Employee Cost Sharing


Historically, the most common way employers supported the travel expenses of employees was by offering free parking. In recent years, employer cost sharing options have increased dramatically. Federal policy recognized the inherent inequality in subsidized parking and offered tax benefits to employers and employees who used transit. Some employers, recognizing that difficult and costly commutes contributed to employee turnover, began to offer benefits such as ridesharing, parking cash out, guaranteed ride home and others. A common mechanism for offering employee commute options is for several businesses to form a Transportation Management Association (TMA), often with governmental partners, to professionally operate and manage a multi-faceted program of commute options.

Employers that offer free parking should price it at rates equivalent to the local market. Employees who don't use the employer-owned parking should have the option of "parking cash out" (cash in lieu of the cost of parking) or federal transit pass benefits, which are tax benefits to the employee and/or employer for the purchase of transit passes. The employer can buy transit passes and deduct them as a business cost, or the employee can purchase transit passes with "pre-tax" dollars. 

TMAs provide a greater level of sophistication and usually offer multiple options including ride sharing and vanpooling, bulk sales of transit passes, parking pricing and management, promotion of biking and walking, and marketing of commute options. TMAs may operate car sharing programs, like the Clifton Corridor TMA near Emory University in Atlanta, which includes car sharing as part of a "bundle" of transportation choices designed to reduce congestion. They may provide full-service transit pass marketing and administration for participating businesses. TMAs are flexible and are designed to meet local needs and demands, with a mix of private and public funds.

Benefits & Risks

The primary sustainability benefit of employer cost sharing of commute costs is to provide travel choice, which generally moves people away from single occupant travel. This is a good example of an environmental benefit also being good business, at least in terms of employee retention. Transit, vanpooling and ride sharing all decrease congestion and improve air quality. At the same time, they reduce employee stress and the cost of traveling to work. Reduction of parking at the employment site is an opportunity to return some parking area to a natural state or sell/lease excess parking so that another business can avoid paving a new area.

A 2003 survey conducted by the Center for Urban Transportation Research found that TMAs are most common on the coasts but can be found throughout the country. Many states have enabling legislation for TMAs. The survey found TMAs to be innovative and responsive to local needs. Their diversity makes them difficult to characterize, but one weakness shared by many TMAs was a lack of strategic planning and goal-setting. Also, TMA funding bases grew less diverse over time, with the majority of funds eventually coming from membership dues and government funds (other potential sources of funds include service contracts, fees for service, developer fees and business improvement districts).