Commuter Financial Incentives

Parking Cash Out, Travel Allowance, Transit and Rideshare Benefits


TDM Encyclopedia

Victoria Transport Policy Institute


Updated 4 June 2014

This chapter describes various financial incentives that can be used to encourage use of more efficient commute modes. These include parking cash out, travel allowance, transit benefits, and rideshare benefits. They are often provided as an alternative to subsidized employee parking.




Commuter Financial Incentives include several types of incentives that encourage alternative commute modes:


·         Employee Parking Pricing means that companies charge for parking at their parking lots or eliminate existing subsidies for off-site employee parking.


·         Parking Cash Out means that commuters who are offered subsidized parking are also offered the cash equivalent if they use alternative travel modes (Shoup, 2005).


·         Travel allowances are a financial payment provided to employees instead of parking subsidies. Commuters can use this money to pay for parking or for another travel mode.


·         Transit and rideshare benefits are free or discounted transit fares provided to employees (Commuter Check).


·         Company travel reimbursement policies that reimburse bicycle or transit mileage for business trips when these modes are comparable in speed to driving, rather than only reimbursing automobile mileage.


·         Tax and other government policies that support such programs, such as tax reforms (Inland Revenue 2004; Commuter Choice Webpage).



Commuter financial incentives can be prorated according to how much employees use alternative modes. For example, employees who drive twice a week would receive 60% of the full Parking Cash Out allowance.


These strategies create more neutral travel incentives. Most employees who commute by car receive a free parking space with a typical value of $50-100 per month (Shoup, 1999; Litman, 1999). Employers offer employees subsidized parking because these benefits are usually untaxed. A typical employee must earn $1,500 or more in pre-tax income to pay for a parking space that costs their employer only $1,000 to provide. In the U.S., transit benefits are tax-exempt up to $100 per month (see the Commuter Choice website at for information on U.S. federal implementation resources and incentives). This policy has motivated an increasing number of employers to offer transit benefits as an alternative to parking benefits (Commuter Check). In Canada, transit benefits are currently taxable, so few employers offer them (employees would just as well receive cash), but there are efforts to change this policy (CUTA 2005; PBO 2010).


Parking Cash Out and transit benefits represent the savings that result from reduced parking costs. Businesses that own adequate parking may perceive little short-term savings from reduced parking demand. However, over the medium and long term most firms have opportunities to benefit financially from reduced parking demand: to provide additional parking to accommodate growth, to lease or sell excess parking, or to use the land for a new building, equipment storage, or greenspace. Parking Management allows businesses to take advantage of reduced parking demand. To make it easier for businesses to save from reduced employee parking demand, commercial leases can unbundle parking (parking spaces are leased separately rather than automatically included with building space), and list parking as a separate line item (parking rents are listed separately from building rents).



How It Is Implemented

This strategy is usually part of a Commute Trip Reduction program. Employers establish rules that employees must observe to quality for financial benefits, and may require participating employees to sign an agreement that specifies their responsibilities, such as the number of days per month that they may drive to work and still qualify for a Parking Cash Out bonus.


Appropriate Parking Management strategies can facilitate implementation of this strategy. Minimum parking requirements can be reduced for businesses with Commute Financial Incentives. Transportation Management Associations can serve as brokers for any extra parking capacity.



Travel Impacts

Models are now available which can predict the travel impacts of a specific Commute Trip Reduction program, taking into account the type of program and worksite. These include the CUTR_AVR Model (, the Business Benefits Calculator (BBC) ( and the Commuter Choice Decision Support Tool (  


Table 1            Summary of Parking Cash Out Impacts (MTS 2006)



Employees Affected

Financial Incentive ($1995/month)

Decreased Parking Demand


Group A: Areas With Little or No Public Transportation

Century City District, West Los Angeles

3500 employees surveyed at 100+ firms




Cornell University Ithaca, NY

9000 faculty & staff




San Fernando Valley, Los Angeles

1 large employer ( 850 employees)




Bellevue, WA

1 medium-sized firm (430 employees)




Group Totals and Weighted Averages






Group B: Areas With Fair Public Transportation

Los Angeles Civic Center

10000+  employees at several organizations




Mid-Wilshire Blvd., Los Angeles

                1 mid-size firm




Washington DC Suburbs

5500 employees at 3 worksites




Downtown Los Angeles

5000 employees surveyed at 118 firms




Group Totals and Weighted Averages






Group C: Areas With Good Public Transportation

University of Washington, Seattle Wa.

50,000 faculty, staff & students




Downtown Ottawa, Canada

3500+ government staff               




Group Totals and Weighted Averages





Overall Totals and Weighted Averages







The travel impacts of a Commuter Financial Incentive program are affected by the magnitude of the benefits, the quality of travel choices, and demographics. In urban areas, travel tends to shifts primarily to transit and walking, while in suburban areas it tends to shift more to ridesharing, telecommuting and cycling. The Transport Elasticities chapter provides information on the travel impacts of various price changes. The figure below illustrates the effect such economic incentives typically have on single occupant vehicle (SOV) commuting.


Figure 1          Effect of Economic Incentives on SOV Rates (Rutherford 1995)

SOV travel decline as economic incentives for other modes increase.



