Should autonomous vehicles be subsidized to reduce parking fees? A productivity perspective

Governments often advocate for and implement policies to promote the development of new technologies, such as electric vehicles. Are these policies promoting new mobility modes applicable to autonomous vehicles (AVs)? In this study, we develop an economic model to capture residents' behaviors, including mode choice, location choice, and parking choice. Two parking choices (parking downtown or at home) for AV users are considered. We construct utility maximization models under a user equilibrium state to capture government planning and residents' choices. By deriving the first-order conditions of the model, we analyze the influence of AVs on urban characteristics. We emphasize how the parking subsidy affects AV users’ behavior, thereby influencing urban productivity. The results indicate that parking subsidies for AVs undermine urban productivity, whereas cash-out policies, such as providing subsidies for public transit, can effectively enhance urban productivity.