The rising popularity of ride-hail companies like Uber and Lyft in San Francisco is causing fewer drivers to park in Union Square, prompting the Recreation and Park Department to tighten its purse strings, according to city officials.
Katie Petrucione, director of administration and finance with the department, said at a recent Rec and Park Commission hearing that the Union Square Garage has experienced a “significant reduction in revenue” this fiscal year because of transportation changes in the area.
Sources with insight into the area say there is a cocktail of problems leading to the decline in paid parking at the Union Square Garage, ranging from the increased use of companies like Uber and Lyft to Central Subway construction on Stockton Street to the rise of online shopping.
Nonetheless, Rec and Park is projecting a revenue shortfall of $1.3 million next year because of the decline in paid parking, primarily because of declining business at the Union Square Garage, Petrucione said Feb. 13.
As a result, the department will make more “modest” investments in deferred maintenance next fiscal year, Petrucione said. City parks are in such need of repair that San Franciscans passed a budget set-aside for maintenance in the June 2016 election.
Rec and Park depends on revenue from three garages — one beneath Union Square, another under Portsmouth Square in Chinatown and the other at Civic Center — to balance its annual $200 million budget. It also receives 50 percent of the revenue from Saint Mary’s Square.
“Union Square Garage revenue is lower when compared to previous years,” said San Francisco Municipal Transit Agency spokesperson Paul Rose. “More people are choosing alternative transportation options to get to the area, including transit, biking and ride-sharing.”
Rose said part of the problem is that construction on the Central Subway took away 110 parking spots from the Union Square Garage. To compensate Rec and Park for it, the federal government gave Rec and Park $7 million to use in the coming years, according to Petrucione.
Next year, the department will use an additional $250,000 from the reserve of federal funds because of the shortfall, according to Petrucione.
The decline in paid parking might seem like a good thing to transit activists who fight to reduce the number of parking spots in San Francisco. But Tom Radulovich, the executive director of Livable Cities, said the decline doesn’t mean there are fewer drivers on the street.
“It might mean there’s the same amount of cars, there’s just less parking,” Radulovich said.
Late last year, city officials told the San Francisco Examiner that the estimated number of Uber and Lyft drivers in San Francisco had grown to 45,000 from 37,000 in April 2016.
Karin Flood, the executive director of the Union Square Business Improvement District, described traffic in the area as busy and congested because of the Central Subway construction. But Flood said there has been a “slow and steady” decline in the use of parking spots.
“More people are taking public transit, more people are taking Uber or Lyft or taxi[s],” Flood said. “A majority of the folks coming to Union Square are not necessarily driving in their autos.”
Flood also said the area is in flux. While businesses do not generally share their profit numbers, there are anecdotal signs that “retail is shrinking,” she said. But Flood said the biggest hit to parking at the Union Square Garage was clearly the loss of parking spots.
Last November, Macy’s announced plans to sell its Men’s Store in Union Square, reportedly because of the impact of online shopping.
Radulovich said the problems also come down to poor city planning. Now that parking is less desirable, Rec and Park is in a bad position because it can’t replace underground parking with new a development, yet it is depending on the revenue.
“Some of the parking that the city agencies were banking on should’ve never been built in the first place,” Radulovich said. “You’re not going to build condos under a park, even in San Francisco.”