Framework for Carpool/Public Transportation Incentive

By Christian Mullins

This is a follow up post that provides the framework for a carpool or public transportation incentive for employees. It is by no means a final product, rather, the framework provided can be modified to fit your needs (and procedural writing style).

Purpose: To encourage environmental awareness through public transportation and ride sharing.

Subsidy: Employee choice of

a. Cash/Gas Card
b. Bus/Subway/Rail Pass

Determine the Cash/Gas Card Subsidy:

The incentive can be determined using the following formula:

Shared Miles (round trip) / 2 / 22 (mpg) * Price of Gasoline

(Note: This formula assumes that there are only two passengers in a vehicle. Additional passengers would require a revised formula to account for varying shared miles and additional gasoline saved. If you’d like a customized formula to suit your situation, email me and I’ll be happy to provide one.)

Shared Miles indicates the number of actual carpool miles.

‘2’ is the number of passengers carpooling (See note)

22mpg is the average that all US passenger cars achieved in 2007, according to the U.S. Government.

Price of Gasoline should reflect costs on either the first or last day of the month.

Using this example, two employees carpooling 40 miles (20 miles each way) for 22 business days at $3.25/gallon would each be subsidized $65 for the month.

Carpool log sheet:

Each employee completes a monthly log sheet containing the number of shared miles traveled and the number of passengers on that trip. The employee would submit the sheet at the end of the month; management would calculate the subsidy and disburse the cash/gas card.

Again, this is just an example and can be modified to suit your credit union’s needs. For example, it may be prudent to cap the incentive at $50/month, or subsidize half of the gasoline costs (cut the price of gas number in half).

One last note.  Other factors, such as taxation of disbursements, may be relevant, so be sure to contact your Human Resources Department for clarification before proceeding.