Why Elon Musk’s Decision to Impose a ‘Parking Fine’ is a Terrible Idea

A fortnight ago, Elon Musk promised to address a major problem faced by many Tesla owners. Long lines at Supercharger stations — Tesla’s free and publicly accessible fast rechargers.

@loic You're right, this is becoming an issue. Supercharger spots are meant for charging, not parking. Will take action.

— Elon Musk (@elonmusk) December 11, 2016

The issue has been a major source of frustration for many owners of Tesla’s electric vehicles as the supercharging stations were increasingly being misused as parking spots thus denying other vehicles which needed to charge up.

Sure enough, 6 days later, Musk implemented a solution he thinks will bring an end to the problem and “increase Supercharger availability”.

It wouldn’t. But, more on that in a bit.

Musk’s Solution
A $0.40 per minute ‘idle’ fee (or $24 per hour). The fine starts as soon as the charging session is complete and the owner is simultaneously notified via the Tesla mobile app. However, should the owner move the vehicle within a 5 minute grace period, the charges are waived off.

Musk also went on to clarify that this idle fee would apply only if majority of the Supercharger bays at a location are occupied. In the event, the Supercharging station were to be largely empty, the owner would not be fined at all and is free to use it as a parking spot.

@TeslaMotors We are going to modify this so that people only pay a fee if most bays are occupied. If the site is basically deserted, no problem to park.

— Elon Musk (@elonmusk) December 17, 2016

Why imposing a “Parking Fine” is a Bad Idea
The construct of this scheme is such that this new parking fine will not have the desired effect in certain scenarios. In fact, it will achieve the opposite of what was intended in those settings.

Musk’s solution will invariably increase misuse instead of motivating the erring Tesla owners to make the ethical decision of moving their vehicles once their cars have juiced up. Also, the resulting negative consequences would be almost impossible to reverse due to what is known as the Cobra Effect.

The Cobra Effect is a type of perverse incentive. It is a phenomenon that occurs when an attempted solution to a problem actually makes the problem worse (I’ve written in detail about how the Cobra Effect has irreversibly affected the e-commerce space in India and cited more examples here).

Consider the scenarios mentioned here, where Tesla owners go shopping while their cars got charged. These could further evolve into situations wherein owners seek parking spaces in order to run errands or grab a bite. In the case of the latter, if there is a Supercharger station in the vicinity, it becomes an attractive option. This is especially true in places such as Hong Kong, (which is one of the busiest Supercharging locations worldwide) where owners leave their Tesla for charging during lunchtime — only to create a pile-up of more Teslas that might be waiting in actual need of charging.

And this is precisely why parking fines have been introduced to discourage such behaviour as per Musk.

A question of economics?
However, Tesla owners will think of the penalty imposed as a price rather than a fine. They would turn what was originally an ethical issue into a simple question of economics at locations and situations that demand it.

Is $24 for an extended hour of parking better than a parking ticket that usually ranges north of $50 in metros such as NY, Boston or HK? Also parking at an illegal spot could run the risk of their car being towed away (not to mention the charges at the impound).

Another way people will look at this would be,

Does a $24 fee for a possible 125 mins of parking time justified for an important business lunch with your client?

It sure is! Most Tesla owners shell upwards of $75,000 to purchase Tesla’s electric vehicles, and $24 must be chump change for them.

Legitimising a wrong
The more important point being, the offending owners are now given ‘permission’ to use the Supercharging bays as parking spots for a price. Thus, by introducing the parking fine, Musk has essentially compounded the parking menace problem and turned it into a (permitted) service.

Continuing with the parking fine is extremely ill-advised as once the owners lose their guilt (of using Supercharger bays as parking spaces), repelling the idle fee would be useless as the owners have already been wired to think that it’s okay to do it.

With over 150,000 Tesla cars sold and close to 4,900 Superchargers worldwide, it works out to 1 supercharger for every 31 Teslas on road. A reasonable number. However, once the Model S rolls out, this ratio is only going to get worse further aggravating the problem.

The Plea
It’s clear that Musk heeds to feedback as evident from the introduction of the ‘idle fee’ in response to a tweet.

So, if you are reading this Elon, I’ve already tweeted out to you urging you to reconsider the decision before it’s too late.

@elonmusk Introducing the "idle fee" is not recommended. It'll only increase misuse (parking) - a classic case of #CobraEffect @TeslaMotors

— Praveen Rajaretnam (@Prajaret) December 22, 2016