Quantifying the Current and Future Impacts of the MBTA Corporate Pass
Program
by
Dianne E. Kamfonik
Bachelor of Science in Civil Engineering
Cornell University, 2010
Submitted to the department of Civil and Environmental Engineering
in partial fulfillment of the requirements for the degree of
ARCHfM
CHUSETTS
OF TECHNOLOGY
Master of Science in Transportation
JUL 08213
at the
LIBRARIES
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
June 2013
@2013 Massachusetts Institute of Technology. All rights reserved.
Author.r............................
t
f Civil and Enioninal Engineering
May 23, 2013
C ertified by ...........................................
Research Asso iate of
Certified by ............................ .
.........
......
.
ivil and
. .
.........
John P. Attanucci
vironmental Engineering
Thesis Superyisor
...............
...
....
.
v.
Frederick Salvucci
Senior Lecturer of Civil and Environmental Engineering
Thens Supervisog
Accepted by.........................................................
Heidi N. Ne
Chair, Departmental Committee for Graduate Students
E
Quantifying the Current and Future Impacts of the MBTA Corporate Pass
Program
by
Dianne E. Kamfonik
Submitted to the department of Civil and Environmental Engineering
on May 23, 2013 in partial fulfillment of the
requirements for the degree of
Master of Science in Transportation
Abstract
Many city and regional transportation authorities, including the Massachusetts Bay Transportation
Authority (MBTA) in Boston, offer a monthly pass to local employers which they can distribute to
their employees. There are many ways in which an agency, employer or individual benefit from an
employer pass program. There are financial benefits for all three parties, as well as increased
convenience for employees, better travel demand management for employers, and increased
ridership for agencies.
The MBTA Corporate Pass Program was established almost forty years ago in an attempt to
move away from inefficient fare collection methods while providing an avenue for employers to
contribute to their employees' transit commutes and increase transit ridership generally. With
these intentions in mind, this thesis aims to analyze the MBTA's employer pass program, and to
quantify its benefit to the MBTA through program penetration, additional revenue captured, and
reduced sensitivity to fare increases and seasonal fluctuations. Influencing factors such as company
location, subsidies and local city policies are also analyzed to determine the effects of employer
benefits policies on an employee's participation in the Corporate Pass Program and their transit
ridership.
The results show that the Corporate Pass Program is a very positive program for the MBTA, and
accounts for 27% of their annual revenue. The MBTA receives an estimated additional $4.4 million
in potentially foregone revenue from LinkPass Corporate pass holders annually. The program
captures additional revenue by appealing to employees with lower transit usage than the average
pass holder, many of whom do not use the aggregate ride "value" of the pass in most months and
are attracted to the program because of the pretax or employer-provided subsidies. Furthermore,
the Corporate Pass Program provides greater revenue stability month to month than other types of
monthly passes as its users are less likely to cancel its purchase for vacation months than retail
month to month users. This research also finds that certain employer characteristics, such as size,
pass subsidy, location and parking availability have clear influences on employee participation and
more subtle influences on average employee ridership.
Thesis Supervisor: John P. Attanucci
Title: Research Associate of Civil and Environmental Engineering
Thesis Supervisor: Frederick Salvucci
Title: Senior Lecturer of Civil and Environmental Engineering
Acknowledgements
John Attanucci and Fred Salvucci, thank you for your guidance and for all of the time, effort and
energy you dedicated to this research. I have learned so much from both of you.
David, your support, editing skills, and insight have been unbelievably helpful over the past two
years.
Thank you to Nigel Wilson and all of the students and professors in the MIT Transit Lab. I truly
enjoyed working with and learning from each and every one of you.
Ginny, thanks for keeping us all on track.
A warm thank you to everyone at the MBTA for encouraging our work and sharing your data,
especially Rob Creedon, Lynne O'Neill, and Josh Robin. Thanks also to Candice Brakewood for
getting us an office.
This research would not have been possible without the help of the over 500 survey responses
from employers across the Boston area. Thank you all for providing the data for this analysis, and
for your candid and helpful feedback.
Above all else, thank you to my family-Mom, Laura, & Ollie-for your unwaivering support.
Eric, I'm not sure what to say because "thank you" doesn't quite seem to cut it.
5
6
Contents
1 Introduction
1.1
B ackground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
1.2
Problem Statement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
1.3
Research Objectives and Methodology . . . . . . . . . . . . . . . . . . . . . . . .
28
1.3.1
Employer Practice Survey
28
1.3.2
Corporate Pass Holder Usage Analysis
. . . . . . . . . . . . . . . . . . .
29
1.3.3
Influences on Participation and Usage . . . . . . . . . . . . . . . . . . . .
30
1.4
2
19
. . . . . . . . . . . . . . . . . . . . . . . . . .
Organization of This Thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Literature Review
33
2.1
Commuter Benefits Overview
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
33
2.2
History of Commuter Benefits
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
35
2.3
Evaluating and Improving Commuter Benefits Programs
. . . . . . . . . . . . . .
37
2.4
History of the MBTA Corporate Pass Program . . . . . . . . . . . . . . . . . . . .
