Changing Traditional Commuting Is Hard. Here’s How Benefits, Incentives, and Subsidies Make It Easier.

Aug 17, 2022

Zoë Randolph

Content Strategist

Few things are more ingrained than the way we get to and from work each day. In fact, commutes are often held up as examples of routines so habitual—like brushing our teeth or taking a shower—that we hardly even register what we’re doing. 

The entrenched nature of our commuting presents an obvious challenge to anyone in the business of changing commuting behavior: How can you get someone to rethink a choice they don’t even realize they’re making?

Luckily, there are several approaches we can take to shake people out of their routines and nudge them toward different, better options. Most often, these nudges occur in the form of pre-tax benefits, subsidies, or rewards. We’ll cover the benefits of each of these tactics, then get down to the details of how employers can maximize their impacts. 

Pre-tax commuter benefits

What are pre-tax commuter benefits? Pre-tax commuter benefits in the United States deduct commuting costs (for parking, transit, and vanpool) from an employee’s salary before taxes. 

Which kind of employers offer pre-tax commuter benefits? Some state regulations require employers to offer them, while other employers do so in lieu of covering commuting costs themselves. 

What makes pre-tax commuter benefits work? For employees who drive, take transit, or use a vanpool to get to work, pre-tax benefits are an obvious and painless way to save money. They’re also easy to manage from an administrative perspective, and can encourage employees to use transit or vanpool instead of driving alone.

Commuter subsidies and rewards

What are commuter subsidies? Commuter subsidies are funds offered to employees that can be used on specific, preferred commuting modes (for example, public transit or bikeshare). 

What are commuter rewards? Commuter rewards are similar to subsidies, only these funds are offered as, you guessed it, a reward for employees who use preferred commuting modes (for example, carpooling instead of driving alone). Aka, something you get after the fact, rather than before. 

Which kind of employers offer commuter subsidies and rewards? Often, employers who offer subsidies and rewards are those that pay for employee parking (and thus have a vested interest in encouraging alternative modes) and/or have a substantial budget to spend on employee perks. Often, these employers operate in competitive talent markets and can use subsidies and rewards as differentiators when wooing a desirable candidate. 

Subsides and perks are also popular with organizations that have limited parking and/or aggressive sustainability goals, since drive-alone commutes can make up a significant portion of an employer’s overall emissions. 

The most successful programs are found at workplaces that are well-connected to non-driving commute options, like bike lanes, transit stops, and bikeshare stations. 

What makes commuter subsidies and rewards work? First of all, subsidies and rewards are popular employee perks. What can we say? People like being paid! 

Plus, they’re a great way to get people out of cars. By giving employees a nudge (or a payout) for trying something other than driving alone, subsidies and rewards encourage people to rethink their regular commute and take a chance on something different. Oftentimes, commuters try a new mode simply to take advantage of a subsidy or reward, only to realize that they actually like biking or carpooling a whole lot more than they might have thought and end up sticking with it—or at least working it into their regular routine.  

The future of commuting benefits, subsidies, and rewards

Particularly when it comes to subsidies and rewards, many employers have historically struggled with the logistics of running a complicated program. It’s not easy to do it right! (Or at least, it didn’t used to be.) Partnering with individual providers and transit agencies, manual trip logging, and rewards that got deposited unnoticed into employees’ monthly paycheques could make the programs feel like more effort than they were worth. 

Today, there are better options. Flexible spending cards, like Commutifi’s Mobility Card, allow administrators to give employees a single flexible card that is compatible with any service the administrator chooses. The cards allow administrators to track how the funds are being used, and automatically give employees rewards when they complete particular actions. 

This dynamic approach makes it easier to create and manage programs that are easy to use, easy to track, and that encourage the behavior change that actually sticks. 

Go deeper into what the Mobility Card has to offer by downloading this whitepaper.

Better commuting starts here.

Better commuting starts here.

Better commuting starts here.