Of the 10 largest metropolitan areas in the U.S., Chicago is the only one without a formal transportation demand management plan. MPC compiled the top ideas from other communities
Flickr user François Proulx (CC)
Since 2016, MIT has fully subsidized bus and subway rides for faculty and staff as a way to reduce their carbon footprint and parking costs.
- By Audrey Wennink and Research Assistant Brandon Duong
- December 18, 2018
What is transportation demand management?
When McDonald’s recently relocated from suburban Oak Brook to Chicago’s West Loop neighborhood, employees’ commute patterns changed dramatically: according to MPC’s recent Transit Means Business report, 90% of McDonald’s employees used to drive, and now, 90% don’t drive, with most using transit to get to work. How? McDonald’s moved to a transit-accessible location, offered education, subsidies and last-mile shuttles to make public transit such an attractive option that it made sense for most employee to choose transit.
When it comes to how we commute across the Chicago region, our employers are key partners. Employers have tools to support sustainable, affordable, healthy and less stressful commutes—tools like pre-tax transit fare payment, transit subsidies, last-mile shuttles, parking cash out, and bike subsidies. These tools make it easier and more affordable to commute through public transportation than through driving, and are collectively referred to as transportation demand management (TDM), strategies that change behavior in order to increase transit system efficiency and achieve specific planning objectives.
As Chicago faces its third straight year of population decline, and as scientists warn of impending climate disaster due to greenhouse gas emissions, we need to take bold steps to address our transportation needs in a manner that is sustainable, equitable and efficient.
Of the 10 largest metropolitan areas in the U.S., Chicago is still the only one without a formal transportation demand management organization. Communications and coordination on TDM can be organized by a city (like Austin, TX), or metropolitan planning organization (like San Diego Association of Governments). MPC has been working to improve transportation demand management for years, but our region’s progress has been way too slow. But high competition for talent, increased focus on equity and the urgency of climate change may increase the pace of change.
MPC’s recent Transit Means Business report highlights how Chicago-area employers, like McDonald’s, are taking major steps to support their employees’ commutes via transit. While many are leaving their traffic-jammed commutes behind to ride transit, walk or bike—and proactively choosing jobs accessible by those modes—progress must be made for changes to have a meaningful regional impact on livability, congestion and the environment. As Chicago faces its third straight year of population decline, and as scientists warn of impending climate disaster due to greenhouse gas emissions, we need to take bold steps to address our transportation needs in a manner that is sustainable, equitable and efficient.
What’s legally required elsewhere isn’t yet “a thing” in Chicagoland: pre-tax transit fares
One of the easiest steps employers can take to encourage employees to reduce driving alone to work is enabling pre-tax transit fare payment via benefits systems. This means allowing employees to withdraw money from their paychecks to use for transportation before taxes are deducted, reducing the amount of tax that the individual must pay. The catch is workers can only get the tax break if their employer offers pretax transit benefits. Every employer on a transit route in the Chicago region should be offering this benefit. In other large cities–such as San Francisco, Washington, D.C. and New York–all employers over a certain size are legally required to do so.
Commuting as an employee benefit: Dallas, LA, Seattle and Denver are leaving Chicago in the dust
More progressive employers–especially those in high competition for talent–are treating the commute as part of their benefits package, with some providing not only pre-tax benefits but also partly or entirely paying for transit fares. For example, CA Ventures, a real estate investment management firm headquartered in Chicago, fully subsidizes public transportation for its employees, including CTA, Metra, Pace or Divvy bikeshare memberships. The results are impressive: the majority of CA Ventures’ 170 employees commute via public transportation.
Despite Chicago’s robust transit system, employer-based transit discount or subsidy programs are less common than they should be here. For example, the Dallas, Los Angeles, Seattle and Denver transit agencies have programs for bulk transit passes to be distributed through employers, who can provide them to employees at a discount or subsidize fares. In Dallas, Texas Instruments partnered with the Dallas Area Rapid Transit System (DART) to provide Gold passes to all its employees based in the Dallas metropolitan area, providing unlimited access to buses and trains.
The role of large institutions: a commuter program at MIT
Large institutions can have a major impact on the transportation environment in their surrounding community. As the area around the Massachusetts Institute of Technology (MIT) campus in Cambridge, MA has developed into a hub of technology and business, the University decided it needed to address the issue of transportation in a sustainable manner. In 2016, MIT rolled out a commuter program providing faculty and staff free unlimited access to the subway and buses, and a 60% commuter rail subsidy. By investing in transit for their employees, the institution has taken a critical step towards reducing its carbon emissions and reducing congestion in the surrounding community. UIC is working to increase use of sustainable transportation as it implements its Climate Action Implementation Plan.
What about parking? Seattle Children’s Hospital finds a solution
Transit-related policies are only one component of transportation demand management. It is equally important for employers to reduce reliance on driving through parking policies. Step 1 is to locate offices in locations that are accessible via transit, biking and walking. Step 2 is to establish sustainable policies for how modes are subsidized or incentivized. It is important to recognize that employers providing free parking are subsidizing and encouraging driving to work. If employers do provide parking to their employees, they should offer all employees the option of continuing to receive free parking or a cash stipend. Parking cash out allows the employee to decide which is more valuable–free parking or more take-home pay. The employer can save money by leasing fewer spaces, and offering employees a cash payment that is less than what they were paying for the parking.
Sustainable policies to incentivize mode shift work especially well when complemented by policies that disincentivize driving, particularly pricing. If employers charge for parking, the most effective strategy to reduce driving is to charge by the day, not the month. When offered a monthly permit, people naturally want to maximize their investment and use it as much as possible to make up for the cost. When charged daily for the true market cost of parking, employees recognize how much driving is costing them and are more likely to drive only when they really need to.
For example, the Seattle Children’s Hospital realized the single most effective thing it could do to reduce auto commute trips is to charge the market rate for parking and eliminate monthly permits. As a result of this and other TDM policies, they have seen a significant reduction in people driving alone to work. A main reason the hospital prioritized reducing transportation-generated emissions is because two of the top three reasons children come to the hospital for help are asthma and bronchiolitis, and air quality has a direct impact on the health of the children they serve.
The greenest option
It’s important to recognize that walking and biking generate zero emissions and are the most healthy and affordable modes of transportation that employers can support. Companies should take into account walkability of the area and availability of bike facilities when they are considering a new location both for people making the whole trip via bike or on foot, and also for those taking transit who walk or bike from the transit station. For example, when Method established its factory in the Pullman neighborhood, it paid for construction of sidewalk that would connect from the front door of the factory to the bus stop. Workplaces that wish to encourage biking as a mode of transport should consider investing in infrastructure that can support it. For example, the Metropolitan Planning Council offers annual membership to Divvy bikeshare as part of employee benefits, as well as having shower facilities at its office and a secure bike room in the building. Other strategies to incentivize biking can be financial. Christopher Burke Engineering in Rosemont pays employees per mile biked to work, provides a monthly breakfast for bike commuters, and raffles off biking accessories.
Our communities will face many challenges in the coming years as cities continue to grow and our climate continues to warm. These challenges will require us to develop creative solutions to meet our transportation needs in a sustainable manner, and employers play a central role. The strategies listed here are just some of the TDM policies that can be implemented that have widespread benefits to workers, employers, and communities as a whole. By reducing our dependency on cars, we increase transportation safety, improve community health, reduce stress, and reduce employee transportation costs. The Chicago region is ripe for employers to step up on transportation demand policies and be a big part of the solution.