It is totally legitimate for any manager to wonder why an organization should invest time and money to provide alternate commuting options to its workforce. There are several reasons but most importantly, they are always adapted to the context of an organization. With the increasing value of real estate properties, which organizations located in central business districts and urban areas are not facing issues related to the shortage and the rising cost of parking spaces? For some businesses, relocating in a suburban area where real properties can be acquired or rented at a lower cost will contribute to solve such problem. These locations may provide all required space for eventual growth in the future and no bylaws restricting the maximum number of parking spaces allowed for a development. Thus, having no restrictions to expand a parking lot is rarely the absolute solution.
In fact, a rising proportion of the workforce is struggling to find alternate modes of transportation. Reasons are countless; they do not own a car, they know they won’t be able to afford the next increase of gas prices or they definitely want to avoid traffic jams, but it can also be that they realized the high cost of solo driving. The daily cost in gas, the insurance payments, the wear of the vehicle, the related pollution, the impact on their own health, etc. As an employer, supporting the employees in their quest for changing their traveling habits may be an efficient way to attract and retain competent workers. Moreover, a structured alternative transportation strategy can be used as leverage for economic development. These three notions constitute the keystone of a real shift in any business.
The high cost of solo driving
Easy access to a free parking space provided by an employer is obviously one of the significant factors which will influence the choice made by an employee to select its commuting mode of transportation. Most of the time though, an overlooked factor is missing from the equation: the taxable benefit issue. According to the Canada Revenue Agency’s regulations, employer-provided parking can sometimes be a taxable benefit for an employee. The amount of the benefit is based on the fair market value of the parking, minus any amount the employee pays to use the space. The real estate firm Colliers International translated this high cost in concrete terms in 2012, ascertaining the average median rate for a monthly unreserved parking spot in central business districts of Canadian cities at $241.72. With $456.75 per month, Calgary is the most expensive city, followed by Montreal ($330.96) and Toronto ($316.40).
While calculating the costs of land purchase, construction, operating and maintenance fees, employers may realize that the global cost of the privilege provided to its workforce is actually a significant expense. According to the Victoria Transport Policy Institute, the annual typical parking facility financial cost can vary between $670 per space for a free land surface parking in a suburban area to $4000 in the case of an underground parking space located in a Central Business District. Reinvested in sustainable transportation, such a sum of money could be the corner stone of creative initiatives in the workplace.
Changing traveling habits
The potential incentives influencing transportation modes are as diversified as adapted to specific contexts. Financing an annual pass for public transit, building bicycle racks, providing lockers and showers, dedicating parking spaces for carpoolers, you choose! Moreover, an adequate balance between coercive and incentive measures tends to achieve better results amongst the employees who feel they have a real alternative.
Certainly enough, parking management might just be the trump card for an employer who wishes to contribute to its employees switch towards sustainable modes of transportation. Led properly, the implementation of dissuasive or a higher rate for parking use might be an effective measure to encourage such a change. However, a tangible access to alternative modes of transportation – public transit, shuttle service, carpooling, active transportation facilities – is to be provided in order to be consistent in this approach.
Even though an increase of the parking space rate rarely represents the whole cost of the space itself, involving the employee in its payment allows them to take conscience of the unsuspected cost of parking their vehicle, meanwhile enabling the employer to partly cover the operating and maintenance costs of parking. This will have a direct impact on the choice of new transportation modes provided that these new funds are concretely invested in developing the demand for alternative transportation.
Another coercive yet incentive measure lies into converting parking space. Optimizing parking lots – through carpooling, active transportation, public transit or adjusting employees’ schedule so they arrive and leave at different hours – leads to a reduction of the necessary parking space. The gained space can therefore be used in favor of the employer, the employees or, why not, both! These parking space could be rented to nearby businesses, transformed into new office space, but they can also be converted into green space, outdoor dining area, bicycle racks, community gardens… Possibilities are endless!
Overall, what are the gains at the end of the day? A well structured sustainable mobility program represents a solution for as many situations met by an employer. As it has been demonstrated, it is an answer to economical, social and environmental problems. It contributes to reducing traffic congestion, fosters urban density and improves the development of the transportation offer in the territory on which it is implanted.
So, are you ready to shift speed?
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