41
2.5
MBTA Fare Structure and Current Corporate Pass Structure . . . . . . . . . . . . .
43
2.5.1
MBTA Fare Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43
2.5.2
Corporate Pass Program Structure and Third-Parties
44
. . . . . . . . . . . .
2.6
The Mobility Pass Trial at MIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.7
Comparison to Other Employer Pass Programs
2.7.1
. . . . . . . . . . . . . . . . . . .
47
City 1: Washington, DC . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7
3
4
2.7.2
City 2: San Francisco, CA . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.7.3
City 3: Philadelphia, PA . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.7.4
City 4: Seattle, WA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.7.5
Lessons Learned from Employer Pass Program Comparison
. . . . . . . .
54
Investigating the Current MBTA Corporate Pass Program
57
3.1
58
Employer Practice Survey
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1.1
Location
3.1.2
Availability of Pretax Purchase of Passes
3.1.3
Subsidy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.1.4
Parking Availability and Cost
3.1.5
S ize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1
3.1.6
Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
. . . . . . . . . . . . . . . . . .
63
. . . . . . . . . . . . . . . . . . . . . . . . 68
3.2
Employee Participation Rate
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81
3.3
Employer Market Penetration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
3.3.1
Large Employers in Boston and Cambridge . . . . . . . . . . . . . . . . .
84
3.3.2
Estimate of Revenue From Non-Subscription Third-Party Benefits . . . . .
88
3.3.3
Within a Walkable Distance of Transit . . . . . . . . . . . . . . . . . . . . 89
Corporate Pass vs. Non-Corporate Pass Usage and Revenue Comparisons
93
4.1
Usage Analysis Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
4.2
LinkPass Monthly Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
4.3
Monthly Bus Pass Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
4.4
Monthly Commuter Rail Pass Usage . . . . . . . . . . . . . . . . . . . . . . . . . 106
4.5
Fare Increase Effects: Revenue and Usage Over Time . . . . . . . . . . . . . . . . 109
4.6
4.5.1
Pass Sales Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
4.5.2
Usage Over Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Summary of Corporate vs. Non-Corporate Usage and Revenue . . . . . . . . . . . 115
8
5
Effects of Employer Benefit Policies and Other Characteristics on Employee
Participation and Usage
5.1
Participation of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5.1.1
A Priori Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5.1.2
Employer Characteristics at a Glance
5.1.3
Examining the Combined Effect of Employer Characteristics on Employee
Participation
5.1.4
5.2
5.3
6
117
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Participation Results
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Average Employee Usage Levels of a Corporate Monthly Pass
. . . . . . . . . . . 141
5.2.1
A Priori Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
5.2.2
Employer Characteristics at a Glance
5.2.3
Regression Analysis
5.2.4
Average Employee Usage Results
. . . . . . . . . . . . . . . . . . . . 143
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
. . . . . . . . . . . . . . . . . . . . . . 154
Lessons Learned: Effects of Employer Characteristics on Participation and Usage . 156
Employer Feedback on the MBTA Corporate Program
159
6.1
Ordering Timeline Issues (19%)
6.2
Billing/Payment (17%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
6.3
CharlieCard Issues (15%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
6.4
Paper Ticket Issues (15%)
6.5
Service, Communication and Information (14%) . . . . . . . . . . . . . . . . . . . 168
6.6
Website (7%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
6.7
O ther (6% )
6.8
Should be Discounted (4%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
6.9
Entire Program (3%)
. . . . . . . . . . . . . . . . . . . . . . . . . . . 161
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
6.10 Conclusions on Customer Feedback
7
. . . . . . . . . . . . . . . . . . . . 119
. . . . . . . . . . . . . . . . . . . . . . . . . 173
Conclusions and Recommendations
175
9
7.1
Summary and Findings . . . . . . . . . .
175
7.2
Recommendations . . . . . . . . . . . . .
178
7.2.1
Future Marketing . . . . . . . . .
178
7.2.2
Role of Third Parties . . . . . . .
181
7.2.3
Response to Feedback
. . . . . .
184
Future Research . . . . . . . . . . . . . .
186
7.3
Appendices
189
A Example Tax Calculations
191
B Employer Practice Survey Questions
197
C July 2012 MBTA Fare Increase Details
199
D Table of U.S. Transit Agencies and Characteristics
203
E Mobility Pass Report
205
F Commuter Rail Average Usage in Days for April through November 2012
213
G Participation Regression Analysis Iterations
219
H Usage Regression Analysis Iterations
225
Bibliography
235
10
List of Figures
1.1
Basic Employer Pass Program Structure . . . . . . . . . . . . . . . . . . . . . .
1.2
Monthly Pass Sales and Corporate Monthly Pass Sales as a Percentage of Total
21
Sales Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
2.1
Transportation Benefits Caps From 1992 to 2013
. . . . . . . . . . . . . . . . . .
36
2.2
Commuter Check@ Company Savings Calculator . . . . . . . . . . . . . . . . . .
39
2.3
Diagram of the Current Corporate Pass Program Distribution System . . . . . . . . 45
3.1
Representativeness of Sample
3.2
Distance to CBD
. . . . . . . . . . . . . . . . . . . . . . . .