Below is an example from the Trip Reduction Tables chapter, based on information from a major study for the Institute of Transportation Engineers (Comsis Corporation 1993). This indicates the impacts of transit financial benefits on commute trips for various geographic conditions. For example, a $1 (in 1993 U.S. dollars, comparable to $1.50 in 2010 dollars) per day transit subsidy at a transit-oriented activity center is predicted to reduce automobile commute trips by 10.9%, while in a rideshare-oriented Central Business District, the same subsidy would only cause a 4.7% trip reduction. Other Trip Reduction Tables indicate reductions for Transit and HOV subsidies if matched with parking fees.


Table 2            Transit/HOV Subsidy Vehicle Trip Reductions (

Worksite Setting





Low density suburb, rideshare oriented





Low density suburb, mode neutral





Low density suburb, transit oriented





Activity center, rideshare oriented





Activity center, mode neutral





Activity center, transit oriented





Regional CBD/Corridor, rideshare oriented





Regional CBD/Corridor, mode neutral





Regional CBD/Corridor, transit oriented





This table shows the predicted vehicle trips reduced by a given daily transit subsidy under certain conditions (Based on Comsis Corporation 1993)



A study of 1,110 Los Angeles area employee commute trip reduction programs found that financial incentives were the most effective of all the strategies evaluated (Cambridge Systematics 1994). The table below summarizes the findings.


Table 3            Effect of Various Financial Incentives on Commute Trips

Type of Benefit

Change in Drive Alone Mode Share

Bicycle Subsidy


Vanpool Seat Subsidy


Transit Subsidy


Other Employee Benefits




Transit voucher programs typically shift 20-percentage points of recipients’ commute travel from auto to transit (Oram Associates 1995; Schwenk 1995). Shoup (1997) found that total vehicle trips declined by 17% after Parking Cash Out was introduced at various urban and suburban worksites, as illustrated in Figure 2. These automobile trips reductions tend to increase over time: one employer found that solo commuting continued to decline each year after Parking Cash Out was introduced, as more employees found opportunities to reduce their driving and take advantage of the benefit.


Figure 2          Cashing Out Impacts on Commute Mode (Shoup 1997)

Parking Cash Out results in reduced automobile commuting and increases in carpooling, transit and nonmotorized travel.



Mode shifts tend to be greatest if current use of alternative modes is low. In New York City, where transit commute rates are already high, transit benefits only increased transit use by about 20%, while in Philadelphia, where more commuters drove, transit commuting increased 32% among recipients (Schwenk, 1995). Similarly, only 30% of employees who received transit benefits who work in San Francisco increased their transit use, while 44% of those in other parts of the region commuted by transit more (Oram Associates, 1995). These probably represent the lower range of potential mode shifts since they are marketed primarily as an employee benefit and are therefore most attractive to firms with high current levels of transit commuting.


Table 4            Travel Impact Summary

Travel Impact

Cash Benefits

Transit Benefits


Reduces total traffic.



Only affects commute trips.

Reduces peak period traffic.




Shifts peak to off-peak periods.




Shifts automobile travel to alternative modes.




Improves access, reduces the need for travel.




Increased ridesharing.




Increased public transit.




Increased cycling.




Increased walking.




Increased Telework.




Reduced freight traffic.




Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.



Benefits And Costs

Benefits include:


·         Increased Affordability, Transportation Options and Equity for employees who use alternative modes.


·         Reduced peak-period automobile traffic, resulting in reduced Congestion, road and parking facility savings, crash reductions and environmental improvements.


·         Increased demand for alternative modes can lead to improved Transportation Options (increased ridesharing, more transit service, bicycle and pedestrian improvements, etc.) due to economies of scale and increased public support.


·         Employee satisfaction. Employers have praised such programs for their fairness. It can help to recruit and retain some employees.


·         Flexible problem solving. Businesses can use this strategy to deal with particular parking problems, to accommodate growing demand, or make land currently devoted for parking available for other purposes.


·         Parking Cost Savings, less land devoted to parking, increased density and reduced impervious surface.


·         Increased tax revenue, since taxable cash bonuses replace tax-exempt parking subsidies.



Costs include the financial cost of the benefits and administrative expenses, minus parking cost savings. Administrative costs tend to be small once the program is established and incorporated into the payroll system. A typical Parking Cash Out program requires approximately two minutes per employee per month for administration (Shoup, 1997). Firms that own employee parking facilities may incur financial costs if they pay financial incentives but are unable to lease or sell excess parking capacity or use the land in other profitable ways. Shoup (1997) found that this resulted in a $2 per month average net cost per employee among eight employers studied.


A potential problem with financial incentives is the risk that employees may claim to commute by alternative modes but actually drive and use an off-site parking space, creating spillover parking problems. This may require additional Parking Management.


Table 5            Benefit Summary




Congestion Reduction


Reduces peak-period automobile travel.

Road & Parking Savings


Reduces automobile travel and parking requirements.

Consumer Savings


Financial rewards to commuters using alternative modes.

Transport Choice


Financial rewards to commuters using alternative modes.

Road Safety


Reduces automobile travel.

Environmental Protection


Reduces automobile travel.

Efficient Land Use


Reduces automobile travel, encourages multi-modal travel.

