Skip to the Content

Commuter Choice Primer

An Employee's Guide to Implementing Effective Commuter Choice Programs

Section 4

Description of Commuter Choices—Mode Choice

DESCRIPTION

Traditionally, the most common choice for any commuter has been mode choice. Mode choice refers to the way in which employees travel. The most prevalent and popular mode, used by four out of five commuters in the United States, is driving alone in one’s own car. Options for providing choices to commuters who drive alone are discussed in later sections. However, by inducing employees to share rides or not use a vehicle at all, the number of cars arriving and parking at the worksite can be reduced. This reduction can alleviate parking shortages, improve access for customers and visitors, and save employers money otherwise spent accommodating cars at the worksite. Additionally, mode choices offer employees options on how they get to work. Not all employees can or want to drive to work every day. Some employees prefer to let someone else drive so they can relax or to save money and wear and tear on their own cars.

OPTIONS

Several mode choice options exist that either offer employees another way to get to work or persuade drive-alone commuters to switch to another mode of travel.

Transit—In areas where bus, train, or ferry service is available and convenient for commuting, some employees choose to ride transit. Many regions of the United States have commuter express services that are designed to bring employees from centralized pick-up points in or near residential areas to major employment centers. Employer strategies to induce transit use include parking cash-out, employee transit benefits, and on-site transit pass sales or distribution.

Carpooling—Carpooling can be as simple as two employees or neighbors who live near one another sharing the ride to work on an informal basis. When two or more commuters share a ride in a car, they are carpooling. Employers can assist in the formation of carpools by matching employees who live near each other into groups that may be able to share a ride. Employer strategies to encourage carpooling include ride-matching, preferential parking, and parking cash-out.

Vanpooling—When the number of commuters sharing a ride exceeds six, a larger vehicle is required, in the form of a vanpool. Most vanpools in the United States have 7–15 riders, with 1 or 2 agreeing to drive the van every day. Employers or employees can own the van or lease the van from a “third party” vendor. Vanpooling tends to work best for commutes of at least 25 miles or more each way. Employer strategies to encourage vanpooling include ride-matching, preferential parking, vanpool benefits, and parking cash-out.

Bicycling and Walking—For a limited number of employees, walking or riding a bike to work is an option. Some employees choose these options for health reasons. Although weather and terrain can affect employees’ desire to try the non-motorized option, employers can support these modes in other ways, as described later. Employer strategies to encourage bicycling and walking include safe and secure storage for bicycles, shower and locker facilities, and parking cash-out.

Parking Management—Although not a mode option, managing the supply and price of parking can provide a tremendous incentive for using alternative modes. This motivation can provide a disincentive to driving alone: not enough parking, higher parking fees, a financial incentive for using other travel modes, preferential parking for carpool and vanpools, or discounts on parking fees are all factors that increase the desire to use an alternative mode.

Financial Incentives—Many employers prefer to use a “carrot” to entice drive alone employees to use an alternative mode rather than the “stick” of constrained parking. The carrot that is often needed to effect these changes is direct financial incentive, or subsidy, for using other mode options. This incentive could be in the form of a discounted or free monthly transit pass or vanpool fare, or daily subsidies for each day that an employee uses an alternative mode. Some employers offer indirect financial incentives, such as additional time off or “points” redeemable for merchandise at area retailers.

CONDITIONS AND BARRIERS

Carpooling, bicycling, and walking options are readily available to any employee and are often adopted without any assistance from the employer. Carpooling tends to be the option selected by more employees than any other. Perhaps this is because sharing a ride is perceived as less of a change in travel habits than riding the bus or a bike to work. Carpooling, bicycling, and walking can be made far more attractive if public facilities are in place to make commuting by these means easier. High Occupancy Vehicle (HOV) lanes on highways, also called carpool or diamond lanes, can offer carpoolers and vanpoolers a time savings over using regular lanes. Bicycle lanes can afford these commuters a safer and well-marked network of bike routes. Even good, well-connected sidewalk systems can make walking from home or the bus stop to work a better experience.

Vanpooling, on the other hand, requires a sufficient group of employees and assistance from the employer to get going. As stated earlier, vanpooling most often appeals to commuters who travel 25 miles each way or more daily. Vanpooling requires a commitment to a regular schedule and can involve extra commuting time to pick up or drop off riders. However, most vanpoolers cherish the time not spent behind the wheel and the ability to work or sleep while commuting.