59
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
3.3
Corporate Pass Program Employer Distance to Closest Subway Station . . .
62
3.4
Corporate Pass Program Employer Distance to Closest Subway Station (only those
w ithin 0.5 miles)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
62
3.5
Distribution of Subsidies by Employer . . . . . . . . . . . . . . . . . . . . . . . . 65
3.6
Distribution of Subsidies by Employee . . . . . . . . . . . . . . . . . . . . . . . . 65
3.7
Employer Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.8
Employer Parking Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.9
Employee Parking Access
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
3.10 Parking Subsidies by Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
3.11 Parking Subsidies by Employee
. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
3.12 Company Size for All Direct Corporate Pass Program Employers . . . . . . . . . . 73
11
3.13 Company Size for Direct Corporate Pass Program Employers
Employees or Fewer
with
1000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
3.14 Distribution of Company Size for All Direct Corporate Pass Program Employers as
a Percentage of the Number of All Employers in Suffolk, Norfolk and Middlesex
Counties of the Same Size
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
74
3.15 Corporate Pass Program Employers by Industry . . . . . . . . . . . . . . . . . . .
77
3.16 Employees with Corporate Pass Program Access by Industry . . . . . . . . . . . .
78
3.17 Distribution of Industry Classification for All Corporate Pass Program Employers
as a Percentage of All Employers in Suffolk, Norfolk and Middlesex Counties
W ithin the Same Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.18 Distribution of Industry Classification for All Employees with Access to the
Corporate Pass Program as a Percentage of All Employees in Suffolk, Norfolk
and Middlesex Counties Within the Same Industry
. . . . . . . . . . . . . . . . .
80
3.19 Employee Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82
3.20 Participation Rates by Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
3.21 Employee Participation by Employer Size . . . . . . . . . . . . . . . . . . . . . . 83
3.22 Benefits Offered to the Employees of the Top 25 Largest Employers in Cambridge
and B oston
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85
3.23 Estimated Benefits Offered to the Employees of the Top 25 Largest Employers in
Cambridge and Boston (50 companies combined) . . . . . . . . . . . . . . . . . .
87
3.24 Estimated Penetration of Transit Benefits for Employees of Top 25 Largest
Employers in Cambridge and Boston . . . . . . . . . . . . . . . . . . . . . . . . .
88
3.25 Estimated Penetration of Transit Benefits for All Employees within 0.5 Miles of a
Rapid Transit Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91
3.26 Dot Density of Active CharlieCards and All Employers within 0.5 Miles of a Rapid
Transit Station . . . . .
4.1
- . . . ... .
. . . . . . . . . . . . . . . . . . . . . . . .
92
July 2012 and November 2012 Unlinked Trips for LinkPass Users . . . . . . . . . 98
12
4.2
Comparison of April and May 2012 Usage vs. Revenue for Corporate and NonCorporate LinkPasses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
4.3
Local Bus Pass July 2012 and November 2012 Unlinked Trips . . . . . . . . . . . 104
4.4
Comparison of April and May 2012 Usage vs. Revenue for Corporate and NonCorporate Local Bus Passes . . . . . . . .
. . . . . . . . . . . . 105
4.5
Commuter Rail Pass Usage on Bus and Subway Services . . . . . . . . . . . . . . 107
4.6
Comparison of Commuter Rail Pass Usage on Buses and Subways . . . . . . . . . 109
4.7
2012 LinkPass Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.8
2012 Monthly Bus Pass Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . . .111
4.9
2012 Commuter Rail Pass Unit Sales . . . . . . . . . . . . . . . . . . . . . . . . .111
4.10 LinkPass Usage Before and After Fare Increase . . . . . . . . . . . . . . . . . . . 113
4.11 Bus Pass Usage Before and After Fare Increase
. . . . . . . . . . . . . . . . . . . 113
5.1
Employee Participation Rate by Distance to CBD . . . . . . . . . . . . . . . . . . 120
5.2
Participation Rate within 0.25 Miles of Bus or Subway
5.3
Participation Rate within 0.5 Miles of Bus or Subway . . . . . . . . . . . . . . . . 122
5.4
Participation Rate within 0.25 and 0.5 Miles of Subway Station . . . . . . . . . . . 123
5.5
Participation Rate by Location in Cambridge or Elsewhere
5.6
Participation Rate by Location in Cambridge or Elsewhere (1-6 Miles from CBD) . 125
5.7
Participation Rate by Pretax Availability . . . . . . . . . . . . . . . . . . . . . . . 126
5.8
Participation Rate by Subsidy Amount . . . . . . . . . . . . . . . . . . . . . . . . 128
5.9
Participation Rate by Existence of Employer Subsidy . . . . . . . . . . . . . . . . 128
. . . . . . . . . . . . . . . 121
. . . . . . . . . . . . . 124
5.10 Participation Rate by Parking Availability . . . . . . . . . . . . . . . . . . . . . . 130
5.11 Participation Rate by Parking Availability (Yes or No) . . . . . . . . . . . . . . . . 130
