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18% of Employees Signing up For Commuter Benefits Programs Were Solo Drivers

Transitcenter
Although mass transit users are the most likely to participate in a consumer benefits program, 18% of participants in the survey had been solo drivers. Click to enlarge.

Eighteen percent of employees signing up for tax-free commuter benefits switches from driving a car to commuting by mass transit to get to work, according to a study conducted by BusinessWeek Research Services (BWRS) and commissioned by TransitCenter, Inc., a nonprofit organization that develops tax-free transit benefits as a means to promote mass transit use.

Since 1993, employers have been able to offer employees a tax-free benefit for commuting by mass transit and eligible vanpools or to pay for commuter parking primarily at transit or ridesharing locations under IRS tax code section 132(f). Tax-free commuter benefits can be structured as an employee-funded tax-free payroll deduction; as an employer-funded benefit; or the costs can be shared by employer and employee.

The benefit can be delivered in the form of transit provider-specific passes, universally accepted vouchers and terminal–restricted debit cards, or through a reimbursement model under specific conditions defined by the IRS. Current IRS limits allow for participants to set aside up to $115 a month tax-free to pay for transit and vanpool commuting costs, and up to $220 for commuter parking.

The study also found that 53% of employees whose companies don’t currently offer tax-free commuter benefits would participate in a program if it was offered.

Switching from driving to riding mass transit reduces CO2 emissions by 20 pounds per person per day—or more than 4,800 pounds per year—according to the American Public Transportation Association (APTA).

While commuter benefits have often been seen as a ‘nice to have’ for encouraging mass transit, we increasingly see it as a ‘necessary to have’ if we want to see an immediate and long-lasting impact on CO2 levels. If every company offered commuter benefits, the positive impact on CO2 levels would be a major contribution by corporate America in the effort to preserve the environment and in supporting the needs of commuters.

—Larry Filler, president and CEO of TransitCenter

Among the study’s findings:

  • 92% of respondents were concerned about the high cost of fuel; 80% were concerned about the cost of commuting to work.

  • 92% had some degree of concern about the impact of global warming on the environment.

  • About 50% said their commute was getting worse.

  • 47% are looking for subsidized commuter benefits from their companies.

  • 40% report that their employers offer tax-free commuter benefits programs;

  • Among those who reported working at a company offering commuter benefits, 62% say they participate in the program.

  • Mass transit respondents are the most likely to participate in a tax-free commuter benefits program. 72% of participants were already taking mass transit when they decided to enroll in a commuter benefits program; 18% were solo drivers; and 10% used other means.

  • Among employees who signed up for commuter benefits, 41% increased their use of mass transit, and 46% increased their mass transit usage during weekends.

The study covered 1,048 respondents in Chicago, New York and San Francisco in October 2007. These cities were chosen due to their geographically dispersed markets and high concentration of commuters as identified by the US Census’ 2005 American Community Survey. Qualified respondents either resided within the city limits or within an 80-90 mile radius of one of these cities. The survey has a 95% confidence level with a margin of error of +/- 3 percent.

Comments

John

I wish I could do something like this. I want to get more sleep on the way to and from work. Napping while I drive is just not working out for me.

SJC

Companies can offer some employees telecommuting one day per week also. It is usually done on a trial basis and work productivity is measured. It is not for everyone, but self motivated individuals report good results.

If employers and government can work out carpooling benefits, that would help too. I signed up for a carpool commuting program on a government web site for the county and after I filled in all the information it said "thank you for taking our survey". That told me that it was not a database to match potential carpooling commuters, but just a survey. We need to do MUCH better.

Ryan K

I'd prefer to telecommute a day or two each week. However, telecommuting has one problem: my current and previous bosses. They're of the opinion that since they screw around when the work from home, everyone else does too...

SJC

Yes, that has been a major criticism and why it has not become more widespread. The self motivated types actually get higher productivity because they are not interrupted for chit chat or meetings. Socialization can happen the other 4 days of the week, but if you can get higher productivity that one day, save fuel, reduce stress, reduce pollution and congestion, maybe the time has finally come.

Patrick

According to the people I work with the traffic over the last week has been easing up some (people who commute ~30miles). It seems like people do have options when gas is nearly $4/gallon (Puget-sound area).

Looked normal to me this morning as I walked to work.

gr

"Current IRS limits allow for participants to set aside up to $115 a month tax-free to pay for transit and vanpool commuting costs."

Although this appears to be a good direction, the dollar amounts are inadequate. Today's average round trip bus fare in most large cities is $5.50 - adding the cost of commuter time, down time, getting to and from mass transit access points (e.g. driving to bus stations). These programs need to consider the old but still applicable axiom that "time is money" at least for the employee.

One approach around this might be to start employment clocks at commute start. This shifts expense burdens to employers but those could be fully deductible by IRS. And it effectively lowers the at work hours which employers will moan about. But greater incentives need to be put in place if mass transit is to replace some portion of auto commuters.

To that end a 2/1 deduction for mass transit expenses seems reasonable. And we should not forget that rising fuel costs will raise commuter fares in line with costs at the gas pump.


SJC

Just getting 45 minutes to the airport costs $93 for a shuttle each way here. This should be preferred over a single driver mode for congestion and fuel savings. But they just figure is will cost you $60 for 5 days parking so they got ya.

If we want to save fuel we need to look at all these things. Employers might reimburse the employee for the shuttle ride and maybe not. Maybe their policy is for you to drive your car, them might pay for parking but not the mileage using your own car. Either way it is better to have 3 in a shuttle than one in a car for all of us.

shigley

Since my wife started telecomutting a year ago, her miles driven per year has dropped 40%. She is much more productive, her clothing cost has decreased, and eating at home, rather than eating out, is also a cost savings. Another added benefit is deducting a home office on our income taxes. The problem with most small business owners is trusting the employees to be self starters, but I should think that would show up in the lack, or less, productivity.

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