Transit use not only requires that convenient, frequent services are available but that employees understand how to use the system and that schedules are coordinated to coincide with work hours.

The most significant barrier to switching travel modes seems to be employees’ need for their car before, during, or after work. Employees often drop off children at school, run errands, or make business trips during the workday. In some cases, this need is probably best described as the sense of freedom and flexibility that comes with knowing your car is available when and where you want it. Supporting services, such as Guaranteed Ride Home, can help address this need.

EMPLOYER STRATEGIES AND SUPPORTING SERVICES

Employers can greatly influence employees’ mode choice through a variety of supporting services aimed at making the options easier or cheaper to use:

Commuter Choice Tax Benefits—The Internal Revenue Code allows employers to offer their employees tax free commute benefits under the Commuter Choice tax benefits provisions. These programs are financial incentives to employees, usually encouraging them to switch from driving alone to transit or vanpool.

There are several ways that employers can provide this employee benefit, including an employer-paid program, pre-tax benefit, or a combination of the two. In an employer-paid program, the employer purchases a transit pass or voucher using company funds and provides it to the employee. The employer deducts the cost of the benefit from its corporate income taxes, and the benefit is free of all income and payroll taxes to the employee.

The benefit can also be provided on a “pre-tax” basis. For a pre-tax benefit, the employees’ share of the cost of the transit pass is deducted, before taxes, from their pay. Employees can deduct up to $100 per month this way. The employer can contribute its share of the cost via the provision of vouchers that the employee can exchange for transit media or vanpool services. The employer deducts its share of the cost from its income taxes. The employees’ taxable income is reduced, which reduces the payroll taxes that the employer pays, as well as reducing the income taxes that the employee pays.

It is important to note that the total tax-free transit or vanpool benefit cannot exceed $100 per month. For example, employees could elect a pretax deduction of $75 from their gross pay and the employer could contribute a company-paid pass worth $25. The total would equal the maximum tax-free limit of $100. The employee could not deduct $100 pretax and the employer contribute a pass to the employee without the pass being subject to payroll and income taxes.

Parking Cash-Out—Parking cash-out refers to a commuter benefit that offers employees the option to accept taxable cash income, up to $185 per month, instead of a free or subsidized parking space at work. This benefit gives the employee the choice of how to use the money, for parking or for a tax-free transit or vanpool voucher/ pass, or accept the balance of the cash-out in taxable cash. Free or subsidized parking makes it easier for employees to drive alone instead of considering the other options. If employees are given the cash instead of the parking, they may think twice about how to use that money.

Rideshare Matching—It will be necessary to have a way of locating and matching potential carpoolers. There are several ways of matching carpoolers or vanpoolers:

  • Create a “ride-match” bulletin board at the worksite where employees can post riders- or rides-wanted cards.
  • Match potential riders using their home ZIP codes. Some companies use their personnel file records to create ZIP code listings. Very large companies sometimes create or purchase special software that matches employees by home locations and work hours. Groups of employees can get together in “meet your match” events.
  • Register with a regional rideshare agency that provides this service for employers. These services are usually free.

On-Site Information Center—Although many employees will get information via newsletters, websites, and word-of-mouth, having an on-site information center can give visibility to the Commuter Choice program. This can be as simple as a bulletin board and information rack in or near the coordinator’s office. Here, transit schedules and routes, vanpool routes, upcoming events, and incentive programs can be publicized.

Guaranteed Ride Home—Provide emergency transportation for Commuter Choice program participants in case they have an emergency and cannot wait for their bus, train, vanpool, or carpool to take them. This service will help to overcome one of the greatest concerns employees have about leaving their car at home. Experience has shown that these emergencies do not occur very often. Emergency transportation can be provided through the use of employer vehicles, rental cars, or taxis.

Preferential Parking—Parking preferences include strategies such as free parking passes and access to preferred parking locations. Preferential parking location is a convenience incentive that reserves the most desirable parking spaces for carpools. The more convenient the location, the greater the incentive. Plus, it may save employees time walking across a large parking lot. Preferred location can be proximity to the entrance or exit or a safe covered area of the parking lot.

On-Site Facilities—On-site facilities include physical improvements made to accommodate alternative mode users. These facilities include showers and lockers for those who walk or ride their bicycles to work, secure and safe bicycle storage on-site, transit stop improvements adjacent to the worksite, sidewalks from transit stops to entrances, and parking structures or covered parking that can accommodate vanpools. Other on-site amenities, such as cafeterias, are discussed in the Location Choice section.