Community Livability


Reduces automobile travel, encourages multi-modal travel.

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.



Equity Impacts

Commuter Financial Incentives increase fairness by giving non-drivers a benefit comparable in value to what motorists receive. Although these programs involve subsidies, these are usually less than current subsidies to driving. They also increase vertical equity since non-drivers are more likely to be lower-income and physically disadvantaged than motorists.


Table 6            Equity Summary




Treats everybody equally.


Gives non-drivers benefits comparable to drivers.

Individuals bear the costs they impose.


Involves subsidy, but usually about equal to existing parking subsidies.

Progressive with respect to income.


Lower-income employees tend to use alternative modes.

Benefits transportation disadvantaged.


Provides financial benefits to non-drivers.

Improves basic mobility.


Improves access to employment.

Rating from 3 (very beneficial) to –3 (very harmful). A 0 indicates no impact or mixed impacts.




Commuter Financial Incentives can be implemented in any geographic conditions, although they are most appropriate and effective in areas with significant traffic, parking or pollution problems and sufficient alternative commute options. It is therefore most common in large urban and suburban centers. Businesses associations and individual businesses can implement this strategy. Developers may reduce parking supply in exchange for this program, and unbundle parking from building leases to make it easier for tenants to Cash Out parking.


Table 7            Application Summary





Large urban region.


Federal government.


High-density, urban.


State/provincial government.


Medium-density, urban/suburban.


Regional government.




Municipal/local government.


Low-density, rural.


Business Associations/TMA.


Commercial center.


Individual business.


Residential neighborhood.




Resort/recreation area.


Neighborhood association.


Any employment center.




Ratings range from 0 (not appropriate) to 3 (very appropriate).




Incentive to Reduce Driving



Relationships With Other TDM Strategies

Commuter Financial Incentives are often implemented as part of Commute Trip Reduction, Transportation Management Association and Campus Transport Management programs. This strategy supports and is supported by efforts to increase travel options (Transit Improvements, Ridesharing and Nonmotorized Transport), Smart Growth, and Comprehensive Market Reforms. Parking Management allows businesses to capture financial savings from reduced parking demand, and to address spillover problems if they occur. Also see Parking Solutions.




Commuter Financial Incentive programs can involve employers (which manage and fund the program), employees and labor organizations (who can demand such benefits and negotiate them into contracts), local governments (which can encourage development of such programs and adjust parking requirements in response to their implementation), developers (who can adjust building parking supply in response to such programs), and transit agencies (which support transit voucher programs). Transportation and environmental agencies may encourage and support such programs.



Barriers To Implementation

Although Commuter Financial Incentives are effective at changing travel patterns, they face a number of practical obstacles. Many businesses are unfamiliar with Commute Trip Reduction and Financial Incentives. There are often administrative barriers to providing such benefits, or resistance from employees and labor organizations to some types of incentives (Rankin, 1995). Some businesses may perceive no short-term financial savings from reduced automobile use if they have sufficient parking capacity. Surveys indicate that about 60% of employers own their own parking facilities, and 37% receive parking bundled with building leases (Kuzmyak, Weinberger and Levinson, 2003). Local governments may be unwilling to reduce parking requirements in response to such programs. Some employers may be concerned that employees will abuse these benefits (such receiving Parking Cash Out benefits but continuing to drive). Developers may be afraid of reducing parking supply when constructing buildings. Income tax laws favor parking subsidies over other employee benefits.



Best Practices

Organizations such as the Association for Commuter Transportation, Commuter Check and the USEPA’s Commuter Choice Program provide information on establishing and operating Commuter Financial Incentive programs. Best practices include:


·         Integrate Commuter Financial Incentives with other TDM efforts, such as transit improvements, ridesharing matching, Guaranteed Ride Home programs, telecommuting, etc.


·         Make programs flexible, so employees have an incentive to walk, bicycle, carpool, vanpool and ride transit, and to participate part-time or full-time.


·         Prorate benefits according to how frequently employees use alternative modes.


·         Including employees in program development and planning to help identify and address practical and equity concerns.



Wit and Humor

A Sunday school teacher is trying to convey to his students the immensity of god. “To god, a million years is like a minute,” he says.

The students did not seem adequately impressed, so after a moment he adds, “And to god, a million dollars is like a penny.”

One student raises her hand and says, “If god is so wealthy I think he should share one of his pennies with me.”

“He will in a minute,” the teacher explains.



Case Studies and Examples

Alameda County Congestion Management Program (

The Alameda County (East San Francisco Bay area, including suburban and rural areas) Congestion Management Program enlisted four employers to provide financial incentives to encourage reduced driving. The table below summarizes the results at the four worksites. The program managers conclude that financial incentives alone typically reduce automobile commute trips by 16-20%, and significantly more if combined with other TDM strategies.


Table 8            Alameda County Commute Incentive Program






Incentive offered



$40/mo transit pass


Average combined fuel savings and financial benefit.









Eligible Employees





Participants before

12 (3%)

7 (5%)

11 (3%)

147 (40%)

Participants after

108 (19%)

30 (23%)

93 (23%)

130 (34%)



UK Tax Policy Supports Commute Trip Reduction Programs

Tax, National Insurance Contributions and Green Travel (

Since 1999, the following are exempt from UK income tax and employment insurance:

·         Buses of 9 or more seats used mainly to bring employees to and from work.

