Chapter 10 Video Case: Employer-Subsidized Commuting

The daily commute to work has become a growing problem in many parts of the United States. The average round trip takes about 50 minutes, double or even triple that in large metropolitan areas. The U.S. Census Bureau says Americans average more than 100 hours commuting to work each year. The most recent Census data show that the number of people with a commute of 90 minutes or more has increased by 95 percent in the last decade. Wasted time and productivity, along with damage to the environment, are no longer the only concerns raised by commuting. With the dramatic rise in the price of gas and the increased cost of public transportation, commuters are searching for other alternatives.

Safeco, an insurance company with offices in downtown Seattle, has come up with a multi-faceted solution. Twenty-three percent of its employees work at home in offices the company subsidizes. Those who commute to the office have several options. Safeco offers employees an alternative to buying bus or water taxi passes at up to $170 a month or driving to work and parking, which costs about $200 a month in addition to the price of gas. For just $25, employees receive a flex pass for a variety of public transportation; Safeco picks up the rest of the tab and even helps employees find the best way to commute.

Besides the flex pass deal, Safeco offers other commuter programs. Employees who join the van pool program receive a subsidy of $65 a month. Parking for employees in a car pool is subsidized at 80 percent. The company also offers a secure place to store bicycles and shower and locker facilities. For those who must have a car at work, Safeco provides unlimited use of on-site zip cars for business travel and up to five hours a month for personal use. Employees are embracing these low-cost commuting options. Now about 90 percent of Safeco employees have given up longer commuting by car, up from 50 percent in 2006.

Other companies have developed similar programs. Since Microsoft introduced the Microsoft Connector, a company bus service provided at no cost to employees, it can’t keep up with the demand for new routes. Google also runs a bus service, transporting staff from around the San Francisco Bay area to the company’s Mountain View headquarters.

Along with a tax break, these firms are getting good press for their commuter programs. Safeco was listed on the EPA’s 20 best workplaces for commuters and has received several local awards. Microsoft, also based in Seattle, has also earned a spot on that list. Questions

1. What forces of change have led to employer-subsidized commuting?

2. How does subsidized commuting give Safeco and other companies an advantage in recruiting and retaining top employees?

3. In what ways is subsidized commuting socially responsible?

Sources: Rhymer Rigby, “Sit Back, Relax, and Enjoy the Ride…,” Financial Times, May 27, 2008, p. 12; Michelle Conlin, “Suddenly, It’s Cool to Take the Bus,” Business Week, May 5, 2008, p. 24; “Commute Facts and Figures,” Association for Commuter Transportation, pp 1-3, www.actweb.org, accessed July 2008.