Promotion—Employees need to know about the options and incentives offered. In addition to an on-site information center, the program can be promoted via articles in the organization’s employee newsletter, a page on a company benefits website, posters, and flyers. Additionally, events can be held periodically to recognize employees who are using alternative commute options and to educate other employees. An annual Commuter Choice fair or quarterly prize drawing can be effective.

Shuttles—If the transit stop or station is not within walking distance of the worksite, providing reliable shuttle service will make transit more convenient and will get employees to and from work on time. Shuttles can also be provided between buildings or to midday lunch sites.

SYNERGIES WITH OTHER CHOICES

When carefully planned, mode options can work hand-in-hand with other options. If not, changes in work schedule (time choice) and work location (telecommute) can actually work to break up existing carpools and prompt people to drive alone more often. The key is to work with employees who are starting a compressed work week or telecommute option to support the use of alternative modes on days when they report to the worksite.

Having on-site services (such as a cafeteria or convenience services) can also alleviate some of the need for having a car available during the day to run errands or go to lunch. Locating the office near these services or in mixed office/retail developments can also address this issue.

KNOWN EFFECTIVENESS AND COST EFFECTIVENESS

Several national studies have shown that employer support of alternative modes can result in a significant shift from drive alone to other modes. Many employer programs have reduced the number of cars coming to the worksite by up to 20% or even more in some cases.3 However, the key to these successful programs seems to be:

  • Offering incentives for using alternative modes
  • Managing parking supply or price
  • Targeting support and incentives to the options that make sense for the worksite

Providing information on the options, without supporting services and incentives, has not proved to be enough to cause employees to switch modes.

Studies have also shown that it costs employers about $1–2 per day to get an employee to switch modes.4 Some employers use the parking charges of solo drivers to subsidize other modes, and some view these incentives as part of an overall benefits package.

There are several tools to help estimate the potential cost and benefits for a specific worksite. EPA’s website www.commuterchoice.gov provides a calculator that allows employers to estimate financial savings (e.g., taxes, parking facilities, employee turnover) and the estimated traffic and air pollution that can be eliminated by implementing Commuter Choice strategies.

EXAMPLES—MODE CHOICE

Numerous examples exist that describe employer programs that include mode choices. Many employers subsidize transit fares and promote carpooling. Below are examples of employer programs that include a comprehensive set of choices and a track record of success.

Georgia Power/The Southern Company (Atlanta, GA)

Georgia Power offers a variety of modes and other options to help employees get to its downtown Atlanta headquarters location. The Smart Ride program includes transit and vanpool subsidies and carpool incentives. Established in 1997, the program now has 500 employees riding in 50 vanpools and 300 employees using transit. The company runs shuttles to the nearest transit station. Participants in the Smart Ride program can also check out electric cars for midday business needs and are registered for the regional Guaranteed Ride Home (GHR) program. Georgia Power also offers compressed work weeks, telework, and work at company locations closer to employees’ homes.5

The Calvert Group (Bethesda, MD—Washington, DC, area)

This company manages mutual fund investments from its location in a “suburban” downtown location on the Metro rail system. The Calvert Group started its program as an employee benefit and recruitment tool. Employees who use transit (bus, subway, and commuter rail) are subsidized for 100% of the cost of their pass. Employees who walk to work are reimbursed for a new pair of walking shoes each year (up to $140). Bicycle commuters receive $350 toward the purchase of a bike. Employees who drive alone receive a partial subsidy for parking. As such, carpools can lease a single space and share in the costs. More than 25% of Calvert employees use a mode option other than driving alone. Current employees have cited the subsidies as an important part of their benefits package. The company benefits as well through enhanced recruitment to a larger pool of prospective employees and reduced turnover.6

Genencor International (Palo Alto, CA)

This biotech firm in the San Francisco Bay Area has one of the lowest turnover rates in the industry (8.5% vs. 22%). This was partially accomplished with an aggressive commuter benefits program. Genencor provides Eco Passes (for unlimited use on Bay Area transit) and Commuter Checks (for vanpool fares). By doing so, one out of every three employees commutes via public transportation. During the day, employees can use a CarLink program, which makes cars available for medical appointments. Employees can also use company bicycles for local trips during the day. Those who commute by bicycle are provided with on-site bicycle lockers and racks. Overall, Genencor has successfully raised awareness and commitment among its employees via these benefits, yearly on-site transportation fairs, and available transit maps and schedules.7