·         Subsidies to public bus (but not rail) services used substantially for commuting.

·         Bicycles and cycling safety equipment.

·         Workplace parking for bicycles and motorcycles.

·         Alternative transport for car sharers to get home in exceptional circumstances, such as working late, domestic emergencies etc.

·         A cycling business mileage allowance of up to 12p per mile.



Commuter Check Programs (

The San Francisco Bay Area Commuter Check Program provides subsidized transit benefits to employees. Three program evaluations are summarized below. The first assessed travel impacts. The second was primarily an employer satisfaction survey. The third assesses how employee value this benefit.


Impacts of the Commuter Check Program

In November 1994, survey cards were sent to 239 Bay Area employers that purchased Commuter Checks for their employees. Approximately 1,800 survey cards were completed and returned by employees from 149 employers. The response rate from these 149 employers was estimated to be 40% to 50%. Key findings of the survey are summarized as follows:


·         About a third (31%) of the employees who receive Commuter Checks increased their use of transit. These employees reported an average increase of 3.24 transit trips per week. New transit trips were reported for both commuting and non-work purposes.


·         The increase in transit use as a result of Commuter Check was more pronounced at employers outside San Francisco. Employees outside San Francisco reported an increase in transit commute trips of 48% compared to 25% in San Francisco.


·         An estimated 17 million vehicle miles were removed from Bay Area roads in 1994 due to Commuter Check, and an estimated 61 million tons of pollutants were avoided.


·         Most of the users who increased transit riding as a result of Commuter Check had been non-users or infrequent users.


·         A large majority (79%) of respondents noted improved opinions of their employer as a result of receiving Commuter Checks, a third (35%) noted reduced stress from not driving to work or driving less often, and a third (33%) said job satisfaction had improved. Improvements in on-time arrival and productivity were also noted.


Commuter Check Customer Service Survey

In September 1999, the Metropolitan Transportation Commission (MTC) conducted a survey of Bay Area employers participating in Commuter Check. Commuter Check began in the Bay Area in 1991, and by August 1999, Commuter Checks had been sold to over 2000 employers. Through the mid-1990s, the program was expanding by approximately 35% a year. Since the pre-tax employee-paid option became available in June 1998, the rate of growth has exceeded 100%.

The survey was sent to approximately 1,350 employers who had ordered Commuter Checks within the previous 15 months. Key findings of the survey are summarized as follows:


·         38.5% of respondents chose to offer Commuter Check to improve their employee benefits package. 20% chose it to save money.


·         91% of respondents said that there were no major obstacles in implementing Commuter Check.


·         94.5% of respondents rated “excellent” or “good” when asked their overall satisfaction level with Commuter Check.


·         94.8% of respondents said that orders arrived as anticipated.


Chronicle Books Survey

Chronicle Books, an affiliate of the San Francisco Chronicle, has offered Commuter Check to their employees since 1993. Their program began by offering all employee not receiving parking a monthly $30 Commuter Check.


In 1995, Chronicle Books' employees were surveyed about the overall benefits package. Employees were asked to rank 15 benefits by how satisfied they were with each benefit, and also by the importance of each benefit.


The employees ranked Commuter Check second in the level of satisfaction provided, and sixth in importance (behind the heavy hitters of health coverage, vacation, dental plan, 401k and vision care). Approximately 20 percent of Chronicle Books' employees do not receive Commuter Check, suggesting that even higher ratings would have resulted if only the transit users were surveyed.


Kate M. Coldwell, Chronicle Books' Manager of Human Resources, noted, "We thought this was significant, especially given the low cost of the benefit. With Commuter Check, the benefit is immediate and employees are made aware of it every month. In addition, I always appreciate the ease of purchasing and using the vouchers."



California Parking Cash Out Experience

Shoup (1997) summarizes the impacts of eight parking Cash Out programs in Southern California. These programs:

·      Reduced single-occupancy commuting by an average of 17%.

·      Reduced carbon dioxide emissions by 807 pounds per employee per year.

·      Were considered fair and efficient by employers and employees.

·      Had a benefit/cost ratio exceeding 4.0.

·      Increased income tax revenue.



Spitsmijden: Dutch Experiments With Peak Avoidance Incentives (Donovan 2011)

An series of experiments performed in the Netherlands offered financial incentives between €2 to €7 (Euros) per day to selected travellers if they avoided travelling at peak times.  Results suggest the incentives have had a major effect on travel behaviour, with approximately 20-50% of participants either changing their departure time, switching routes, or shifting to another transport mode. Table 6 summarizes these results.


Table 6            Summary of Spitsmijden Experiments (Donovan 2011)



Modifications to travel behaviour

Departure time

Route changes

Mode shifts

No trips

1. Zoetermeer






2. Gouda






3. Hollandse Brug






4. Moerdijk Brug






Financial incentives caused travelers to change their peak-period automobile travel in various ways.



U.S. Transit Benefits (Baker, Judd and Oram 2010)

U.S. transit benefit policies have evolved gradually over three decades. Below are some highlights.

