The French Ministry of Ecology and Sustainable Energy Development has launched a trial scheme where commuters are paid to cycle to work. For six months, 20 companies with about 10,000 employees between them will offer tax-free payments of €0.25 per kilometre for employees to commute to and from work by bicycle, while data is collected to see what effect the scheme has.
While this scheme has gained some attention, some countries already offer bicycle commuter benefits of one sort or another. Similar to the French scheme, employers in Belgium and the Netherlands can offer tax-free payment of €0.22, and €0.19 per kilometre of bike commuting respectively. In Germany commuters biking to work can deduct €0.30 per kilometre from their taxable income.
Other efforts are aimed at providing incentives to buy bicycles. For example, in the UK more than 10,000 companies use the cycle to work scheme that allows employees to purchase bikes using pre-tax income, thereby saving income tax and other deductions on their pay. The German federal government allows employers to offer “company-paid private bicycles” as a benefit to their employees – very much like popular company car programs in various European countries. Other programs subsidise bicycle-related expenditures in general.
In the US, cyclists can deduct a flat rate of US$20 per month from their taxable income for bicycle repair and maintenance. US employers can also provide cash incentives for employees who give up free car parking at work and choose to commute by other means. However, cash paid to non-driving employees is taxable, while the value of free parking is largely in the tax concession.
Workplace wellness programs have incorporated bike commuting as part of a more general recognition of the health benefits of regular physical activity. Some employers in the US, for example, have begun using an electronic tracking system for bike commuters, offering “wellness points” that reduce employee’s health insurance premiums. Increasingly bike-aware employers in Europe and North America also provide facilities such as showers, secure bike parking, and clothes lockers for storage.
Cars are a hard habit to kick
Despite growing interest in making bike commuting more popular, bicycle-related benefits are typically dwarfed by the benefits offered for travelling by other modes of transport, especially the car. For example, in the US free car parking is the most common commuter benefit offered – only about 5% of US commuters pay for car parking. The value of those free parking spaces at work is typically well above the US$20 a month awarded to cycle commuters.
In Germany, drivers can take advantage of the same €0.30 per kilometre commuting deduction as cyclists, plus companies offer company cars. Distances travelled by car are longer than those by bicycle, and the higher values of cars compared to bicycles mean the benefits that accrue to drivers are worth more. A forthcoming study of commuter choice of transport and benefits in the Washington DC region confirms this, finding that available benefits to promote walking, cycling and taking public transport to work were rendered ineffective where there was free parking on offer.
Besides the larger value of incentives for commuting by car, another problem with the schemes to promote alternative modes of transport is that employees are often required to choose one type of benefit and can’t claim for a combination of driving, taking public transport or cycling. For example, the new French trial scheme only allows commuters to combine cycling and public transport benefits if the two are regularly used together, for example cycling to a railway station. In the US, employees have to choose only one. A study of mobility policies in Belgium found that driving to work dominated despite incentives for alternative modes, suggesting that allowing the benefits to be combined would help cut car commutes.
Perhaps a greater attraction to people thinking of cycling is an investment in facilities at work. For example, a recent study of bike commuting in the Washington DC region found that showers and lockers as well as secure bike parking are significantly correlated with increased cycling to work. Several studies have also found that bike infrastructure, such as dedicated on-street facilities and off-street paths, effectively encourage bike commuting.
So it appears that merely paying people to cycle to work is unlikely to cause a significant shift in their commuting behaviour. For this to happen will require a package of policies, including financial incentives for cycling, disincentives for driving, and investments in infrastructure and facilities, as well as efforts to encourage cycling. The French trial is a step forward in encouraging bike commuting, but by itself it’s just not enough.