Lufthansa AG (Hamburg, Germany)

In what has been called the “most comprehensive company transportation program in Germany,” Lufthansa has offered Commuter Choices to 8,500 employees in northern Germany. Lufthansa offers mobility counseling to employees and, in so doing, has eliminated about 950 cars every day. The first component of this program is a company car-sharing program allowing flight crews to check out cars for commuting to and from the site. This eliminates a large number of employees’ cars from being parked on-site for days at a time. Throughout Germany, 15,000 Lufthansa employees participate in the car-sharing program. Employees are also provided subsidized transit tickets. This service has almost tripled the number of employees using public transit (350 to 950 workers). Bicycle commuters and carpoolers are offered secure, close-in parking in the hanger area (700 commute by bicycle and 500 by carpool). Lufthansa promotes its program to make it highly visible within (and outside) the company. Lufthansa has also developed mobility counseling software that allows employees to tailor Commuter Choices to their particular needs.8

Merck (Rahway, NJ)

In response to a statewide mandate for Employee Commute Options programs by major employers, this pharmaceutical firm developed a comprehensive Commuter Choice program for its New Jersey research and development and manufacturing site. Merck encourages carpooling through preferential parking, ride-matching, and special promotions, such as monthly raffles for gift certificates. Merck provides a 50% subsidy to transit users and vanpoolers. It also operates a shuttle to a nearby commuter rail station and sells transit passes on-site. Employees who bicycle or walk can use showers and lockers provided on-site and receive a $1 per day gift certificate that can be used for on-site services, such as dry cleaning, cafeteria, day care/dependent care, etc. This service has resulted in dramatic increases in alternative mode use—90% more carpoolers, 50% more vanpoolers, and a doubling of transit riders. Merck has noticed an increase in employee morale, and the program helps ease a parking shortage during the construction of a new building.9

TOP 11 TIPS—MODE CHOICE

  1. Carrots Before Sticks—Employees will respond better to incentives, such as discounted or free transit passes or vanpool subsidies to make the fare lower, than they will disincentives, such as parking charges.
  2. Part-Time Helps Too—Employees who cannot use an alternative mode everyday can still participate 1 or 2 days per week when their personal situation allows. This practice still benefits the program because some employees will rideshare every day of the week.
  3. Personalize Service—One-on-one assistance is always preferred if resources allow. Understanding an employee’s personal situation can lead to the most appropriate options. For example, new vanpool groups take some time to organize, and personal attention to members of the group can be key to getting the vanpool on the road.
  4. Ask Employees—Do not assume that you know what employees want or need. Talk to employees about what they think of various options. Organize a focus group to discuss what it would take to change their commuting habits. Survey employees. Ask for suggestions.
  5. Many Will Not Want to Participate—Many employees simply cannot or will not try a different mode to get to work due to their personal situation or their insistence on using their cars. Do not get discouraged. Work with the segment of employees who might be willing to switch because they live a long distance from work, have used an alternative before, or are tired of fighting traffic.
  6. Get Groups Together to “Meet Your Match”—Sometimes, getting groups of employees together for a brown bag lunch or coffee event can break down the impersonal barriers of sharing a ride with a stranger.
  7. Carpooling Is the Most Viable Option—Carpooling is the easiest option for most employees to use. It simply requires two or three people agreeing to share a ride. Other options require more rigorous schedules or commitments.
  8. Include During New Employee Orientation—Most people form their commuting habits within the first week of starting a new job. Assisting these new employees with personalized options can increase the chance that they will try something other than driving alone.
  9. Show Management Is Supportive—Clear support from top management that Commuter Choice is important to the organization sends a strong message to all employees—this is especially true when senior-level managers use an alternative themselves.
  10. Build into Company Culture—Employees who use alternative modes do not want to be perceived as different in any negative sense. Having to leave a meeting to catch a bus or vanpool should not be frowned upon. Clear policies on core hours for meetings is one example. Company policies and the general culture should embrace travel options.
  11. Do Not Skimp—When installing bicycle storage or showers and lockers, provide quality, safe, clean, and appropriately sized facilities to reward employees for responsible commuting without their cars.
  12. To determine if any of these Mode Choice strategies would work for your worksite, go to the CCDSS and complete the Interactive Guidance Tool.

U.S. Department of Transportation Federal Transit Administration logoU.S. Department of Transportation Federal Highway Administration logoU.S. Environmental Protection Agency logo