1984  - Legislation “codifies” use of transit benefits, allowing $15 per month maximum benefit (“cap”); limited to employer subsidy

1987 - First transit voucher plan implemented in New York

1990 - First “Eco-Pass” plan implemented in Boulder and Denver, Colorado

1990s - Self-supporting national transit benefit services emerge

1991 - Inflation adjustment raises transit benefit cap to $21

1992 - New legislation raises cap to $60 per month

1995 - Inflation adjustment raises cap to $65

1998 - Employee-paid pre-tax payroll deduction feature added

2000 - Executive Order mandates transit benefits for Federal employees

2002 - Monthly maximum benefit raises cap to $100

2005 - Inflation adjustment raises cap to $105

2007 - Inflation adjustment raises cap to $110

2008 - Inflation adjustment raises cap to $115

2008- City of San Francisco adopts transit benefit ordinance

2009 - January:  Inflation adjustment raises cap to $120

2009 - February: Economic stimulus legislation raises cap to $230, matching the cap for tax-free parking. This increase put the transit benefit on par with the parking benefit, and allows participants to set aside dollars before taxes for commuting costs, resulting in a monthly savings of up to 40%.

2009 - Transit benefit ordinances adopted by City of Richmond, CA, San Francisco Airport Authority, and City of Berkeley, CA


A 2001 Xylo Report ( on work-life issues found that 86% of American workers felt that commuter assistance benefits, such as discount transit passes, ride sharing boards, or parking benefits, were beneficial and useful, although only 17% were offered such benefits. In the Northeast 30% of employees were offered commuter assistance, compared with just 8% in the Midwest.


An April 2007 survey of New York City commuters by Accor Services ( found that 20% of respondents said their employers offer tax-free commuter benefits. Of those surveyed, 98% said they would participate if their employer offered this benefit.


A 2009 survey of 450 Human Resources professionals by the Society for Human Resource Management (SHRM) found that only 11% of respondents’ organizations offered IRS Sections 132 transportation accounts (pretax transportation reimbursement accounts), but this increased to 17% in September 2008, in response to high fuel prices.


A 2008 National Compensation Survey by the Bureau of Labor Statistics reported that 7.6 million workers in the U.S. received employer-provided commuter benefits, about 5% of all U.S. workers.



UK Company Tax Reform (

In the UK, approximately 15% of all car mileage is by “company cars,” (vehicles purchased by companies for their employees) and a significant proportion of the second hand car market consists of ex-company cars. The old tax structure had a declining rate which created an incentive to maximize mileage. A new company car tax system implemented in April 2002. based the tax on the level of CO2 emissions they produce (see Company Car Tax Calculator at The business mileage discounts have been removed in order to eliminate the financial incentive which existed under the old system for some company car drivers to do unnecessary business miles. An evaluation study estimated that this reform has led to a reduction in business miles being travelled in company cars in the UK in 2002/03 of between 300 - 400 million miles and that this will continue in subsequent years. The reduction in business miles by company car drivers is estimated to equate to a reduction of 25,000 - 35,000 tonnes of carbon emissions in 2002/03. This represents a reduction in CO2 emissions equivalent to about 0.1% of all CO2 emissions from road transport in the UK.



Intel Corporation (

The Intel Corporation in Oregon provides free transit passes to its more than 10,000 employees. The company receives a significant discount on transit pass prices, plus state and federal tax credits.



Atlanta Program Steering the Way People Get to Work (

ATLANTA, Ga., July 22, 2004 - Cash for Commuters, a regional financial incentive program offered by The Clean Air Campaign, is changing the way metro Atlantans get to work - one commuter at a time.

According to two surveys of Cash for Commuters participants prepared recently by the Center for Transportation and the Environment (CTE) on behalf of the Georgia Department of Transportation, once commuters are motivated to give up their solo commutes, the vast majority continue to use alternatives. This research indicates that getting people to try a commute alternative - and paying them to do it - pays off in both the short term and, more importantly, in the long term.

The first survey questioned participants who had taken part in the initial launch of Cash for Commuters (October 2002 - February 2003). The second survey involved participants from the second offering (May - December 2003). Both surveys were conducted in April 2004, and revealed that of participants who had completed the program three to six months earlier, 74% continue to use a commute alternative, when no incentive is available to them. Of participants who had completed the program nine months to one year earlier, 64% continue to use a commute alternative.

"These results are exciting for several reasons," said Ellen Macht, executive director of The Clean Air Campaign. "First, we're seeing at least as many, if not more people continue to use the program in the short-term after the incentive ends -- in last year's survey of the three to six month group, 71% continued to use an alternative. Also, this is the first time we've been able to survey a group that was a full year out of the program, and the fact that so many are still using alternatives really validates the program and the benefits of commute alternatives. Macht continued, "Finally, even among those who went back to driving alone, most abandoned the change primarily due to factors out of their control, such as losing a carpool partner or changes in work schedules, not because they wanted to go back to sitting alone in traffic."

