3.0 Employer-Based Transportation Management Programs

Employer-based transportation management programs, including incentives.
Section 108 (iii), CAAA

Introduction

Employer-based transportation management programs principally serve home-to-work trips in urban areas with populations of 250,000 or more. Primarily large employers, i.e., those having more than 100 employees at a single work site, have used employer-based transportation management programs. Employers provide information and incentives for employees who pool or use alternative forms of transportation for their daily commute.

Because home-to-work/work-to-home trips account for only 25 to 33 percent of all peak period trips made in most urban areas, the impact of commute management on area-wide VMT is limited. However, the commuter market represents the best potential for grouping riders, removing vehicle trips, and reducing VMT. Reducing commuter trips not only reduces emissions associated with VMT but also those associated with “cold starts,” when commuters set out in the morning, and “hot soaks,” when vehicles are parked at work and continue to produce evaporative emissions even after the engines are turned off.

Main Components

The 1990 CAAA required the implementation of employer-based transportation management programs in severe and extreme ozone nonattainment areas. The programs can consist of both voluntary and mandatory measures. According to EPA, a package of various complementary measures produces the greatest impacts. For an individual employer, trip-reduction effects can be seen immediately.

In addition to improving air quality primarily by reduced automobile trips and VMT, employer-based transportation management programs can provide savings benefits in the following areas:

  • Vehicle expenses,

  • Road construction and operation and maintenance (O&M) costs,

  • Expenditures on public services devoted to vehicle traffic, and

  • Resource consumption.

Employer-based transportation management programs can be highly cost-effective. Employers incur initial costs to design the program and to develop eligibility requirements for their employees. Monitoring and accounting costs are incurred periodically. Variation in costs of programs is based on the size of the employer, the nature and complexity of programs offered, and the amount of the subsidy offered.

The EPA has identified three types of employer-based transportation management programs with their associated costs:

  • General travel allowance programs require considerable planning and promotional efforts before implementation, but ongoing administrative costs are relatively small. Employees can use general travel allowances for any transportation mode or for non–transportation purposes. Program monitoring costs are low, and accounting costs are negligible because the allowance is given out to all employees as a bonus. The only significant cost to the employer is the cost of the allowance itself. The cost can be at least partially offset because the reduction in the number of employees needing parking can generate savings in maintenance, monthly parking lease costs, and savings in future capital requirements.

  • Targeted or specific allowance programs, such as transit and vanpool allowances, require ongoing administrative effort for accounting and monitoring eligibility requirements among employees.

  • Flexible use of allowances for transportation services provided by many different operators is the largest and most complex program and may cost even more because of greater administrative, monitoring, and accounting needs.

Because employer-based transportation management programs are implemented by private entities, they do not require a substantial investment in government resources. The amount of time required to implement an incentive program is relative to the complexity of the measures offered. Some employer-based transportation management programs can be implemented almost immediately, while others require more time.

One significant concern for practitioners is the long-term sustainability of program impacts. Program effectiveness can diminish if management support or financial commitment wanes, or if employee turnover increases. The EPA has found programs that include financial incentives are more likely to have sustainable results. The following list summarizes three types of financial incentives and their goals:

  • Tax incentives can allow employers and developers to provide facilities and equipment conducive to ridesharing. They may be in the form of investment tax credits or accelerated depreciation.

  • Subsidy programs can help initiate a program by providing additional funding to enlist employer involvement and reduce the initial risk for employers in attempting a new program. The goal of the subsidies is for employers to see the benefits of the program and then continue subsidizing on their own to satisfy employee desire for using the program and/or to comply with regional or local mandates. Some subsidy programs target commuters directly when employer involvement is unlikely or impractical. For example, vanpool subsidies tied to corridor reconstruction projects can aid in the formation of vanpools among commuters using the affected facilities, regardless of their particular job location.

  • Enabling legislation can eliminate or minimize barriers to widespread implementation of employer-based trip-reduction programs. A legal requirement mandating employer or developer involvement is a powerful determinant of program effectiveness. Mandatory participation is essential to assuring widespread participation by enough employers to have an area-wide impact.

Other Considerations

The EPA has several observations regarding employer-based transportation management programs:

  • Employer size and location do not seem to determine program effectiveness. Although downtown settings have an obvious potential to be effective, many successful programs have been located in large suburban activity centers. One possible explanation is that less ridesharing occurs naturally in those areas, which allows the program more opportunities to shift commuters’ mode of transportation.

  • The costs and benefits of employer-based transportation management programs are more difficult to measure than other mobile source emission reduction strategies. The primary area of uncertainty regarding these programs is the difficulty in determining causality between area-wide promotional efforts and VMT and emission impacts. It is a difficult task to separate out the impacts of these programs above and beyond those reported for employers or to speculate on the increase in VMT or emissions if these programs did not exist.

  • It is difficult to separate out the impacts of any single trip-reduction strategy; and the techniques are not strictly additive due to the complementary nature of many strategies. Care must be taken not to double-count the effectiveness of employer-based transportation management programs with the benefits of area-wide rideshare incentives.

  • The roles and responsibilities of the various public, nonprofit, and for-profit organizations involved in promoting ridesharing and other travel alternatives within a region need to be carefully delineated so that the various efforts are not perceived as either duplicative or conflicting by employers and individuals.