#Transportation News

How Commuter Benefits Can Help With Congestion Pricing

May 28, 2019

Commuting in your car in rush-hour traffic may just be getting more expensive depending on where you live.

Some cities are looking to congestion pricing to help ease the suffocating traffic in metro areas during prime commuting and business hours.

What is congestion pricing?

Congestion pricing is a system where drivers are charged an extra fee to travel on certain roadways and central business districts during certain hours, generally during peak service.

The pricing system is based on economic theory that by raising prices, it will help reduce demand. Congestion pricing has its roots in Europe, where some cities have implemented a strategy to reduce traffic.

The congestion pricing plan in New York

In the United States, New York City is set to implement congestion fees, and Boston and San Francisco are among other metro areas discussing it to varying degrees.

New York’s regulations will place a tax on vehicles entering Manhattan south of 60th street starting in 2021. The actual framework of the rules, including charges, have not been decided.

Despite the limited information released about the plan in NYC so far, it is expected to have a significant impact on commuters, particularly those who travel from New Jersey. It is anticipated more commuters will turn to public transit to get to and from work.

Commuter Benefits: the alternative for your daily commute

If more people choose to ride public transit, commuter benefits can help people more than ever. With commuter benefits, commuters will save money instead of having to spend more to get to work.

Commuter benefits allow commuters to save up to 40 percent in commuting costs each month. The money can be spent on subways, buses, ferries, rideshares (Uber Lyft), among other ways to get to work. The maximum a commuter can set side is $270 per month, and the money saved is not taxed.

Since employees are saving the money, payroll taxes are reduced for the employer. And the savings ramp up based on each employee who takes advantage of the plan.

How companies can save with Commuter Benefits

For example, a company can save $41 per month per employee. If you had 50 employees take advantage of commuter benefits every month for 12 months, you could save as much as $24,000. If you build your program to 75 employees, that’s $36,000 in annual savings.

If you live in New York City, the price the commute could be significantly changing soon. And if you are in another major city, congestion pricing appears to be one way leaders are looking to reduce congestion and help out the environment.

A great way to lessen the impact and save money is by signing up or offering commuter benefits. If you’d like more information about this benefit, download the 101 Guide below:

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