Employer subsidized public transit pass: Assessing disparities in access, use, and latent demand

Abstract

In 1999, the U.S. Transportation Equity Act enabled employer subsidized public transit passes to be tax free benefits to employees and tax deductible to employers. Public transit agencies can use these to increase ridership, revenue or efficiency. Assessing disparities in access, use and willingness to use the incentive can help improve the policy’s effectiveness and help promote equitable access to its benefits.The analysis uses employed respondents from a travel survey in Atlanta, Georgia (2001–2002, n=3430) categorized based on whether they were offered a subsidized transit pass by their employer, whether they used it or not, and whether they would be likely to use the pass if it was available to them. Socio-demographic characteristics, the presence of other incentives and built environment around home and work were compared across groups, and three logistic regressions were used to estimate parameters for each of the following questions: What socio-demographic and employer location characteristics are associated with working for an employer offering subsidized transit passes? What are the factors associated with using a pass if the incentive is offered? Finally, for those who were not offered a transit pass, what factors are associated with being likely to use a transit pass?Results suggest an undersupply of employer subsidized public transit passes for lower income workers, who were however more likely to report being likely to use a subsidized pass when not receiving one. Interestingly, however, lower income individuals with access to a transit pass were less likely to use it than their wealthier counterparts. Employment in sales and services, a workplace with limited nearby destinations and low quality transit service between home and work may further exacerbate disparities in use of subsidized transit pass. Promoting transit pass programs to employers in sales and services, and other lower income jobs and coordinating transit service improvements in locations where these employers concentrate may increase subsidized transit pass program effectiveness and distributional benefits. The work also suggests that socioeconomic disparities exist not only in infrastructure development and congestion charging, but also in policies used to influence mode shifts to public transit.