January 29, 2019
For years now, there has been a growing trend to invest in solving commute. According to Sequoia Consulting Group, a leading service partner that provides people-first companies strategic benefits, HR, retirement, and insurance services, 36% of companies offer a commuter stipend, up from 33% in 2017.
In surveying more than 750 U.S.-based companies, Sequoia found that:
This trend originated in legislation introducing employer-provided voluntary benefits that allow employees to reduce their commuting expenses for transit, vanpooling, bicycling, and work-related parking costs by setting aside pre-tax dollars.
Meanwhile, progressive companies have taken their support much further. With the increase in congestion and air pollution, competition for talent, and long commutes impacting employees’ health and productivity, companies are investing into commuting: financially and logistically supporting their employees’ travel to and from work.
Measuring the efficacy of these programs has always been a challenge. After all, how is one supposed to assess if offering a last mile shuttle is just a large monthly expense or a true necessity that allows you to attract and retain employees? How can you determine if the positive feedback you are getting from your ridehail program is just a, “well, duh, of course people would want free/subsidized rides to and from work,” or a differentiated benefit that enables your people to actually get to the office and work longer?
For many employers, the argument had been simple – it’s just the right thing to do and a low cost way to keep employees happy. However, other companies have asked for more data in order to warrant investment—data that hasn’t been readily accessible until recently.
Luckily, the team at Voy recently met Santiago Garces, the Chief Innovation Officer for the City of South Bend, Indiana. He has been pioneering “Transportation as a Benefit” with local employers. With a grant from Bloomberg Philanthropies, South Bend’s Innovation and Technology office set out to tackle the barriers to stable employment for low income individuals and shift workers in the region.
In the past, efforts were aimed at providing skills and training to tackle stable employment. This time around, they sourced ideas from the community. The responses were consistent—transportation and childcare were what people needed. Armed with a new perspective, they got to work, rapidly prototyping what transportation as a benefit could look like.
After interviewing and holding focus groups with more than 60 shift workers, 300 residents, and 50 applicants at job fairs, South Bend partnered with four large employers to offer transportation assistance via ridehailing to over 500 shift workers in food service, hotel service, housekeeping, maintenance, and elderly home care.
South Bend was able to approach exploring this new service in a manner that no employer would ever have the opportunity to do – as randomized controlled trials and iterative pilots. Can you imagine introducing a benefit at your company that is only given to a portion of your employees, with the expectation that it will iteratively change over time?
As a city tackling a gnarly challenge, South Bend had other priorities. In order to create a sustainable solution, an employer-funded “Transportation as a Benefit”, the team knew they would need to prove the business case of this benefit as a win-win for both employers and employees.
Garces explains, “our first pilots offered rideshare transportation to eight hospital employees using Uber gift cards. We later enrolled 188 participants in the Uber for Business platform, allowing us to view real-time data for 800+ rides[…]. We offered unlimited rides in our initial pilots to understand baseline behavior while experimenting with different monthly ride caps in other pilots. We tested a ‘skin-in-the-game’ model requiring employees to cover part of the ride cost and a vanpool model for vocational students going to and from the same training location.”
After 12 weeks of testing, 9 pilots, working with 500+ employees who took over 800 rides, the results were staggering:
Going beyond numbers that point to improved business performance and employee satisfaction, the pilots also led to success stories of true human impact. According to Garces, “one participant at risk of termination kept her job due to improved attendance and was promoted.”
Furthermore, to one of their partners, a senior in-home care provider, the benefits of this mobility offering resonated throughout the organization. Before the pilot, supervisors had found themselves stressed as caregivers regularly called in reporting they couldn’t fill a shift or be in a particular location. In these situations, supervisors would scramble to give rides to these caregivers or elect to fill the shift themselves. Armed with their new transportation benefits, employees were able to reliably take on additional shifts and the company was able to take on new, otherwise inaccessible clients.
Commuter benefits are a quickly evolving space and South Bend already has plans for more extensive pilots. Garces shared, “our initial idea focused on a single solution of ridesharing to address the problem of unreliable transportation. As we spoke with our target population, we discovered a range of transportation needs and preferences that require a more nuanced solution. We pivoted away from the idea of ridesharing as a one-size-fits-all solution to a model that integrates services from additional transportation providers to optimize cost and ridership.”
Naturally, as technology and new modes of transportation merge with a growing involvement from employers to solve commute, commute benefits are going to evolve, standardize, and empower a more productive and happier workforce. It’s exciting to see how South Bend plans to continue to evolve their offering.
Key takeaways from South Bend’s transportation as a benefit pilots:
In the coming weeks, we'll continue to dive into innovation in the commute space and how to holistically design commute benefits to best support your talent and business strategy. Stay tuned and join our mailing list to be the first to learn about what you can do to solve commuting.
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