D.C. officials and transit advocates are pursuing a shift in the way employers offer commuting benefits to encourage more biking, walking and transit over solo driving.
A D.C. Council proposal would require employers who provide their employees with free or subsidized parking to give them the choice to cash out. With that option, workers would be more likely to ditch the car for a more sustainable mode of travel to work, officials say.
“I can much more easily rationalize hopping in my car and driving downtown when I got a free parking spot,” said Council member Charles Allen (D-Ward 6), a lead sponsor of the bill. “But if my employer says, we are going to give you a parking spot or we can give you transit benefits or cash if you bike to work, then I have the flexibility to make the choice that is best for me.”
The change, he said, would address a fairness issue for the workers who sometimes turn down a valuable perk because they don’t drive or who are forced to take it because otherwise they can’t get the benefit any other way.
The Transportation Benefits Equity Amendment Act of 2017 is one response to growing criticism that historically commuter benefits for drivers are better than those available to people who take other modes of transportation. For instance, a few years ago, transit agencies including Metro fought for parity in transit and parking in the federal commuter benefits program, which three years ago gave commuters the option to spend up to $130 on public transit pre-tax vs. $250 for parking. That started to change in 2015, and this year the cap for the transit benefit and the parking benefit is $255 per month.
Advocates for flexible benefits cite research suggesting that traffic congestion is associated with perks, such as free parking, and that financial incentives for non-solo drivers could help cities move toward more diverse commuting.
In the District, experts say a parking cash-out program could be part of the equation to achieve 75 percent of all trips on sustainable transportation, and it would benefit city residents the most because they are more likely to have easy access to other travel options, such as bikeshare, bus and Metro.
About 40 percent of D.C. residents drive to work, according to data from the District Department of Transportation, while 39 percent take transit, 15 percent walk and 6 percent bike.
“It reduces traffic and pollution, incentivizes a healthier commute, gives workers flexibility in their commutes, and is paid for with a parking space that’s not needed,” Cheryl Cort, policy director at the Coalition for Smarter Growth said of the legislation.
In 2014, the District joined New York and San Francisco in passing a law requiring employers with 20 or more employees to offer commuter benefits, giving thousands of workers access to the federal tax break to pay for transit and parking. Supporters say the new proposal would take the city a step further by requiring companies who subsidize parking spaces to offer an equivalent benefit to non-drivers.
It is unclear how many companies offer free or subsidized parking, but a city survey of 191 employers in 2016 found that 34 percent offer free parking and an additional 18 percent offer a parking subsidy, according to DDOT. Free parking is the most common fringe benefit to employees across the country and in many cases employers offer free parking or nothing.
“People who walk or ride the bus get nothing. It is unfair,” said Donald Shoup, a professor at the University of California in Los Angeles, and author of “The High Cost of Free Parking”.
Research suggests that having access to subsidized parking ranks high in someone’s decision to drive to work, he said. A survey of 5,000 commuters and their employers in downtown Los Angeles showed that free parking at work increased the number of cars driven to work by 34 percent, he said
“Employer-paid parking is an invitation to drive to work alone,” he said “The cash option rewards commuters who don’t drive to work alone. Parking cash-out therefore increases the share of commuters who carpool, ride public transit, walk, or bike to work.”
In California, legislation enacted in 1992 requires that employers with 50 or more employees who offer free parking must also give workers the option to take an equivalent cash allowance instead. But the law did not set any penalties for non-compliance.
As companies become more aware of the rule, Shoup said, they are realizing the benefits. Studies of firms in Southern California that offer parking cash-outs found the share of commuters who drove to work alone fell from 76 percent before the cash option to 63 percent afterward, he said. For every 100 commuters offered the cash option, 13 solo drivers shifted to another travel mode, he said.
That’s the kind of response the District is hoping for with its proposal. But it is unclear how the business community would respond. Supporters say they don’t anticipate any change for businesses beyond administrative.
“When a commuter takes the cash allowance instead of free parking, the employer saves the cash paid for a parking space,” explained Shoup, who was instrumental in the creation of California’s parking cash-out law. “The employer’s avoided parking subsidy directly funds the commuter’s cash allowance, so there is no net cost to the employer when a commuter forgoes the free parking and takes the cash.”
The D.C. “cash-out law” would not prohibit or discourage employer-paid parking. It would simply require that an employer who offers to pay for parking for employees who drive to work also offer to pay the same amount to those who don’t. The District would be the first major city to have an enforceable program if the bill passes.