It moved downtown and charged employees market rates for parking, among other things.
Ken Jeanos has been working at Panasonic’s North American headquarters in New Jersey for about 25 years, and up until two years ago he drove into work almost every day. The car commuting habit followed him to several different homes across the state. Now and then he’d take the train to work, but the shuttle taking employees from Secaucus Junction to the office ran infrequently; if he missed the only one that got him in by 9 a.m., he had to call a coworker to pick him up at the station.
That all changed when the company moved to downtown Newark in mid-2013. Now Jeanos takes New Jersey Transit into Newark Penn Station. He bought an iPad for the trip and reads the Wall Street Journal or catches up on emails. “It really sets up a much easier transition into the work day,” says Jeanos, who’s now CIO of the North America hub. “Personally, I really didn’t think I would be a huge fan of it, because of the independence of having the car. And it’s really been wonderful.”
Jeanos is hardly alone. Since the move, Panasonic North America has seen its solo commute share plunge from 88 percent to just 36 percent, cutting average daily vehicle miles in half. Meanwhile its share of employees taking transit to work has grown from a mere 4 percent to an astonishing 57 percent, according to internal survey results shared with CityLab. That more than doubles Newark’s overall commuter transit share of 26 percent, which is itself among the best in the nation.
Thomas Marchwinski, a former NJ Transit employee who conducted the study while at the agency, can’t recall another company making such a big shift to public transportation within the state. “I never dreamed they’d get this high a share,” he says. “Within New Jersey, to get up to this level is pretty dramatic. In Newark, I don’t think anyone is anywhere close to this. It was not expected.”
So what happened?
The move to Newark alone would have gotten Panasonic some new transit commuters—the new office is so convenient that workers can access it from Newark Penn Station without even going outside. But it took a lot more than a new location to reach the point where a majority are traveling by NJ Transit rail or bus, or via the PATH train. Marchwinski points to three key factors that facilitated the swing.
Commuter benefits. Panasonic North America gave its employees a 50 percent discount on transit passes obtained through the TransitChek program, up to the legal amount the passes can be subsidized. Compared with a salary increase or pre-tax benefits, subsidized commuter fares represent a much larger annual savings for employees. “That put their money where their mouth was,” says Jeanos. “People adapted, including myself, very quickly.”
Market-rate parking. Transit benefits do little to change commute modes so long as a company offers free parking. But Panasonic put an end to that practice, too, instead charging employees market parking rates that Marchwinski says can range between $180 to $200 a month. TransitChek does cover some commuter parking costs, but only at certain park-and-ride transit stations—not downtown. “If you drove here and parked here, that’s not covered,” says Jeanos.
Employee outreach. Panasonic started preparing employees for the move two years before it took place. The company spread the word about the new commuter options, and with NJ Transit’s help even organized practice runs for potential riders. When the Newark office finally opened, commuter ambassadors were posted at stations to help employees find their way. Given research showing that workers are especially open to new commute habits when jobs relocate, Panasonic’s heavy outreach program was timed just right.
These three factors, plus the strength of Newark’s existing transit service, combined to be “almost like a perfect storm,” says Marchwinski.
A culture of free parking
Marchwinski describes the commuter program as a strong win for NJ Transit. Since many commuters are coming from counties with sufficient train car capacity, he says, the agency gets the revenue from new transit riders without the added cost of providing new service. Though New Jersey was criticized for luring Panasonic to Newark with $102 million in tax credits, Marchwinski says the commute shifts are evidence that the public also receives secondary benefits from such a move.
“This is on the positive side,” he says. “Getting more transit ridership, more transit revenue, and more use out of the transit system.”
As for why more companies don’t adopt similar programs, Marchwinski points to several possible reasons—among them, the cost of subsidizing transit programs, an IRS benefits system that favors drivers over transit riders, and the general inertia of car-friendly commuting habits like free parking. “In some companies, there’s a culture about parking,” says Marchwinski. He’d also like to see agencies do a better job targeting big companies that are about to move to transit-oriented locations.
Panasonic reached out first in this case, largely because the transit program fits with the firm’s larger push to become the greenest electronics company by 2018. Management renewed its transit subsidy commitment this spring and announced an even more ambitious goal of getting 75 percent of its employees to commute via transit. Jeanos says having a transit-friendly location has also helped with recruitment—a trend that many companies are finding, especially among younger workers.
As for his own commute change, Jeanos need only look out the window at the new office to get a reminder that he made the right decision. In one direction he sees highway traffic. In the other he sees trains moving along the tracks just fine. “It makes me feel pretty good,” he says.