for every illegal use of these stops for the past two years, they would owe an estimated $1 billion.
That $1 billion-over-two-years figure is based on a $271 fine for illegal use of a bus stop. But it would be absurd to charge so much for a bus pickup that takes a couple of minutes or less. That price would imply that about 75 feet of curbside space in San Francisco is worth thousands of dollars an hour. The city is expensive, but it’s not that expensive. It’s no surprise the fine provides bad guidance: Fines are supposed to be set far above the price of authorized use, because most unauthorized users don’t get fined.
Instead of the fine, we should look to prices that municipalities charge for authorized use of curbside space. As it happens, New York City has just implemented a permit system for intercity buses that pick up or drop off on the street. Bus operators must pay for permits that cost $30 per year for every scheduled weekly pickup. That’s a price of 58 cents per pickup. Applying the same charge in San Francisco would result in total payments just over $1 million.
Or we can look at the price of on-street metered parking in San Francisco, which is up to $6 per hour during peak periods. If a bus stop is the length of five parking spaces and a Google bus uses such space for two minutes for a pick up or drop off, the implied price per use would be $1. That price would raise about $2 million in annual revenues — not nothing, but also not much.
Maybe street parking in San Francisco is underpriced. Maybe the meters should go up to $12 per hour and the bus stop use fee should accordingly be $2, raising $4 million. In any case, we’re not going to get anywhere close to $500 million.
Buses impose other costs on the government than the value of the curbside space they use to pick up and drop off. San Francisco and the state of California have to build, maintain and police the roads. Bus operators already pay gas taxes and vehicle registration fees that go toward these costs. If these charges are insufficient, they should be raised — not just for the private buses but also for individual drivers.
Of course, the protesters don’t really hate the buses because they’re undercharged for the use of curbside space. They hate the fact that housing is a market good whose price is determined by supply and demand. The best way to address that problem would be to allow the construction of lots more housing units in San Francisco, so that housing supply can rise to meet demand. But while we’re doing that, applying a modest charge to the buses for their modest use of curbside space is a good idea too.