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Commuters Don't Stop Driving to Work Unless You Take Away Free Parking

Offering equal benefits to transit riders has little-to-no effect on travel choices.

Paul Sableman / Flickr

Congress recently reestablished parity for commuter tax benefits, granting people who take transit into work as well as those who drive in and park at the office the same $255 a month in 2016. With that basic fairness intact, the question becomes whether or not the rule will change rush-hour travel choices in any substantive way. Given the bump in transit benefits, you might reasonably expect fewer employees to drive in alone, but the evidence suggests you’d be wrong.

Fairness has never been the only goal of transit benefits. When Congress codified “transportation fringe benefits” in the early 1990s, transit users got their token share not just for equity’s sake but with the idea that such tax breaks would help balance out city commuting patterns. If that hope wasn’t explicit in the laws, it was embedded in their interpretation; here’s the Congressional Research Service’s assessment of such benefits to the Senate, in 2010:

Motivating commuters in highly urbanized areas to use mass transportation can reduce commuting costs generally. If workers commute in ways that reduce traffic congestion, all commuters in an area may enjoy spillover benefits such as lower transportation costs, shorter waiting times in traffic, and improved air quality.

What policymakers didn’t quite understand then, and still don’t now, is the power of the free parking spot to overwhelm transit benefits of any size. TransitCenter recently analyzed the impact of commuter benefits on travel choices in five major cities: D.C., Miami, Seattle, San Francisco, and New York. The analysis found that, relative to a world with no benefits at all, the “net effect of the parking and transit benefits together was more driving.”

So for all its fairness, benefits parity distorts the natural order of commuting. Not only did TransitCenter find a rise in car commuting across all five cities in 2014, when parking got a larger break than transit ($250 to $130), but it also expected a rise across the board in 2016, when both modes get $255. The only scenario that resulted in fewer people driving to work was when transit benefits remained at $255 a month and parking benefits were eliminated:

Via TransitCenter

Note that in Miami and Seattle, car commuting didn’t change at all from 2014 to 2016. That’s because peak monthly transit costs were already below the old benefit of $130—something that’s no doubt true of many if not most U.S. cities, further limiting the new law’s impact on travel choice.

The work of Andrea Hamre at Virginia Tech has reached similar conclusions. In research from 2014, focusing on Washington, D.C., she and Ralph Buehler found that parking and transit benefits together led to an increased probability of driving to work, relative to a world with no benefits. Hamre recently expanded that study to five cities (Baltimore, Philadelphia, Newark, and New York, as well as D.C.)—and discovered that the same patterns held true.

Using regional travel surveys involving nearly 19,000 total commuters, Hamre predicted mode probabilities based on various commuter benefits scenarios. When no subsidies are offered, 62.3 percent of people drive to work, as per the model. But when both parking and transit subsidies are offered, slightly more people take their car—63.8 percent. Slightly more people take transit, too, but fewer people carpool or walk or ride their bike, so on net traffic would be worse.

Again the only scenario that resulted in a reduced probability of driving was when employers offered transit benefits but no free parking:


“Overall, this study lends further support to the notion that public transport subsidies seem to be rendered less effective when offered in the presence of car parking subsidies,” writes Hamre in preliminary findings presented at TRB 2016, which she will expand for her dissertation later this year.

In Newark, these insights are playing out in the real world. As part of its attempt to reduce solo car commutes, Panasonic moved downtown, eliminated parking subsidies for employees, and offered workers discounted transit passes (an even better benefit than pretax fares). The result was a huge decline in the share of people who drove into work alone, down to 36 from 88 percent, and a huge rise in those who took public transit, up to 57 from 4 percent.

The point is not merely that commuter parking benefits “subsidize traffic congestion,” as TransitCenter put it in a 2014 report. Nor that eliminating them would mean billions of dollars a year in tax revenue that could be used for other public services, billions of fewer annual vehicles miles, and likely higher salaries. It’s really to show that you can have these benefits for the individual or you can have “spillover benefits” for the city as a whole—but, for all the transit parity in the world, you can’t have both.

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