Commuter Incentive Programs
Changing commuter behavior isn’t easy. Commuter incentive programs provide a way forward.
The thinking behind commuter incentive programs
One way to think about commuter incentive programs is that they’re a proverbial carrot that you dangle in front of commuters, enticing them to reach for it. Going back to the earlier example, you give our theoretical commuter a solid reason why switching modes isn’t just better for the environment — it makes it better for her.
Commuter incentive programs use two major strategies to achieve this:
First, they can encourage commuters to adopt smarter, more efficient transportation choices by penalizing the continued use of inefficient modes. For example, a university that wants to reduce the number of people driving to campus can make parking more expensive. Sharp increases to hourly rates and semester-long or annual parking pass costs will give people pause to rethink their commuting choices. Chances are very good that a healthy number of them will elect to use public transportation or rideshare programs, which can be made available by the institution to provide an instant alternative.
Alternately, they can provide a direct incentive for choosing to leave single-occupancy vehicles behind and embrace other ways of commuting. This approach tends to work very well for businesses, as most companies don’t charge commuters for parking and therefore have limited options available for encouraging behavior change through penalties.
One trick that works well is to gently guide commuters to give alternative modes a try for a limited time. Challenges, friendly competitions, and gamification strategies all make alternative commuting fun while simultaneously encouraging people to engage with different ways of getting to work. The hope is that a significant percentage of participants will continue to use the alternative mode, occasionally or regularly, on a long-term basis.
Either way, the underlying thinking behind commuter incentive programs is simple: it identifies a wanted activity (changing commuter behavior) and finds a way to incentivize it (either by penalizing unwanted activity or rewarding wanted activity).
Penalizing unwanted activity
Organizations that charge commuters for parking or have other forms of financial influence can leverage them like assets, thus helping to encourage behavior change. Beyond increasing parking rates for single-occupancy vehicles, here are some other ways that organizations, particularly governments, have sought to penalize drivers of single-occupancy vehicles:
- Creating high-occupancy freeway lanes that are available only to vehicles with multiple occupants during rush hour
- Charging tolls for driving during peak periods
- Introducing gasoline tax surcharges at local fuel stations
- Using traffic control infrastructure, such as traffic lights, to give priority to transit vehicles at major intersections
In essence, these strategies all aim to make driving less convenient and/or more expensive. This, in turn, prompts drivers to investigate other ways to get around.
However, these strategies have their drawbacks. One that has been covered by some detail in the media is that such penalties tend to discourage lower wage earners more than people with higher incomes. As a result, they have been criticized in some circles for giving privileged use of roads to those who earn more money, which has proven to be a real problem in some places despite a lack of intent.
Penalizing commuters for choosing to drive to work tends to be a lot more difficult for businesses. It can create an oppressive sense of control over an individual commuter’s transportation choices, which can negatively impact the person’s perception of the company they work for and ultimately undermine their overall job satisfaction.
Rewarding wanted activity
For most businesses and organizations, rewarding wanted activity is an easier and more sensible approach. First, few companies have enough control over commuter behavior to implement the kind of penalties and disincentives that governments and municipalities can levy. Second, and more importantly, rewarding wanted activity sends a far more positive message than penalizing unwanted activity. The last thing a business wants to do is imply that it values higher wage earners more than those at the lower end of the salary ladder.
For transportation managers, the good news is that there are plenty of ways to reward wanted commuting activity. Some particularly high-performing examples include:
- Parking cash-out programs
- Providing pre-tax benefits to those who use qualified alternative commuting modes
- Points-based reward programs
- Social incentives, like commuter challenges and friendly competitions
First, parking cash-out programs continue to be a heavy hitter for businesses and organizations looking to reduce parking demand. Here’s how they work: calculate the monthly per-person cost of providing employees with parking. Factor in rental rates if the spots are leased, or maintenance costs if the spots are owned. Then, offer that amount (or slightly less) to any employee that is willing to give up his or her monthly parking privileges. Alternately, you can go half-and-half, by providing half of that amount in exchange for the employee’s pledge to give up his or her spot for half the working days in a month. They can also be customized and configured in countless other ways, depending on the needs of your organization and its commuters. It’s a great way to control demand for limited parking facilities, all while encouraging commuters to use shared or mass transit modes.
Next, United States-based organizations can take advantage of commuter pre-tax benefits. These updated guidelines boost the bottom line for businesses as well as employees, through raising the monthly income tax deduction allowance a commuter can claim on his or her year-end tax return. Commuters benefit by reducing their tax burdens by hundreds of dollars. Businesses benefit because these deductions lead to payroll tax exemptions, thus reducing their tax bills as well.
Points-based reward programs also work well. Organizations can assign specific point values to specific modes of transportation, allowing commuters to earn those points every time they log a commute using those modes. You can also offer bonus points to those who reach certain thresholds, such as using an alternative mode to commute every day in a given week, or a set number of times each month. Then, participants can redeem those points for prizes, which can be anything from cash and gift cards to event tickets or paid days off.
Finally, remember that there’s nothing quite like harnessing the competitive spirit to get people excited about taking part in a commuter program. Organize friendly competitions, such as inter-departmental challenges or a face-off against a local rival business to see who can log the most commutes or accrue the greatest number of points over a specified period of time, usually a month. Commuter gamification is a great way to get people to try out alternative commuting modes when they otherwise might not have, and at the end of the challenge, chances are that some participants will keep using those modes, particularly if a points program or other reward incentivizes them to do so.
Should your organization consider adopting commuter incentive programs?
Some jurisdictions have laws requiring businesses and employers of a certain size to maintain in-house commuter programs. This ensures that larger organizations promote alternatives to solo driving in the interests of fighting pollution and congestion.
If you aren’t bound by law to maintain a commuter program and you’re not sure whether or not to invest in implementing one, these facts and tips can help you make the right decision:
- Employers with a significant percentage of commuters who travel by car can benefit from incentive programs that encourage the adoption of different modes
- Incentive programs are a proven way to reduce or manage employee parking demand, thus helping control costs
- They can also be used as a strategy to manage campus parking, helping colleges and universities improve safety while saving money
- Companies that offer commuter programs tend to attract and retain higher-quality workers and benefit from higher levels of employee job satisfaction
- Commuter programs also help businesses qualify for valuable tax benefits and government incentives
At the end of the day: if your workforce is large enough that your employees would benefit from an incentive program and you want to do your part to drive positive change, then go ahead and introduce one.
Which approach should you take: the carrot or the stick?
The “carrot or the stick” is a commonly used term in the TDM industry to describe rewarding positive behavior (the carrot) or penalizing undesirable behavior (the stick). In our experience, the carrot is a far better option for employers as it effectively creates a positive reinforcement and reward structure. The stick is best reserved for governments and transportation authorities who don’t have to worry about their workforce turning on them or deserting them.
RideAmigos is the perfect tool for promoting, managing, and tracking the effectiveness of commuter incentive programs
Commuter incentive programs are always more effective when you have purpose-designed tools on hand to help manage them. The RideAmigos platform is a powerful hub that enables you to create, promote, manage, and administer commuter programs, incentives, rewards, and related community-oriented tasks. It delivers everything from powerful survey and reporting tools to trip-logging, rideshare matching, bikepooling support, and incentive administration management features. Dozens of businesses and organizations around the world are already using it to manage their commuter needs, and we’d love to help make you our next success story.
RideAmigos is a leading innovator in enterprise, university, and public sector transportation demand management. We provide organizations with cutting-edge tools to help people make smarter transportation choices and skip the solo drive. Contact us today, and join the movement to transform transportation through technology.