5.12 Participation Rate by Parking Subsidy . . . . . . . . . . . . . . . . . . . . . . . . 131
5.13 Participation Rate by 9 Company Size Categories . . . . . . . . . . . . . . . . . . 132
5.14 Participation Rate by 4 Company Size Categories . . . . . . . . . . . . . . . . . . 133
13
5.15 Participation Rate by 4 Company Size Categories Among Companies with No On-
Site Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
5.16 Participation Rate by 4 Company Size Categories Among Companies with On-Site
P arking
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 134
5.17 Participation Rate by 4 Company Size Categories Among Companies within 0.5
M iles of a Subway Station
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
5.18 Participation Rate by 4 Company Size Categories Among Companies Between 0.5
and 1 M iles of CBD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
5.19 Average Usage by Distance to CBD
. . . . . . . . . . . . . . . . . . . . . . . . . 144
5.20 Average Usage by Distance to Subway . . . . . . . . . . . . . . . . . . . . . . . . 145
5.21 Average Usage by Location in Cambridge or Elsewhere . . . . . . . . . . . . . . . 146
5.22 Average Usage by Pretax Availability
5.23 Average Usage by Subsidy Amount
. . . . . . . . . . . . . . . . . . . . . . . . 147
. . . . . . . . . . . . . . . . . . . . . . . . . 148
5.24 Average Usage by Existence of an Employer Subsidy . . . . . . . . . . . . . . . . 149
5.25 Average Usage by On-Site Parking Availability . . . . . . . . . . . . . . . . . . . 150
5.26 Average Usage by Parking Subsidy . . . . . . . . . . . . . . . . . . . . . . . . . . 151
5.27 Average Usage by Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
6.1
Employer Feedback by Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
6.2
Screenshot of "Payment Meth ods" Page of Corporate Pass Website . . . . . . . . . 165
7.1
Employee Tax Savings Calculator
F. I
Comparison of Commuter Rail Pass Usage on Bus and Subways - April 2012
F.2
Comparison of Commuter Rail Pass Usage on Bus and Subways - May 2012 . . . . 214
F.3
Comparison of Commuter Rail Pass Usage on Bus and Subways - June 2012 . . . . 214
F4
Comparison of Commuter Rail Pass Usage on Bus and Subways - July 2012 . . . . 215
F.5
Comparison of Commuter Rail Pass Usage on Bus and Subways - August 2012 . . 215
F.6
Comparison of Commuter Rail Pass Usage on Bus and Subways - September 2012
. . . . . . . . . . . . .
14
. . . . . 181
. . . 213
216
F.7
Comparison of Commuter Rail Pass Usage on Bus and Subways - October 2012 . . 216
F.8
Comparison of Commuter Rail Pass Usage on Bus and Subways - November 2012
15
217
List of Tables
1.1
Passenger Fares by Mode, Report Year 2010 (Dickens, Neff, & Grisby, 2012)
2.1
MBTA Single-Fare and Pass Pricing . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.2
Third Party Commuter Benefits Providers Available to San Francisco Employers
50
2.3
Comparison of ORCA Commuter Pass Options
. . . . . . . . . . . . . . . . . . .
53
3.1
Employer Proximity to Subway Station
. . . . . . . . . . . . . . . . . . . . . . .
61
3.2
Subsidy Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.3
Employer Size Statistics
3.4
Company Size Shown by Parking Availability . . . . . . . . . . . . . . . . . . . . 75
4.1
Corporate LinkPass Unlinked Trips vs. Non-Corporate LinkPass Unlinked Trips -
. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July Through November 2012
20
72
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.2
Usage Comparison of Direct Customers to Third-Party Subscription Customers
.
102
4.3
Monthly Bus Pass Usage Comparison of Unlinked Trips: April-November 2012
.
103
4.4
Commuter Rail Pass Usage in the Subway and Bus System . . . . . . . . . . . . . 106
4.5
Average Monthly Total LinkPass Trips Before and After the July 2012 Fare Increase 114
4.6
Average Monthly Total Bus Pass Trips Before and After the July 2012 Fare Increase 114
5.1
Participation Regression Results - Excluding Parking Subsidy
5.2
Participation Regression Results - Including Parking Subsidy . . . . . . . . . . . . 139
5.3
Usage Regressions Results - No Parking Subsidy
5.4
Usage Regressions Results - Including Parking Subsidy . . . . . . . . . . . . . . . 153
16
. . . . . . . . . . . 138
. . . . . . . . . . . . . . . . . . 152
D. 1
15 Urbanized Areas with the Most Transit Travel, Ranked by Unlinked Passenger
Trips, Passenger Miles, and Population, Report Year 2010
17
. . . . . . . . . . . . . 204
18
Chapter 1
Introduction
1.1
Background
Transit agencies around the world offer a wide variety of payment options, often including cash
single and multi ride tickets, period passes, and stored value cards, often with discounts available to
certain people such as seniors, students and monthly customers. In terms of unlimited use period
passes, there are daily passes, weekly passes, monthly passes, and even annual passes. A few
agencies even offer guaranteed best pricing, meaning passengers "pay as they go" only until they
reach a pre-determined cap for a set period. In the United States, fares are collected in a wide
variety of different ways, some of which are shown in Table 1.1 below (Dickens, Neff, & Grisby,
2012).
