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Transportation Demand Management professionals strive to deliver successful mobility strategies that can save their organization money, reduce commute times, and align with broader corporate sustainability goals. A well-executed commuter benefits program can be one of the most effective tools that TDM professionals have at their disposal when they set out to achieve these goals. Commuter benefits programs are advantageous to both employers and employees and their popularity will only continue to rise in the coming years as more cities and states pass legislation promoting alternative forms of shared, sustainable transportation.
In this article, we will explore:
What are Commuter Benefits Programs?
Commuter benefits programs allow employees to use pre-tax income deductions to cover the monthly cost of qualified commuting options. These programs encourage commuters to choose alternative transportation options to get to work and incentivize the use of public transit, biking, corporate carpooling programs, and vanpooling.
Employers can deliver commuting benefits to employees through reimbursements, flexible spending accounts, or direct subsidies that are not subject to payroll tax. In some cases, employers may also offer corporate transport programs to their employees directly in the form of vanpooling, climate-positive carpooling, demand-responsive shuttles, or fixed-route bus services.
Additional program features can include:
- Access to reserved parking for staff who share rides
- Monthly transit passes
- Cycling skills courses and subsidized bike tune-ups
- Charging employees for single occupancy vehicle (SOV) parking
- Other incentives like gift cards for employees that choose shared methods of transportation
- And much more
How Does a Commuter Benefits Program Benefit My Organization?
When properly implemented, commuter benefits programs offer a range of environmental, financial, and social benefits for organizations and their people:
- The Bay Area Commuter Benefits Program found that by excluding shared mobility costs from their payroll tax, local employers could save 7.65% on every dollar set aside as pre-tax by employees for transit.
- Organizations that provide more flexible, stress-free commutes to their employees, by reducing parking pressure, for example, benefit from happy and more productive workers. Researchers in England recently found that “each extra minute of commuting time reduces job satisfaction, increases strain, and worsens mental health for workers”
- Transportation accounted for 27% of annual greenhouse gas emissions in the US in 2020 according to the Environmental Protection Agency. 57% of transportation emissions were attributed to light-duty vehicles.
A robust commuter benefits program also helps employers recruit and retain top talent in a fiercely competitive labor market. Sustainable transportation practices align with the values of most young professionals and can be a powerful recruiting tool - sustainability was the number one top-ranked issue in the 2020 Deloitte Global Millennial Survey. The financial incentives can also be significant. The Bay Area Commuter Benefits Program estimates that employees can save up to 40% of their annual transit costs when they join the regional program.
Depending on where your business is located, you may be under additional pressure to adhere to mandatory commuter benefits ordinances in your city or state. Mandatory commuter benefits ordinances for employers have already been established as law in New Jersey, New York City, Seattle, Washington D.C., and Berkley, Richmond, and the San Francisco Bay Area in California, and new legislation around commuter benefits is being written every day
In 2022, Philadelphia signed a city-wide Employee Commuter Transit Benefit Ordinance and Colorado passed the Alternative Transportation Options Tax Credit which can provide up to $250,000 in tax relief to employers that promote alternative transportation options to their employees in 2023-24. To help employers in Colorado maximize their tax credit, Liftango and our partners at Commutifi have launched a new product that will help companies in Colorado plan and submit their employees' commute programs to receive up to a 50% return on their TDM program costs.
Liftango and Commutifi’s new platform will help employers:
- Calculate their savings potential
- Meet state requirements
- Build improved TDM programs
- Submit their TDM plan to the state
- Gather all commute documents and finalize their application
Read more about this program here.
How Can My Company Leverage Commuter Benefits Programs to Promote Alternative Transport Options?
The features and strategies of a successful commuter benefits program will be different for every organization depending on its size, location, sustainability targets, and a myriad of other factors. To build an effective transportation strategy that reduces SOV trips and aligns with your organization's sustainability goals, work with a trusted shared mobility provider like Liftango; one who can deliver data-driven clarity around commuter behavior and provide employees with the right transport options based on their needs.
Liftango’s corporate transport solutions will help your organization:
- Access multiple modes of shared transportation - Carpooling, Demand-Responsive Transport, and Fixed-Route shuttles - all from one app
- Manage all your transport and parking services on a single platform, minimize wasted miles driven with empty vehicles and increase the utilization of your fleet
- Capture the data you need to build sustainability reporting and make better commuting decisions
Liftango partners with Fortune 500 companies, universities, and organizations from all over the world to alleviate parking pressure, reduce congestion and combat climate change by empowering more commuters to choose shared mobility options. By partnering with Liftango, your organization can implement intelligent, flexible, and efficient commuter mobility programs designed around the ever-changing needs of your workforce.