The vast majority of the former Cash for Commuter participants gave up their solo commute in favor of carpooling, with 68% of both groups carpooling during the three-month incentive phase. Transit was the second most used alternative, followed by telework and bike/walk. Since its initial launch in October 2002, more than 5,000 metro Atlantans have participated in Cash for Commuters. CTE estimates that Cash for Commuters participants in the first two waves have reduced more than 3,000 vehicle trips each day, adding up to a total of more than 19.5 million miles off metro roads from the initial launch through April 2004. These changes also mean tons of smog-forming emissions have been kept out of metro Atlanta's air. Cash for Commuters is the only financial incentive program in the country that pays cash directly to consumers for using alternative transportation. To qualify for Cash for Commuters, residents must not have used an alternative to driving alone - for their work commute -more than five times in the last 90 days. Commuters must live or work in the 13-county metro Atlanta nonattainment area. Once registered, commuters earn three dollars ($3.00) cash for each day they use a qualified commute alternative to travel to and from work within a 90-consecutive day period.



Ernst & Young (

The accounting and management firm Ernst & Young offers a pre-tax commuter transportation and parking benefits to its employees in partnership with WageWorks, starting in 2001. This is projected to save employees 40% of their commuting and work-related parking costs, and reduce the firm’s payroll expenses.


“Adding commuter benefits to our innovative benefits offerings is just one more reflection of Ernst & Young’s commitment to make the firm a great place to work,” says vice chairman of human resources, James L. Freer. “When we surveyed a group of employees regarding what benefits they value, a pre-tax commuter program was the most frequent enhancement by far, with 62% of the respondents asking for it. We are pleased to offer such a program that will make our people’s commute to work a bit easier.”



CH2M Hill (

Upon moving into new offices in the Seattle suburb of Bellevue, WA, the 430 employees of the engineering firm of CH2M Hill were offered $40 per month if they walked, bicycled, carpooled or took transit to work; or free parking if they drove alone. The firm’s drive-alone rate declined from 89% to 54%, and stayed there, while the percentage biking or walking increased from 1% to 17% (see table below). With parking demand down by 39%, the firm’s problem of ‘too many parkers for too few spaces’ disappeared. This approach reduced costs to the company, reduced traffic and pollution, while increasing tax revenue. The company won the 1999 Commuter Challenge Diamond Award for this program.


                                Before                  After

Drive Alone        89%                        54%

Carpool                                9%                          12%

Bus                         1%                          17%

Bike, Walk           1%                          17%



Mobility Mixx (

Mobility Mixx is a Dutch initiative to encourage more efficient business travel by offering employees a personal Mobility Budget, which increases transportation options beyond the company car to also include public transportation, ridesharing and taxi travel. This has proven to provide cost savings to businesses, more flexibility and efficiency for employees, and reduced traffic congestion, energy consumption and pollution emissions.



Spitsmijden’ (‘Peak Avoidance’) Project

The Dutch Spitsmijden (Peak Avoidance) project provided a group of commuters with positive incentives to reduce their peak-period car trips (Ettema, 2008). Incentives included 3 to 7 EURO per day financial rewards or credits to earn a smartphone. Travellers’ responses were measured using electronic detection equipment and travel diaries. The project results indicate that positive incentives are able to reduce peak traffic by 60-65%. Travellers mainly shift car trips to off-peak periods. Although the experiment was intended to achieve a structural change in travel behaviour, we observed that travellers returned to the peak period when the incentives ended.



Transit Voucher Programs (

The New York City region’s TransitChek program (the nation’s oldest) sells vouchers to 6,000 employers, provides more than $25 million worth of transit benefits (Schwenk, 1995.). The Commuter Check program in the San Francisco Bay area sells $6 million worth of vouchers to about 700 employers. This has increased transit use an average of 31% among those who receive vouchers, resulting in an estimated 17 million miles of reduced automobile travel, and $1.6 million in increased transit revenue in 1994.



Mo Mobility (

Mo Mobility is a new mobility system that combine bike sharing, car sharing and public transportation. A mobile phone app automates payments.



Parking Cash Out Programs Sponsored by Local Governments (

·         The City of West Hollywood, CA began cashing out parking in 1990. City Hall employees receive cash benefits of up to $65 per month for not driving to work.


·         In 1997, the City of Oakland, CA successfully implemented Parking Cash Out as a short-term solution to the loss of 88 employee parking spaces due to construction. All employees at the site were offered $40 a month in Commuter Checks to not drive to work at least three days a week. Employees who agreed not to drive to work just one day a week were offered a $20 Commuter Check each month. In one year, the program saved 14,650 commute trips, 12,306 gallons of gasoline and approximately 123 tons of CO2.


·         The suburban City of Pleasanton, CA offers $1.50 per day to employees who use a commute alternative instead of driving to work alone. All city employees are eligible to participate with no minimum days required. The program has resulted in an annual savings of 20,625 trips, which translates into 12,375 gallons of fuel and 123 tons of CO2. In 1993, the year before the program was implemented, only 28 employees were commuting to work using alternative modes. Average participation in 1994 was 55 employees per month and grew to 66 participants in 1995.


·         One local government requires building owners to include parking costs as a separate line item in leases, and to charge a minimum rate for monthly long-term parking that is equal or greater than the cost of a bus pass. This makes it easier for employers to determine the value of their current parking subsidies.



Vancouver Airport

In 2006 the Vancouver Airport began to offer staff who do not drive alone to work a $50 monthly rebate. Within five months 17% of employees were participating.