The choice to offer an unlimited pass, and the pricing thereof, is an important component of
a transit agency's fare structure. An unlimited pass is beneficial to customers in the sense that it
can be cost-effective if their single-ride fares would sum to greater than the price of the pass. A
pass also has the additional benefit of providing transit to customers at zero marginal cost once it
is purchased. This provides greater accessibility to customers as they may choose to take more
transit trips simply because it is free for them to do so.
In general, employer pass programs are a method through which transit agencies can sell transit
19
Bus
Commuter Demand
Rail
Re-
Heavy
Rail
Light
Rail
Trolleybus
Total
sponse
Passenger Fares,
Millions of
4,997.3
2,248.7
485.7
3,965.7
412.2
80.1
(b)12,556.1
$0.95
$4.84
$2.56
$1.12
$0.90
$0.81
$1.23
$7.00
$25.00
$6.25
$2.25
$2.50
$2.25
$25.00
$1.53
$6.66
$2.31
$1.95
$1.87
$1.50
$1.97
$1.50
$3.75
$2.50
$2.00
$2.00
$1.88
$1.75
$0.00
$2.25
$0.00
$1.40
$1.00
$0.00
$0.00
6.0%
21.4%
NA
7.7%
14.3%
25.0%
6.3%
28.1%
0.0%
NA
46.2%
33.3%
100.0%
30.1%
23.9%
57.1%
NA
30.8%
23.8%
0.0%
19.9%
21.6%
21.4%
NA
61.5%
33.3%
25.0%
24.6%
55.3%
17.6%
NA
64.3%
41.7%
50.0%
49.4%
Dollars
Average Revenue
per Unlinked
Trip
Highest Adult
Base Cash Fare
(a)
Average Adult
Base Cash Fare
(a)
Median Adult
Base Cash Fare
(a)
Lowest Adult
Base Cash Fare
(a)
Systems with
Peak Period
Surcharges (a)
Systems with
Transfer
Surcharges (a)
Systems with
Distance/Zone
Surcharges (a)
Systems with
Smart Cards (a)
Systems with
Magnetic Cards
(a)
a) Based on a sample of systems from APTA 2011 Public TransportationFareDatabase
b) Includes fare revenues for other modes not listed, $374.1 million
Table 1.1: Passenger Fares by Mode, Report Year 2010 (Dickens, Neff, & Grisby, 2012)
20
passes in bulk to local employers to be distributed to their employees. In their most basic form,
a company contacts the agency, orders a certain number of passes, and pays for them in advance
with money that has been collected from the employees that requested the passes. Most often
this is done through payroll deduction, which allows both the employer and the employee to save
money on their taxes (see Section 2.1 and Appendix A for more details). The passes are sent to
the employer's office and are distributed, or in the case of a reloadable smart fare card, the card is
automatically updated. This basic relationship is shown in Figure 1.1 below. In some cases, the
employer does not collect the cost of the pass from the employees or they only collect a fraction
of the cost as a benefit to the employee. The transit agency and-employers may also use a third
party who administers the process and takes care of distributing the passes to employees, or offers
a transit debit card or voucher instead. Employees, employers, transit agencies and society all have
something to gain from the effective implementation of employer pass programs.
Place order, pay in advance
E
Mail or auto-renew passes
oyer
Passes distributed
Paid
through
payroll
deduction
in advance
<:~ylee
Figure 1.1: Basic Employer Pass Program Structure
If an employee can purchase a pass using pretax payroll deductions and/or for a reduced
(subsidized) price from his employer, the employee is receiving a heavily discounted price. He
also has the additional benefit of receiving his pass through a subscription service; he signs up
once at the beginning of employment or is automatically "opted-in", and then he receives his pass
21
each month until he cancels.
The employer also benefits from this arrangement, as there are also corporate tax incentives
for providing a deduction in its employees' taxable income. The employer can also benefit from
providing a subsidy, as the subsidized amount is not subject to payroll taxes, similar to healthcare
(see Appendix A for sample tax calculations), so this may be an effective alternative to offering
an employee the same amount of money as a salary increase (ICF Consulting, et al, 2003).
Additionally, promoting transit through a pass program can allow employers to manage limited
parking by reducing demand. There are three instances in particular where this is an enormous
benefit for employers. First, this allows new companies to avoid building large parking structures
or parking lots, which can be prohibitively expensive both in terms of construction and in terms of
paying for and navigating zoning laws and parking ordinances. Second, employer pass programs
allow growing companies that are quickly running out of parking spaces an inexpensive and easy
way of convincing employees to use alternative transportation, and can save them the cost of
acquiring more parking spaces. Finally, for large, well-established companies that have ample
parking, pass programs can divert employees from driving and parking, and thus these spaces
will remain open for customers, employees at nearby businesses, and visitors to park, possibly
even providing some additional revenue. Employer pass programs also allow an employer to send
a strong message that they are dedicated to helping their employees get to work and that they
care about supporting transit, decreasing traffic and/or parking, and increasing the livability of the
communities where they are located. In some cases, employers may also participate in a pretax
transit program to comply with city or state regulations.
