Cycling Allowance Scheme

innovation photo
OT2.14
Cycling Allowance Scheme

Lofgren K. (2014). France is Paying Commuters to Bike to Work! [online]. Available at: http://inhabitat.com/france-is-paying-commuters-to-bike-to-work/

Hamre, A. and Buehler, R. (2013). Commuter benefits to promote cycling. Presentation at the International Bicycle Urbanism Symposium, June 19-22, Washington D.C.

Hodgson, H. & Pearce, P. (2014). Incentives for smart commuting – working within tax constraints. Paper presented at Department of Transport, TravelSmart Workplace Forum, Perth.

Jaffe, E. (2015). The problem with paying people to bike to work [online]. Available at: www.citylab.com/commute/2015/03/the-problemwith-paying-people-to-bike-to-work/388099/.

Oram, R. (2008). Tax-free employer-provided benefits for public transport: background, history and 2008 status. Paper presented at Association for European Transport Conference, Noordwijkerhout.

Pearce, P. & Hodgson, H. (2015). Promoting smart travel through tax policy. The Tax Specialist, 19, 2-8.

When designing a similar program for motivating people to commute to/from work by Public Transport, 2 main problems that were identified in the bicycle schemes’ applications should be taken into account:

  • The existence of free or cheap parking in the proximity of work spaces could serve as a disincentive in using Public Transport, as people tend to choose the most convenient option to them, which is their private car. Therefore, such schemes should be accompanied with eliminating parking spaces or the application of strict parking management measures in order to be drastically effective.
  • According to cognitive scientists, commuting habits are usually fixed and automatic, but there are moments in life when they become vulnerable, e.g. when one changes job environment; thus such interventions could have a wider impact if they address these time periods, addressing them as “windows of opportunity”.

Regarding the implementation of a scheme relevant to cycling allowance scheme to Public Transport, the recommendations of implementation are in line with the aforementioned implementation for design; the same two issues should be taken into account.

Cycling allowance scheme is a type of innovation that provides financial incentives in order to motivate people to cycle to work. It’s part of an increasingly popular scheme for commuters across Europe. Those who chose to commute to work by bicycle, are being rewarded with a reimbursement for every kilometer they cycle (usually around 0,20-0,25 €/km, tax-free).

French launched such an initiative in 2014, in the form of a trial scheme; for a six-months period, 20 companies with about 10,000 employees offered tax-free payments of 0,25€/km for employees to commute to and from work by bicycle. Although the results of this trial period have not been ideal, showing that 419 people agreed to cycle to work while the number of employees eligible to participate was 8,200, the innovation did attract more users to cycling and it might be able to attract more in the future. While 19% of the new riders switched from driving, most of those had been part of carpools, leaving the true mode shift away from cars closer to 5%. Other countries such as Belgium, the Netherlands, Germany, Denmark and Britain offer bike – to – work programs as well.

Behind the idea of this innovation is a straightforward financial incentive scheme aimed to decrease environmental pollution and car reliance. Using financial schemes to achieve a direct change in transport behavior is not new. Financial incentives are widely known to be efficient in many cases and these schemes are definitely noteworthy. A similar scheme could be devised for the use of Public Transport, achieving similar goals to the use of bikes.

3.5
  • Finance and business models
  • Marketing and promotion, customer care
  • Societal involvement, new entrepreneurship

General concept
Any
Any
Attracting more customers
  • Adaptiveness to evolving markets and customer needs
  • Improving customer orientation
  • Increase promotion

Build
  • Corporate social responsibility
  • Environmental degradation
  • Individual empowerment
  • Sustainable lifestyle

OB1.22

The cycling allowance scheme is a promising innovation that has just started to show positive results to the target community. It has shown some positive results in attracting more users but it is still early to assess its full potential. The transferability of this scheme to the Public Transport sector is quite high but it is subject to whether the costs can be bared by employers and whether this specific financial incentive will work for different target groups. The cycling allowance schemes’ experience has shown that merely paying people to cycle to work is unlikely to cause a significant shift in their commuting behavior. The French trial is a step forward in encouraging bike commuting, but by itself it’s just not enough. In order to achieve this a package of policies is required, including disincentives for driving, and investments in infrastructure and facilities.

Medium (4 to 8 months)
Medium (KEuro)
Medium (between 5 and 50 KEuro)
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