Federal Workforce Transportation Executive Order (

A U.S. Federal policy requires that by October 1, 2000, federal agencies shall implement a transportation fringe benefit program that offers qualified Federal employees the option to exclude from taxable wages and compensation employee commuting costs incurred through the use of mass transportation and vanpools. Federal agencies in the National Capital Region will implement a transit pass fringe benefit program for their qualified Federal employees.



References And Resources For More Information


Accor Services ( helps employers and transit agencies provide tax-free commuter benefits.


ACT (2001), TMA Handbook, Association for Commuter Transportation (; at


ACT (2004), The Role Of Demand-Side Strategies: Mitigating Traffic Congestion, Association for Commuter Transportation, for the Federal Highway Administration (


Association for Commuter Transportation ( is a non-profit organization supporting TDM programs.


Association for Commuter Transportation Commute Benefits Webpage:



Stuart M. Baker, David Judd and Richard L. Oram (2010), “Tax-Free Transit Benefits at 30: Evolution of a Free Parking Offset,” Journal of Public Transportation (, Vol. 13, No. 2, pp. 93-114; at


Best Workplaces for Commuters ( is a program sponsored by the U.S. Environmental Protection Agency and the U.S. Department of Transportation to recognize employers that provide outstanding commuter benefits. The website has a variety of resources concerning various Commute Trip Reduction strategies, including Parking Cash Out ( and Commuter Tax Benefits (


BusinessWeek Research Services (2008), The Impact of Commuting On Employees: How Commuter Benefits Can Help, TransitCenter (; at


Sally Cairns, et al (2004), Smarter Choices - Changing the Way We Travel, UK Department for Transport ( This comprehensive study provides detailed evaluation of the potential travel impacts and costs of various mobility management strategies, including case studies of Commute Trip Reduction programs.


California Air Resources California Parking Cash-Out Law Webpage (


Cambridge Systematics (1994), The Effects of Land Use and Travel Demand Management Strategies on Commuting Behavior, Travel Model Improvement Program, USDOT (


CCAP (2005), Transportation Emissions Guidebook: Land Use, Transit & Transportation Demand Management, Center of Clean Air Policy (


Commuter Check ( works with transit agencies to provide transit vouchers as tax-exempt employee benefit.


Commuter Choice Webpage (, Federal Transit Administration.


Commuter Challenge Program ( provides businesses with expertise and support for Commute Trip Reduction programs.


Commuter Choice Program ( provides information on Commute Trip Reduction programs and benefits, particularly U.S. income tax policies related to commuter benefits.


Commuter Choice Business Calculator ( indicates how much business can save by using Commuter Choice tax benefits.


Comsis Corporation (1993), Implementing Effective Travel Demand Management Measures: Inventory of Measures and Synthesis of Experience, USDOT ( and Institute of Transportation Engineers (; available at


CUTR (1998), AVR Employer Trip Reduction Software, Center for Urban Transportation Research, ( This software predicts the change in average vehicle ridership that results from various Commute Trip Reduction measures.


CUTA (2005), Tax Exemptions For Employer-Provided Transit Benefits, Canadian Urban Transit Association (; at the Employer Provided Tax-Exempt Transit Benefits, issue webpage (; full report at; summary report at; updated report at


Stuart Donovan (2011), Introducing Spitsmijden: Experiments With Peak Avoidance Incentives In The Netherlands, Victoria Transport Policy Institute (; at


Liisa Ecola and Michael Grant (2008), “Impacts of Transit Benefits Programs on Transit Agency Ridership, Revenues, and Costs,” Journal of Public Transportation, Vol. 11, No. 2, Spring 2008, pp. 1-18; at

Dick Ettema (2008), Using Incentives as Traffic Management Tool: Empirical Results of Peak Avoidance Experiment, Transportation Research Board 87th Annual Meeting (


FHWA (2003), Interactive Guidance Tool: Commuter Choice Decision Support System (CCDSS), Federal Highway Administration (


FTA (2000), “Parking Cash Out” and “Transportation Allowances,” TDM Status Reports, Federal Transit Administration (


Go Boulder (2007), Transportation Options Tool Kit, Go Boulder Program, City of Boulder, Colorado (; at


IBI (1999), Tax Exempt Status For Employer-Provided Transit Benefits, Transportation Issue Table, National Climate Change Process and Transport Canada; at


ICF (1997), Opportunities to Improve Air Quality Through Transportation Pricing, Office of Mobile Sources, EPA (


ICF (2003), Strategies for Increasing the Effectiveness of Commuter Benefits Programs, Transit Cooperative Research Program (TCRP) Report 87 (, Transportation Research Board (


ICF Consulting and CUTR (2005), Analyzing the Effectiveness of Commuter Benefits Programs, TCTP Report 107, Transportation Research Board (; at


ICLEI (1998), Local Government Guide to Parking Cash Out, International Council for Local Environmental Initiatives, (


Inland Revenue (2004), Report on the Evaluation of the Company Car Tax Reform, Inland Revenue (


KPMG (1996), Commuter Choice Initiative, prepared by Association for Commuter Transportation, U.S.DOT and U.S.EPA, Offices of Policy Development (


Richard J. Kuzmyak, Rachel Weinberger and Herbert S. Levinson (2003), Parking Management and Supply: Traveler Response to Transport System Changes, Chapter 18, Report 95, Transit Cooperative Research Program; Transportation Research Board (; available at


Todd Litman (1997), Employer Provided  Transit Passes: A Tax Exempt Benefit – Benefit/Cost Analysis, Victoria Transport Policy Institute (, for the Transit Advocacy Project; at


Todd Litman (1999), Pavement Busters Guide, VTPI (


Todd Litman (2006), Parking Taxes: Evaluating Options and Impacts, VTPI (; available at


Patrick McDonough (2003), Employer-Based Transit Pass Program Tool: Decision Support Tool for Employer-Based Transit Pass Programs, ITS Decision, Partners for Advanced Transit and Highways, University of California Berkeley ( Provides information on the effectiveness of various employee transit pass programs, selected based on geographic and program features.