Transit agencies can also benefit greatly from employer pass programs. Even if an employer
does not offer any additional subsidies, the convenience of the subscription service alone may be
enough to encourage employees to pay full price for a pass each month without using the service
enough to justify the full price. For example, if an employee must make a separate decision to
purchase a pass each month at full price, presumably each month she will consider how often she
plans to take transit. If her estimated cost of paying each day will be less than the price of a monthly
22
pass then she may not buy the pass. However, if she is enrolled in a subscription service she will
generally not make this decision month by month. There may be some months where she is on
vacation, working from home, or for some other reason she does not use transit as often as she does
in normal months. For such employees, the value of not having to remember to purchase a pass
each month and the convenience of not paying their cash fare day-to-day in the "off" months is
worth the extra price of the subscription in these months. Additionally, the pass program produces
savings by lowering the costs to the transit agency associated with cash handling and individual
fare collection.
For the employers that offer passes pretax, or those who offer a subsidy or a transit cash-out, the
benefit to transit agencies may be even greater. The pretax savings alone are a significant discount
to employees. Appendix A shows that the employee could save as much as 40% of the value of the
pass by receiving it pretax. A company can then choose to increase that discount to the employee
by offering a subsidy. For example, if a company subsidizes passes by 50%, instead of paying
the full $70 per month for a pass, an employee could purchase a pass for $35 (and if the pass is
purchased pretax, it would actually be less than $35 in out-of-pocket money). At typical transit
fares, this will pay for itself in less than 9 days, which may be worthwhile if the employee uses
transit occasionally, or on nights or weekends. In this case, the transit agency will receive the full
$70 pass price, even if the employee is not using the full amount. This subscription service may
also provide greater insulation from fare increases since the increase will not be as burdensome
for the employee if it is paid for with pretax dollars. Additionally, employees may come to enjoy
the benefit of getting a transit pass each month and will find it burdensome or even may forget to
cancel the subscription while they continue to have the cost deducted from their paychecks.
The Massachusetts Bay Transportation Authority (MBTA) in the Boston region offers several
different avenues through which customers can pay for rides. There are single-ride fares, which are
a flat rate regardless of the time, origin or destination, and are higher for those who pay cash-onboard or with a paper magnetic-stripe CharlieTicket (as opposed to a plastic "smartcard" called a
CharlieCard). There are monthly passes, student semester passes, all day and weekly unlimited
23
passes, and a reduced price pass for seniors and persons with disabilities.
The complete list
of pricing for each fare type is shown in Appendix C for both before and after the July 2012
fare increase. All of these passes provide many options for transit riders throughout the Boston
metropolitan area, and riders can choose from a variety of options based on their own personal
transit usage (Massachusetts Bay Transportation Authority, 2012a).
MBTA customers also have a wide variety of choices when it comes to paying for a pass
or single-ride fare. There are MBTA fare vending machines located at MBTA stations through
which customers can buy single-ride fares or passes. Some will purchase a single ride on a ticket,
and others who have reloadable plastic smart CharlieCards can simply add value to these cards
which are deducted each time a customer taps onto a bus or into a subway station. There is
also a CharlieCard store at Downtown Crossing station, and customers can purchase or reload
their CharlieCards on the MBTA's website. Bus passengers can reload value onto their cards or
purchase a single pass with cash onboard using the bus fare box, and commuter rail passengers can
buy single-rides or passes from their conductors or at the ticket window of commuter rail stations.
Recently, commuter rail passes and single-ride commuter rail fares became available for purchase
on customers' mobile phones, and they can also pay for parking at a commuter rail station through
their phone. Some local convenience stores even carry MBTA tickets and passes (Massachusetts
Bay Transportation Authority, 2012a).
The MBTA's Corporate Pass Program is a subset of the MBTA's monthly pass option. The
program was first established in 1974 as a means to reduce inefficient fare payment methods,
increase transit usage, and allow an avenue for employers to contribute to employee's transit
commutes. LinkPasses (unlimited monthly passes for all subway and local bus trips), monthly
Bus Passes (both local and express), commuter rail and commuter ferry monthly passes are all
available through the MBTA's Corporate Pass Program. Commuter rail 10-ride tickets, can also be
purchased through this program, though these tickets only account for 2% of the Corporate Pass
Program sales revenue. The payment options of the direct Corporate Pass Program are somewhat
limited since this program requires employees to order passes through their employer. On average
24
in 2012, the Corporate Pass Program sales brought in $11.5 million per month in fare revenue to
the MBTA (Massachusetts Bay Transportation Authority, 2012b).
