Using transportation benefits to help ease employees’ commutes

Even star employees shine a little less brightly after battling an hour of traffic on the way to work.

Long commutes “can be very demoralizing” and can affect productivity, says Sandra Reder, president and founder of Vertical Bridge Corporate Consulting Inc. in Vancouver. Plus, a bad commute is one of the most common reasons employees leave an organization, says Jetti Stykow, co-founder of the commuting consultancy Voy in Palo Alto, Calif.

Read: What are the benefits of offering commuting perks to employees?

So while providing transportation benefits may require upfront investments, employers could come out ahead in the long term by reducing re-hiring and retraining costs.

Saving the green

Commuter benefits come in all shapes and sizes. Motivated by its commitment to environmental sustainability, Vancouver City Savings Credit Union offers employees a 25 per cent reimbursement on the cost of transit passes, $500 to purchase a bicycle, up to $1,000 to buy an electric bike, $200 for annual tune-ups and $5,000 to purchase an electric car, says Sean Raible, the organization’s director of total rewards, health and well-being.

While the credit union also pays to offset its carbon footprint and sees an immediate financial impact by encouraging its staff to choose sustainable commuting options, Raible says saving money isn’t the real motivator of the program. “It’s really tied to environmental sustainability as one of Vancity’s three guiding principles, most recently typified by our [United Nations] sustainable development goal commitment to reduce our carbon footprint to 1.5 tonnes of CO2 equivalent per employee. It’s just who we are and what we do — saving money is only a pleasant co-benefit.”

Parking was the key issue for the Massachusetts Institute of Technology. One garage on campus was reaching the end of its structural life and had to be demolished. The university would have had to replace it with underground parking, at a cost between US$50,000 and US$100,000 per space.


The percentage of Vancity employees who commute using sustainable transportation

The percentage of workers in Metro Vancouver who commute using alternative transportation

Source: Vancity, 2019

The increase in MIT staff regularly using transit after the introduction of its commuter benefits program

The decrease in MIT staff purchasing parking permits after the new benefit was introduced

US$1.4 million
MIT’s estimated annual savings due to its commuter benefits program

Source: Adam Rosenfield, 2019

“At the end of the day, it comes down to cost and benefit,” says Adam Rosenfield, a transportation planner based in London, U.K., who studied MIT’s commuter benefits while he was a graduate student at the university. “It was costly to rebuild parking garages and to secure more land, and it makes more sense to spend a fraction of that to get people to take transit, to carpool.”

Read: How WSP Global strives to conquer the commuting conundrum

MIT introduced a multi-pronged commuter benefits program. It moved from annual to daily parking pricing, which was capped at the former annual amount to ensure no one spent more money on parking after the change. It also offered employees free passes for the local transit system, a discounted pass for commuter rail and discounted parking at commuter rail stations.

“The most important aspect of this was the parking pricing,” says Rosenfield. “That approach was really important to getting people thinking about their day-to-day mode choice.”

The concept of salience from behavioural economics was also key — to what degree would people feel the cost? Once MIT employees were paying US$10 for daily parking instead of US$1,760 automatically taken off their paycheques once a year, parking felt a lot more expensive and employees no longer had to pay for days they didn’t park.

At the same time, the free transit pass made the subway commute much less expensive. Two years after the changes were introduced, demand for employee parking decreased by 10 per cent, which was enough to skip building the new parking garage.

“You don’t want to be too overbearing or paternalistic in how you’re persuading people to change their commuting approaches,” says Rosenfield.

Read: Employers have role in mitigating stress of daily commute: survey

Some employees might live in transit deserts simply because they’re the only affordable housing option, he notes, and commuter benefits programs shouldn’t shame them. “You don’t have to change every commuter. You only have to change enough that it gets you past that crunch point.”

Creative commutes

There are many other ways to craft commuter benefits. Reder points to one law firm that allows some employees to begin their work day when they get on a WiFi-equipped commuter train in the morning and end it when they disembark at their home station in the evening. Effectively, these employees telecommute for a quarter of each day.

“The huge downside is that people may abuse it,” she says. “It’s really designed to work where you have mutual trust between employer and employee.”

Reder also points to a new trend whereby employers offer transportation equivalents of health-care spending accounts: a set amount of money employees can spend as they see fit on transit passes, parking, gas or bike tune-ups.

Read: Straight from the cyclists’ mouths: How can employers encourage bike commuting?

This type of benefit is “a really innovative way of reframing costs, of levelling the playing field,” notes Rosenfield. “Often, people who don’t drive to work and who realize their colleagues are getting free parking . . . feel they should be entitled to something in lieu of that.”

Organizations can also consider encouraging and even subsidizing employee carpooling, says Stykow. In addition to relieving the stress of commuting, it can help co-workers build relationships across departments.

However, in addition to geographical proximity, carpoolers’ schedules and transportation preferences would also have to align. For one company with 200 employees, Stykow’s team facilitated 14 carpool matches.

No one commuting benefit will work perfectly for every employee, but as Rosenfield says, “all we’re doing is increasing choice, which is the ideal thing for commuters.

“Transportation benefits help employers attract and retain staff in competitive markets; help encourage lifestyle shifts for employees that improve their health and well-being, ultimately making them happier and more productive; and are a reflection of a workplace’s corporate values, from being a good neighbour — MIT reducing its parking demand 10 per cent takes hundreds of cars off congested streets — to taking a stance towards combating climate change.

“All these issues tie together.”

Sara Tatelman is a freelance writer based in Toronto.