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The Practice of Transportation Demand Management

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Software firm aims to make commuter transit benefits more streamlined and accessible

August 9, 2019

With nearly one quarter of the U.S. workforce citing transportation challenges as a reason for leaving a job, commuter transit benefits provide businesses a lucrative opportunity to attract and retain talent, alleviate traffic congestion, and reduce their carbon footprints. Companies can provide their employees up to $265 in monthly pre-tax benefits (as of 2019), helping offset the skewed finances that can sway their transportation behavior and opening their minds to options they may not otherwise have been aware of. For each new employee that signs up for benefits, employers can save nearly $500 in annual payroll taxes.

However, this valuable resource – first introduced more than 30 years ago – is substantially underutilized today. Only 13 percent of employers even offer transit subsidies, and those that do can experience low employee enrollment due to lack of program awareness and limited flexibility, among other reasons. For example, existing programs may limit the range of sustainable transportation modes eligible for benefits (e.g. offering benefits for transit riders, but not for cyclists), or may require employees to commit to a single provider for their daily commute (e.g. if a person’s regular daily commute is by train, but rail service is disrupted, they have to pay out of pocket to ride a different transit agency’s bus).

Logo: LuumLuum, a transportation tech firm best known for its commuter benefits management software, recently announced a new virtual prepaid commuter card intended to address this issue. The virtual card will provide a single platform through which employees can expend their monthly benefit on numerous modes – including public transit, bike- and scooter-share, and ride hailing – providing them the flexibility to use the option that works best for them for every given commute.

“Employers are wide awake to the reality of how challenging travel to-and-from the workplace can be every day,” Luum President and CEO Sohier Hall said. “They want to offer support to their employees by helping make the commute experience a low stress, low cost, productive, and healthy part of the day.”

Through the card’s platform, program managers can analyze employees’ transportation behavior, allowing them to more effectively tailor benefits to specific business objectives and, if they wish, improve their company’s bottom line by reducing demand for workplace parking. Also, the virtual card’s streamlined design – companies can unify their human resources, facilities, and transportation functions using Luum’s software – can help lower administrative costs.

Luum’s virtual commuter card program is currently accepting early access requests from U.S. employers.

 
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