Equal benefits for different commutes

Crossing the street in downtown the other day, I heard two people talking about where they park. One has a space in a lot paid by his employer. I couldn’t quite catch where the other person puts her car, but she commented about how expensive parking is downtown.

This made me wonder if downtown employers that provide parking see it as a benefit and if any employers “cash out” parking. (To cash out parking means to determine the value of the parking provided or subsidized by an employer and to provide that per-employee amount to all employees, to put toward whatever form of commute they want to make — bus, train, bicycle, on foot, via carpool, or driving alone.)

I called Dan McLaughlin at Commuter Connection to find out more. Commuter Connection is the transportation management organization for downtown Minneapolis. They work with downtown workers and employers on commuting options.

McLaughlin said that few employers fully cash out the cost of parking, but that many provide some payment for commuting. He said the average subsidy from employers in downtown Minneapolis is $40 per month, provided to employees to use however they wish.

I asked how much it costs to park downtown. He said the cheapest monthly cost is $150, in lots on the perimeter of downtown. For those who want to be closer to work, it will cost $350 per month to park. (To all reading who are chuckling about getting free parking, a reminder that parking costs a lot to build and maintain, takes up oodles of space, and, especially where it’s free, is a hidden subsidy for keeping people in cars.)

McLaughlin said he and the staff at Commuter Connection often work with suburban employers to figure out commuting options before they make the move to downtown. They will host transportation fairs with employers and go over all the different options for commuting. When it comes to transit, he encourages companies to set up pre-tax transit for employees and enroll in MetroPass.

To enroll in MetroPass, employers contribute to the cost of a monthly bus pass, making it $76 per month rather than $114 for a monthly pass. The $76 cost of the monthly pass is taken out of the employee’s check on a pre-tax basis. Pre-tax means the charge for the pass is taken before federal, state, and payroll taxes, meaning an additional savings of roughly 30 percent, depending on tax bracket.

He said for-profit employers can receive a 30 percent tax credit from the state of Minnesota for the amount they subsidize the employee’s MetroPass. The list of MetroPass companies includes some of the biggest names in downtown and across the metro, for-profit and nonprofit. At least 10 people at a given employer have to participate for the company to be eligible for MetroPass.

One other pro tip from McLaughlin: employees who choose to take transit may get lower car insurance rates simply by letting their provider know they won’t be commuting by car. 

Providing equal benefits for employees no matter how they arrive is becoming more common. Some employers not only subsidize transit passes but also provide direct payments for getting to work on bicycle or on foot. Many for-profit and nonprofit employers are doing this. In the case of Quality Bicycle Products (QBP) in Bloomington, employees track their commutes on bicycle and receive a contribution to their health savings account for using the bicycle a minimum number of times per month. I’m happy to say my employer is another. For every day I bicycle or walk to work, an extra $3 is added to my paycheck. 

Employers are motivated to do this for various reasons. At QBP, a decision to encourage active commutes fit with company values. But, it also had big upsides in company health care costs. QBP worked with their provider to study the impact of their wellness program. They found that it was very worth the time and effort to encourage other forms of commuting. The $45,000 annual investment in employee health and well-being generates more than $170,000 in healthcare cost savings. The investment included providing indoor bike parking and showers, direct payments for active commuting, and regular encouragement, such as free breakfast. QBP made it part of an employee’s job description to be the company’s alternative transportation coordinator.

QBP also has fewer parking spots because of the commuter program. “It’s one of the greenest things we do,” says Seth Nesselhuf, Advocacy, Community Service and Environment program Director at QBP.

For those interested in exploring their options, several of the region’s transportation management organizations currently are promoting the Switch My Trip campaign. As Commuter Services, which works with employers in the I-494 corridor, puts it: “By Oct. 31, pledge to switch just one trip when you usually drive alone and instead take the bus or train, carpool, bicycle, walk, telework or vanpool. Do it for a chance to win great prizes ($50 gift cards for Target, Lunds & Byerly’s, several restaurants including; Manny’s Steakhouse, Chino Latino & Good Earth), save money, reduce stress and ease your impact on the environment. Once you try a different way of getting to work, school or out with friends, you likely won’t want to go back to driving!”

Hilary Reeves is communications director for Transit for Livable Communities.