Monthly passes are a large source of the MBTA's total fare revenue, with 47% of sales revenue
coming from monthly passes. Within this group of monthly passes, 57% of sales are through the
Corporate Pass Program (or 27% of total sales revenue). This relationship is depicted in Figure
1.2 (Massachusetts Bay Transportation Authority, 2012b). However, this 27% is not indicative of
all employees that are purchasing fares pretax through their employers. There are other options
offered by third party benefits providers (explained further in Section 2.1), including flex spending
accounts, vouchers and transportation debit cards. A rough estimate of the penetration of these
indirect programs is performed in Chapter 3, and by assuming the same distribution of pass
types and participation rates among these employers, the total revenue from these other options
is estimated to be between 3% and 8% of the MBTA's total revenue, or between $1.27 million and
$3.24 million per month (see Section 3.3.2). When added to the 27% of revenue obtained from
the subscription Corporate Pass Program, the total revenue from employer pretax programs can be
estimated at approximately 30-35% of the MBTA's revenue or between $12.8 million and $14.8
million per month. To clarify, the 27% of direct Corporate Pass Program revenue does include those
who purchase subscription monthly passes through third party providers, but does not include any
passes purchased through vouchers or debit cards, or reimbursed through flex-spending accounts.
The overall breakdown of MBTA revenue is shown in Figure 1.2.
25
12-17%
F
Estimated
Third-Party "Other"
Corporate Revenue
3-8%
(d)
7
(a) Single fares, weekly and daily passes; includes those purchased through third-party vouchers,
flex-spending accounts or debit cards.
(b) Includes third-party monthly subscription passes.
(c) Includes reduced fare senior passes, student semester passes, and third-party vouchers, flexspending accounts or debit cards.
(d) Estimated here as a range based on analysis in Section 3.3.2.
Figure 1.2: Monthly Pass Sales and Corporate Monthly Pass Sales as a Percentage of Total Sales
Revenue
In light of all of the potential benefits associated with an employer pass program, this study
aims to investigate the current MBTA Corporate Pass Program to better assess and quantify those
benefits. Up until this point, the MBTA has had limited knowledge of how individual employers
were implementing the Corporate Pass Program. It is not only useful for the MBTA to gain an
understanding of how the pass is being priced by different employers, but it is also useful to see
which employers are participating, how participation varies across employers, and how the use
of transit varies among employees of different companies. Additionally, the recent 23% acrossthe-board fare increase provides an opportunity to study the impacts of a fare increase on pass
26
purchases-both Corporate and Non-Corporate-and the comparative change in usage of these
passes. All of this information can help the MBTA to better understand how beneficial the program
is, how it ranks compared to other programs in the country, and how to further adapt the program
in a way that will increase revenue and transit usage, along with customer satisfaction.
1.2
Problem Statement
The MBTA has not recently quantified the benefits of their Corporate Pass Program. The first
step to quantifying the value of the program is to gather more information from the companies
that participate in the program. It is crucial to learn which companies participate, where they
are located, how many of their employees participate, if they offer the pass pretax, if they offer
a subsidy, and if they have similar policies for parking. It is also important to gather feedback
from these employers to aid in the assessment of the program. The next piece of the problem
is to determine not only how many people are participating in the program, but also how often
they are using the transit system. The MBTA cannot know how much additional revenue they
are getting from this program if they do not see how the usage of Corporate Pass Program riders
compares to Non-Corporate pass holders. Intuitively, the average Corporate Pass holder will use
transit less often than the average Non-Corporate pass holder since the lower price of the Corporate
Pass will attract additional people to the program who use transit less often. An investigation is
necessary to see if this hypothesis is actually correct and, if so, to what extent. The recent fare
increase also offers the opportunity to see if the Corporate Customers were less affected, as one
might hypothesize. The third piece of this problem is to determine how different characteristics
of the employer affect employer participation, employee participation, and employee transit usage.
Determining the characteristics of the most successful corporate relationships will allow the MBTA
to further shape the program or target advertising to their benefit.
27
1.3
Research Objectives and Methodology
The research methodology consists of three tasks that focus on each of the three research
objectives:
1. To gather more information about the current program and its participants.
2. To investigate the usage of Corporate pass holders as compared to Non-Corporate pass
holders.
3. To determine which factors influence employee participation and employee usage.
1.3.1
Employer Practice Survey
A survey was distributed to all of the MBTA's Corporate Pass Program employer contacts with the
intention of gathering more information about how the Corporate Pass Program is implemented
and utilized at various companies around the Boston area. The survey was conducted primarily
during the months of July 2012 and August 2012, with a second attempt sent out by Edenred-the
company that the MBTA hires to code the CharlieCards and tickets and fulfill orders-in October
2012. The survey was conducted via e-mail, and the respondents were given two response methods:
a link to an online Google Form survey, and an option to reply to the e-mail. There were a total of
564 responses, and about 72% of those responses were via the Google Form while the remaining
28% were e-mailed. The response rate was approximately 40% by company, and these responses
represented about 50% of all active CharlieCards in the Corporate Program.
The survey questions are listed in Appendix B. The responses were linked to the employer's
ID number, and the respondent's name and email were requested to facilitate follow-up questions.
Two respondents did not provide their company name or the respondent's name. Those results
were not included in the survey since we could not associate the responses with a location and also
because there was no way of knowing if these responses were duplicates of other responses (since
the survey was sent a total of three times).
28
A second effort was made to determine if the largest employers in Boston and Cambridge who
were not listed as direct customers of the MBTA were using a third-party benefits provider, or if
they were choosing not to use the program at all. These results should aid in determining how
many of the "non-Corporate" passes not listed in the MBTA's Corporate Pass database are actually
being reimbursed by an employer or purchased with an employer-provided transit-only debit card.
