Commuting for the Hybrid Workplace
A McKinsey study found that 52% of employees would prefer a flexible working model on a permanent basis moving forward. That same study found that over 50% of employees would prefer to work from home at least 3 days per week.
We’ve all likely seen some form of these statistics. And the future is clear: flexible remote work is here to stay (for those jobs that can accommodate it). What does that mean for commuting and the traditional commuter benefits programs offered by many employers?
To answer that question, let’s explore the approaches of two hypothetical companies: NormCorp and FutureCorp.
NormCorp: A Tale of Persistence
Prior to the Covid pandemic, NormCorp – a 200-person company – operated its commuter benefits program much like any other company. They offered either free parking or a free public transit pass to each of their employees. Employees could opt in to each program at the start of every month, which 80% did for parking and 20% did for the transit pass.
Employees were generally happy – they got a free commute (unless you count the cost of car ownership, but that’s another story altogether). And management couldn’t complain either. The program was easy to implement and not too expensive. Parking cost the company $200 per month per person and the transit pass was $100 per month.
On a per day basis, NormCorp was spending $8.50 per employee.
But now post-Covid, things have changed. After some growing pains, NormCorp has fully embraced the idea of the hybrid workplace. Their employees are now allowed to work from home two days per week.
Already stressed with figuring out the logistics of flexible work from home, NormCorp decides to keep their commuting program exactly the same. When the office reopens and employees are faced with opting into their commuting programs once again, NormCorp sees a change. Now only 5% opt into the transit pass, while the other 95% choose parking.
What happened to the other 15%? Many of them didn’t feel safe on shared public transit (despite the evidence to the contrary) and weren’t willing to commit to transit for a full month just yet. NormCorp understands their employees’ concerns and assumes things will change moving forward. Meanwhile, they’re faced with figuring out overflow parking to deal with the extra demand.
Six months go by, and NormCorp reviews their commuting program. Despite the fact that people now say they’re comfortable on public transit, they only see a 10% uptake in their transit pass, still just half of their pre-pandemic numbers. NormCorp is worried. Are they never going to get back to their pre-pandemic commuting habits?
They’re now paying an additional $2,000 each month for commuting despite the fact that employees are commuting 40% fewer days than before. And what’s more? When they do the math, NormCorp realizes that their daily cost of commuting is now $16, nearly two times the cost pre-pandemic.
Something’s got to change.
FutureCorp: A Story of Change
Before the pandemic, FutureCorp was a lot like NormCorp. They too were a 200-person company, and they too offered a choice between a free monthly parking or transit pass. Like their counterparts, 80% of employees at FutureCorp chose parking and 20% chose transit.
Just like NormCorp, FutureCorp was spending $8.50 per day per employee on these programs. (How convenient for our story!)
But when the Covid pandemic hit, FutureCorp was quick to adjust. They embraced the new work-from-home normal and quickly realized the benefits of replacing the drive to work with a walk to the home office. As expected, when they were planning their return to the workplace, remote work was a critical piece of the puzzle. However, FutureCorp’s employees were eager to see their colleagues in person again, so they embraced the idea of a hybrid workplace and decided on a 3 days in the office, 2 days at home model (just like NormCorp).
But where NormCorp stuck with their previous commuting programs, FutureCorp embraced change. Instead of sticking with the same monthly parking or transit pass program, they implemented a new flexible, daily commuting subsidy program.
Here’s how it works: Employees are given a pool of money to use whenever they commute. They can use the money to pay for parking or a bus ticket, but they can also use it on any other form of transportation – carpool, bikeshare, scooters, rideshare, and more. Now, no matter how an employee chooses to get to the office, they’re covered! They can even choose a different commute every single day they come into the office. Carpool on Tuesday, driving and parking on Wednesday, and the bus on Thursday.
And the best part? FutureCorp only pays for what the employees use.
Just like employees at NormCorp, the employees at FutureCorp are also hesitant to take public transit right away. But instead of shifting to a drive alone commute, employees here realize they have tons of new options to explore. Because of that, FutureCorp sees no increase in parking the first month! While public transit use is down to only 5% of the company, bikeshare use is now up to 10% and carpooling up to 5% (driving and parking is still at 80%).
FutureCorp is excited – they’re employees are happier than ever. And when they look at their budget, their excitement turns to elation. Because they’re only paying for commutes when employees take them, their cost per month has actually decreased from $180 per person to $160. They’re already saving $4,000 each month!
And as time goes by, many employees (most of whom drove everyday before the pandemic) soon realize the options in front of them. Now that they can choose how they want to commute each and every day, they start to take advantage of other options. Additionally, since no commitment is necessary to try a new mode, people slowly shift back to public transit over time.
By the six month mark, only 60% of FutureCorp’s employees are driving and parking. Their transit ridership is back up to 20%, while carpooling has increased to 10%, and bikesharing has stayed steady at 10%.
While NormCorp is spending an additional $2,000 per month on commuting, FutureCorp is saving $8,000!
It’s a win-win.
Flexible Commuting Subsidies with Commutifi
FutureCorp couldn’t have done this on their own. Planning, managing, and tracking daily flexible subsidies is complicated, but Commutifi’s Mobility Card makes it easy. Customize where, when, and how much can be spent on each card. Then track and analyze card usage to level-up your commuter programs. And while motivating commuter behavior change can be hard, the Mobility Card can help with that too. Offer monetary rewards (eligible for coffee, lunch, or whatever you designate) that automatically load onto cards after commuters make good decisions.
Article by Andy Keeton, TDM-CP from Commutifi. Commutifi’s team of commute specialists are here to help you design the perfect data-driven commuter programs. Contact them to start working towards your commuting future or send an email to firstname.lastname@example.org and we’ll be happy to set up an introduction!