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Thoughts on Transit

How Transit Benefit Programs Support Both Employees and Employers

by Ecolane / July 5, 2016

Public transportation is no longer synonymous with the lower class. In fact, the stigma that public transportation is only used by urban, low-income individuals and families has become a thing of the past. No longer are public transit riders viewed as poor or low-class; they are viewed as practical, environmentally conscious, resourceful, and efficient.

To put into perspective just how much growth the public transportation industry has seen, in 2014, Americans took roughly 10.8 billion trips on public transportation – the highest it has been in 58 years; on average, individual riders board a form of public transportation 35 million times each weekday; and more than 7,200 organizations across the United States offer public transportation alternatives.

Transit Benefit Programs

Public transportation has become such an essential part of our everyday lives that a large majority of corporations and businesses have begun to offer transit benefit programs to its employees. For the sake of clarification, ‘tax-free commuter benefits, also known as qualified transportation fringes, are employer provided voluntary benefit programs that allow employees to reduce their monthly commuting expenses for transit, vanpooling, bicycling, and work-related parking costs’.

If you live in a major city, then you’ve seen first-hand just how much pollution and traffic is caused by daily commuters driving to and from work. In an effort to reduce the environmental impact and minimize congestion on the roads, employers have implemented these commuter benefit programs to encourage the use of public transportation alternatives. Due to the wide range of form of public transportation, employers typically offer these benefits in the form of transit passes, or passes that permit the use of various transit services. However, some employers leverage an expense reimbursement model that allows employees to choose their preferred mode of public transportation, and references employee receipts to properly reimburse them.

The Benefits of Commuter Benefit Programs

The advantage of commuter benefit programs are two-fold; the benefits realized by employees, and the benefits realized by employers.

  1. Employees:

From an employee standpoint, there are significant advantages that can be gained through participation in commuter benefit programs. First, most employees have a set time that they are expected to arrive at work, and public transportation offers the convenience and accessibility of ensure that employees get where they need to be – when they need to be there. Second, public transportation offer substantial cost benefits. Not only are employees able to save hundreds of dollars in gas over the course of a year, but due to its positive impact on the environment, participation in commuter benefit programs offer employees with tax benefits as well. Finally, because employees aren’t the ones driving, they have additional time to spend on work-related or personal tasks, which ultimately increase their level of productivity.

  1. Employers:

Although the benefits to employers may seem less impactful than that of employees, it’s actually not the case. Employers that choose to implement a commuter benefits program are often perceived more favorably in the eyes of both employees and the community. Not only does it demonstrate a level of social responsibility, but it also shows a commitment to employee happiness and well-being. In addition, just like employees, employers gain tax benefits as well as increased employee productivity levels through the use of these programs.

How Transit Agencies Should Prepare for Commuter Benefit Programs

There is no question that the growing popularity of commuter benefit programs has had, and will continue to have, a hand in the success of transit agencies. Increased participation in public transportation drives revenue growth, which in turn, enables transit agencies to employ additional resources, invest in the implementation of newer and more advanced systems and technologies, and improve the rider experience. However, in order to continue the progression of public transportation and accommodate rising demands, transit agencies must have the necessary tools and systems, like route optimization software, to effectively serve their communities and riders.

Tags: Transit Trends Transit Operations

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