The High Cost of Free Parking

If you’ve never passed by upstate New York, you should – it’s literally a living museum of late 19th century America. It’s a mix of old towns left for dead by career climbers fleeing to NYC or snowbirds moving to southeastern US suburbs who left behind beautiful architecture and dwindling small communities. Mayors of these old towns are trying to revive the small businesses in their city centers and need to build consumer traffic to do that. Free downtown parking is something most mayors don’t blink at – drive traffic without incurring any additional cost.

Enter the Tragedy of the Commons

Of course, there’s no such thing as free (even if you’re talking about GPL). As soon as they turned off the meters, the towns began to accumulate a collection of antique cars. Not the kind of cars you’d find at an antique show, but another kind of artifact altogether. Try visualizing streetfuls of “vintage” automobiles which look like this:

Eventually the city had to incur the cost of pulling these heaps off the road, which were making the city sidewalks unattractive to would be customers they tried to draw in. The additional tax revenues vaporized, leaving the city in the red on the whole move. It’s a typical tragedy of the commons story, but it doesn’t end there.

Opportunity (Cost) Knocks

To accommodate the sudden increase in demand for downtown parking, some cities predictably responded by opening up parking lots. Many of them displaced farmers markets from city owned lots to spaces further outside the city, dropping the return on investment of the land now used as car storage. The city could instead have leased that land to a local business, those revenues representing the opportunity cost of that land.

The High Cost of Free Parking

Most of us have learned about the tragedy of the commons, and anyone who’s done a stint of high school economics has heard of opportunity cost. The two come in tandem almost by definition, and I call the combined effect “the high cost of free parking”.

This phenomenon works the same with enterprise software. I’ve spoken to a number of I.T. shops who figure a low cost or “free” consumer wiki works just fine for their needs. In practice, CIOs I’ve spoken to who have sanctioned “free” or “low cost” wikis have found them multiplying like rabbits. Once that happens, I.T has three possible choices: support the morass of wikis, ignore user appeals for support, or convince them to standardize on something I.T. establishes. All three in some way combine the tragedy of the commons (the commons being I.T. time and resources) with opportunity cost (the amount of time spent on departmental tech projects instead of core competencies).

The end result is far from ideal, despite all of the resources spent. What’s strange is the very tools designed to foster collaboration become handcuffs when departments contain collaboration to their own departments. When there’s no strategic drive behind collaboration software, you end up with knowledge fiefdoms contained within departments, but which do not cross-pollinate. The cost of these knowledge fiefdoms of course is “free”, as in the high cost of parking.

How high is the cost of free parking in your organization?

This entry was published on February 12, 2008 at 2:43 PM. It’s filed under Uncategorized and tagged , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post.

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