Data is in: The commute for your employees is way more expensive

The one-two punch of high gas prices and rising costs related to driving could have the average American shelling out $2,914 a year to commute to work, according to a report by OverheardOnConferenceCalls.com. It’s a noticeable 35% increase over last year’s estimated average yearly commute cost of $2,064.

The “Annual Cost of Commuting: 2022 vs. 2021” report predicts that workers who commute will spend an average of $657 this year just on gas to get to work (a 58% increase over last year). Meanwhile, the costs of insurance and maintenance are up 8% this year, which is on pace with the overall rate of inflation.

The Overheard on Conference Calls study indicated some cities have particularly been feeling the impact. Based on data from the U.S. Census, Bureau of Labor Statistics, AAA, Car and Driver, Toyota and Bankrate, here’s where the top-10 highest percentage increases are in annual commute costs from 2021 to 2022:

1. Pittsburgh, 60.1%
2. Philadelphia, 59.9%
3. Cincinnati, 59.1%
4. Phoenix, 58.1%
5. Columbus, Ohio, 58.0%
6. Allentown, PA, 56.5%
7. Cleveland, 55.9%
8. Harrisburg, PA, 55.7%
9. Scranton, PA, 53.5%, and
10. Dayton, Ohio, 51.5%.

The top five most expensive cities for commuting in 2022 by annual cost, according to the report:

1. New York City, $4,040 ($1,290 more than last year)
2. Rochester, NY, $3,984 ($1,267 higher than last year)
3. Albany, NY, $3,946 ($1,249 higher than in 2021)
4. Jacksonville, FL, $3,933 (an increase of 40% from last year), and
5. Orlando, FL, $3,922 (39% more than last year).

The increased cost of getting to work is putting stress on your employees’ bank accounts and is driving discussions among your peers and company leadership about whether they should be doing something to support their employees.

With a worker shortage and a competitive labor market, it’s an understandable first step to evaluate whether changes need to be made to your employee compensation structure. But consider that if inflation becomes a driver of pay, there should be a plan for what happens when inflation rate levels eventually go back down to where they were.

Some adjustments to your benefits offerings can be made to support commuters struggling with rising driving costs. They include:

• financial wellbeing support through your employee assistance program on topics like debt management, budgeting, tips for everyday spending and saving, etc., and
• helping them save money elsewhere through a corporate discount program.

Different commute solutions

The Wall Street Journal reported that to keep employees from jumping ship to a company that’s closer to their home – or with a better benefits package – employers are providing relief via fuel stipends, gift cards and other benefits. But don’t forget those can qualify as taxable fringe benefits.

Because working from home can lead to significant savings in commute costs, if it’s feasible, temporarily expanding work-from-home privileges and relaxing in-office work policies could be another option.

Another way to cut back on commuting is cutting back to a four-day workweek.

Employee carpooling reduces fuel consumption and congestion on the roads, while the group shares the expenses of gas and parking. And when not driving, employees can relax or even catch up on work emails. One way to encourage it is to reserve your best parking spaces for your employee carpooler groups.

Employees may be considering switching to electric vehicles. Would it be a good investment to provide electric vehicle charging points at your workplace?

Alternatives to driving

Another approach to supporting your people is encouraging them to try a commute option other than driving alone.

How would employees respond to a pre-tax payroll deduction for use toward mass transit or qualifying bicycle expenses? Or how about an employer-paid benefit that supplies employees with public transit cards? Those commuter benefit solutions look like they’re about to become a requirement in the City of Philadelphia for employers with more than 50 people. Only employees who have worked an average of 30 hours or more per week in the city for the same employer over the last year are eligible for the benefit.

In addition, most states offer transit subsidy benefits. Check your state’s Dept. of Transportation website to see what benefits are offered and how to access them.

If you’re encouraging the use of mass transit, it’s a good idea to allow your people to work flexible hours so they can commute outside the peak morning and evening rush hours, when rail fares are higher.

Many cities have invested in a public bike or electric scooter program to reduce traffic congestion and provide an alternative mode of transportation. If your employees are taking advantage of such a program to save on gas, you could arrange to have a designated parking area for them near your office.

Commute news to share

Like many things, commuting is more expensive than it was this time last year, and many workers are feeling the strain – particularly those unable to work remotely and have lower-paying jobs. However, there are some encouraging signs.

Gas prices have been slowly dropping. As of Aug. 3, 2022, the national average cost for a gallon of regular gasoline was $4.16, according to AAA’s National Average Gas Prices tracker. Two months before that, the price was $4.97.

In addition, some public transportation operators are taking measures to avoid fare hikes to coax riders back after ridership dramatically dropped during the pandemic.