MTS (2006), Cashout: Results of Ten Studies, Modern Transit Society (


National TDM and Telework Clearinghouse ( provides current information and resources on Transportation Demand Management and Telework programs. 


Nelson\Nygaard (2006), Traffic Reduction Strategies Study, Report and various appendices, City of Pasadena (; available at and


Cornelius Nuworsoo (2005), “Discounting Transit Passes,” ACCESS 26, University of California Transportation Center (, Spring 2005, pp. 22-27.


Oram Associates (1995), Impact of the Bay Area Commuter Check Program: Results of 1994 Employee Survey, Metropolitan Transportation Commission (


PBO (2010), Cost Estimate of Proposed Amendments to the Income Tax Act to Exempt Certain Employer-Provided Transportation Benefits from Taxable Income, Parliamentary Budget Officer (; at


Pre-Tax.Net ( helps employers and employees take advantage of U.S. tax laws that allow people to receive tax-free transit or vanpool service as an alternative to free parking.


Stephen Potter, Tom Rye, Black and M. Enoch (2001), The Potential for Further Changes to the Personal Taxation Regime to Encourage Modal Shift, DTLR and Inland Revenue



Steve Raney (2010), $2 Daily Workplace Parking Charge + $4 Cashout, Cities21 (; at


Elizabeth A. Rankin (1995), What Trip Reduction Programs And Strategies Don’t Consider: The City Of Seattle's Experience In Developing An Employee Commute Trip Reduction Program, Annual Meeting Compendium, Institute of Transportation Engineers (, pp. 559-562.


Scott Rutherford, Shauna Badgett, John Ishimaru and Stephanie MacLachlan (1995), “Transportation Demand Management: Case Studies of Medium-Sized Employers,” Transportation Research Record 1459, TRB (, pp. 7-16.


Judith Schwenk (1995), TransitChek in the New York City and Philadelphia Areas, Volpe Transportation Systems Centre, USDOT (


Donald Shoup (1995), “An Opportunity to Reduce Minimum Parking Requirements,” Journal of the American Planning Association, Vol. 61, No. 1, Jan. 1995, pp. 14-28.


Donald Shoup (1997), “Evaluating the Effects of California’s Parking Cash-out Law: Eight Case Studies,” Transport Policy, Vol. 4, No. 4, 1997, pp. 201-216.


Donald Shoup (1998), “Congress Okays Cash Out,” Access, No. 13, UCTC (, Fall 1998, pp. 2-8.


Donald Shoup (1999), “The Trouble With Minimum Parking Requirements,” Transportation Research A, Vol. 33, No. 7/8, Sept./Nov. 1999, pp. 549-574; available at


Donald Shoup (2005), Parking Cash Out, Report 532, Planning Advisory Service (, American Planning Association.


Transit Benefit Ordinance ( Website provides specific information on how municipal governments can encourage or require employers to offer transit benefits and other incentives for more efficient commuting.


TRIMMS (Trip Reduction Impacts of Mobility Management Strategies) Model ( by the University of South Florida evaluates the travel impacts, benefits and costs of various commute trip reduction programs and other mobility management strategies; at


TSTC (2001), Parking Management, Tri-State Transportation Campaign (


USEPA (1998), Commute Alternative Incentives, Transportation and Air Quality TCM Technical Overviews, US Environmental Protection Agency (


USEPA (2001), Directory of Air Quality Economic Incentive Programs, U.S. Environmental Protection Agency (


USEPA (2001), Transit and Vanpool Benefits: Implementing Commuter Benefits Under the Commuter Choice Leadership Initiative, Commuter Choice Program (, USEPA; available at


USEPA (2002), Business Benefits Calculator (BBC), Commuter Choice Program (, USEPA. 


David Van Hattum (2003), Expanding Commuter Options in the Twin Cities: Practical and Cost-Effective Steps To Reduce Congestion By Optimizing Travel Demand Management (TDM) Strategies, Minnesota Office of Environmental Assistance (, Downtown Minneapolis TMO ( and 494 Commuter Services (


WageWorks ( is a private company that provides comprehensive commute trip reduction support services.


Worksite Trip Reduction Model ( is an Internet-based computer model that can be used to predict the effects of a particular Commute Trip Reduction program, taking into account the incentives offered and geographic conditions.

This Encyclopedia is produced by the Victoria Transport Policy Institute to help improve understanding of Transportation Demand Management. It is an ongoing project. Please send us your comments and suggestions for improvement.




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