Employers have a problem. It’s not critical, but it’s definitely an issue. You see it most clearly at the more labor oriented rung of the workforce. Many, especially at the low end of the income scale, have major transportation issues when it comes to getting to work. Part of this is because of the disconnect between social norms around drug use, our comprehensive and strict controlled substances laws and businesses liability limits on accepting casual weekend drug use by their employees. Ask any HR person and they will tell you a clean pee test is probably one of the hardest things that they have to deal with when recruiting staff. That’s the low end but even the middle wage / professional class has transportation issues which have a direct impact on productivity for a variety of reasons.
If someone can’t get to work, then they can’t be doing the things that they need to do to generate profit for the company. In these situations I have seen that employers become very interested in transportation solutions. I’ve especially found this to be the case in tight job markets. So this brings us to the question, if you are an employer, and you need a workforce, would it be in your best interest to provide the transportation your workforce needs as a benefit like paid time off or employer provided health care?
Precedent
There is some precedents with this when it comes to providing transportation. CEO’s and other executive suite inhabitants have generally always had extensive travel benefits. It’s not just VIP’s. Currently there are some out of the box solutions for professionals. For example some silicon valley tech giants bus employees for free from areas with reasonable costs of living into the office. You see this when the office is located in areas where only the top brass can afford convenient housing. These busses generally include WiFi for enhancing employee productivity, i.e. working, while en-route. This is a win win for employers located in areas with prohibitively high costs of living and employees who have one less major life issue to worry about.
Really business has always been involved with facilitating the transportation of its workforce in some way. The difference was in the past it was mostly about specific employees whose job requires them to be mobile. Managers, sales reps and service people have traditionally been the beneficiaries of corporate travel support. That being said, as business got more savvy about managing their mobile workforces, wherever possible business tried to put the risk of the vehicle ownership on to the individual worker through reimbursement models.
Current status
Right now employers expect a mature and responsible workforce to pay for their own transportation to and from the place of work. Even for the mature, responsible and chemically clean set it is still a bit tricky. Let’s face it, cars and trucks are expensive, very expensive. In 2017 the costs on average to purchase sits right at 35,000. There is fuel, insurance, and maintenance costs on top of the huge capital expense of the vehicle. On top of that if you think about it, most people who buy cars actually have them sitting in their driveways most of the time. This is a great idea if your a car person and think they are beautiful works of art to be appreciated every time you walk into your yard or garage. So in a classic case of underutilized resources, households are buying cars that mostly sit in driveways except during commute times. Although I love my car, it still sometimes makes me jealous when I think of people who work from home, walk to work, or live in major cities with access to enough public transportation to be able to ditch the car ownership and related payments.
For the most part today if you’re going to the same place to work most of the time you are responsible for getting there and your options are public transportation and/or owning and paying for a vehicle. If you got to go to a bunch of different places for the job, the company is responsible for getting you there. All of this is reasonable and that’s why it’s been the standard for the last hundred years. But that was the past and we live in changing times.
Future outlook
If you look at the benefits of self driving vehicles combined with the uberization of the world and the accelerating costs of vehicle ownership, it’s easy to see where transportation could easily trend towards less of an individual expense and become more of a service. I didn’t even take into account social changes that are already happening. If you think about it, even in rural areas where individual transportation needs are higher and distances traveled are much longer, really all you need is enough vehicles to handle the commute periods for the majority of workers. Electric driverless vehicles are very inexpensive to operate and don’t come with the limitations of household transportation management, i.e. they show up and they just work when you need them.
I complain greatly about rural broadband, but the fact is that it’s adoption is creeping forward ever so slowly. That means more and more people will be able to telecommute, even from the country, with all the benefits that entails for both individuals and for business. In work situations where telecommunication will be the norm, there will always be a need for an occasional co-location of workers for different skills and abilities, i.e. people will still need to get to work even if it’s not a daily occurrence. So there will be a need for transportation, but it will be less than in generations past. If there is less need for transportation, then there is less need for vehicle ownership. All this got me thinking. The question came to my mind, could employers start offering transportation as an employee benefit like employer provided health care?
There are hints we can take from the old cell phone model. When cell phones were first a thing they were very expensive. If you had one for work, then the employer’s provided them. This changed over time. As it got very inexpensive and nearly mandatory to have a smartphone just to exist in society, employers mostly just reimbursed for the cost in a manner very similar to how cars are handled today. Using that model isn’t perfect because we aren’t seeing costs shrink with transportation. If anything all the new tech will keep them prohibitively expensive especially as the world continues to trend towards a growing divide in haves and have nots. I’m not commenting on the distribution of wealth, i’m saying if people don’t need to own cars to live, they won’t buy them. If they need to get to work, they will uber a self driving car. If they don’t have money to uber the car because they have been out of work, I can see where employers will provide them. This is where I can see self driving cars becoming an employer benefit just like healthcare. If the employer wants consistency in their workforce showing up, the employer will give them an ‘uber’ account or access to one of the organization’s reserved vehicles. If the employee wants to use that account for personal reasons then there will be a small deduction or it’ll just be a benefit. Another argument as to why I can see this morphing into an employer provided benefit is that their would be a ton of low cost vehicle inventory in the self driving fleet in non-commute times. Employers love benefits that leverage excess or underutilized resources.
In this model the employer doesn’t have as much risk exposure, something else they love. They pay a monthly transportation fee for only as long as the employee is on the books. Since it’s an outsourced service that offers on-demand transportation, then the day the employee leaves is the day the account shuts off.
Will this ever happen?
There are a ton of things I didn’t cover in this article. I didn’t discuss privacy issues. I didn’t really go into the values of the up and coming generations as it relates to transportation. I didn’t discuss the deep seated cultural norm of car ownership. All of these are barriers to adoption of a model where employers provide transportation as a job benefit.
Really the key is to follow the money and the trends to see if this could actually happen. Self driving vehicles allowing for increased productivity by working while being transported is definitely a win for the employer. Eliminating the liabilities and associated insurance costs with human drivers and the lower cost of self-driving cars is also a win for pretty much everyone in the transportation chain excepting of course people who make their living by driving a vehicle. Reducing losses related to missed time is also a win for both employer and employee. Having a major employee benefit that stops the second the employee walks out the door their last time is also a major win at least for the employer. If the numbers from all these factors all add up to significantly increased profit, then this one is absolutely going to happen.
Admittedly this commentary is really just a little navel gazing. Ironically, if this was the future, and I’m in a self driving car that’s paid for by my employer, I can gaze all I want and don’t have to worry about getting in an accident or being late to work. I guess that’s just one more reason why your next job’s benefit sheet may include ‘transportation’ next to ‘healthcare’ and ‘401K’.
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-Mike.
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