1.3.2
Corporate Pass Holder Usage Analysis
MBTA customers can gain access to the MBTA system in one of four ways: a plastic smartcard
called the CharlieCard, a paper ticket called a CharlieTicket, cash on board, or the most recent
method, which is only valid on the commuter rail and ferry system, mobile smartphone-based
ticketing. Corporate Pass holders receive CharlieCards if they are subway and/or bus riders only,
and these cards reload the monthly pass value automatically each month as long as employees do
not opt out of the program. The Corporate Pass is the predominant subscription service. Individuals
can sign up online, but the process is burdensome. Corporate commuter rail and ferry riders receive
a new paper CharlieTicket every month since the commuter rail and ferries do not have automated
fare collection systems and rely on visual inspection by conductors. The paper tickets also have a
magnetic strip that can be used on the central subway system, and the higher fare monthly ferry or
commuter rail pass also allows customers to use unlimited bus and subway services.
Since Corporate commuter rail and ferry riders do not tap in on their trains or ferries like
subway and bus riders do, it is difficult to directly measure their exact usage of the commuter
rail and ferry system in the same way that CharlieCard usage can be measured. For this reason,
bus and subway pass holders are the most accurate sample for the usage portion of this analysis.
However, commuter rail pass usage on buses and subways was also measured to estimate the likely
differences between Corporate and Non-Corporate Commuter Rail usage.
The CharlieCard usage was determined from Automated Fare Collection (AFC) transaction
data provided by the MBTA (2012d). The pre-fare-increase transaction data was obtained for the
months of April 2012 through June 2012 and the post-fare-increase data was for the months of
29
July 2012 through November 2012. The data was queried to separate the Corporate customers
from the Non-Corporate customers using a list of Active Corporate CharlieCards (Massachusetts
Bay Transportation Authority, 2012e). The average usage and median usage for each group was
determined and compared.
The results from above provide usage data for both before the fare increase and after the fare
increase. Given that the price of a LinkPass increased from $59 to $70 on July 1, 2012, the price
elasticity of demand can be calculated by determining the percentage difference in usage divided
by the percentage difference in price. For both Corporate and Non-Corporate transit users, the
percentage difference in price was 18.6% (($70-$59)/$59 = 18.6%). The absolute level of the fare
hike experienced by Corporate Pass users who enjoy pretax payment and employer subsidies was
lower than the full fare hike, though taken as a percentage difference-as long as the subsidies
remain constant-it remained at 18.6%. The different changes in usage were determined and the
price elasticity of demand for both Corporate and Non-Corporate customers can be compared to
the overall price elasticity of demand for transit.
1.3.3
Influences on Participation and Usage
In the third major task, the results from 1.3.1 and 1.3.2 were combined to determine to what extent
company location, industry, and policy affected employee participation and usage. A regression
analysis was performed to determine the influence of the following characteristics on employee
participation and transit usage:
" Employer location
" Pretax Availability
" Employer subsidy level
" Employer Size
" Employer Industry
30
* Availability of Parking
" Parking Subsidy
" City-Wide PTDM Ordinances
Though there are other factors that influence employee participation and usage, such as
statewide programs (DEP, clean air, health impact) or federal tax changes (such as the recent
increase in the pretax limit), these factors could not be included in this study. Since this is a
Massachusetts-based program, there is no way to compare the differential effects of statewide
programs or national tax reforms.
Ultimately, the information that results from this study can be used to help the MBTA develop
improvements to the Corporate Pass Program and market the program more effectively.
1.4
Organization of This Thesis
This thesis is divided into seven chapters. Following this introductory chapter, Chapter 2 delves
further into the background for the research, including current literature and previous research on
commuter benefits programs, the history and current status of commuter benefits in general and
the Corporate Pass program specifically, and a comparison to other employer pass programs across
the country.
The analysis portion of this thesis is presented in Chapter 3, 4, 5 and 6. Chapter 3 investigates
the current status of the program as a whole by presenting the results of the employer pass
survey, and then aims to estimate the current total market penetration of the program. Chapter
4 contains the usage analysis methodology and results, which compare Corporate Pass usage to
Non-Corporate monthly pass usage over the months of April 2012 to November 2012. Chapter
5 revisits the employer survey results and uses this information, plus location and industry
information, to create a model to predict employee participation and monthly pass usage based on
employer characteristics. The goal of this chapter is to determine which employer characteristics
31
are correlated with Corporate Pass Program participation and employee pass usage so that the
MBTA can better tailor their marketing and develop strategies to help the program grow. The final
question of the employer practice survey, which asks for open feedback to the MBTA, is examined
analytically in Chapter 6.
Finally, Chapter 7 contains the conclusions and recommendations
resulting from the research presented in the previous chapters.
32
Chapter 2
Literature Review
This thesis aims to use data gathered through the employer practice survey and AFC data to analyze
and improve the current MBTA Corporate Pass Program. Before improvements can be suggested,
past research must be reviewed and the current program structure must be analyzed and compared
to existing employer pass programs elsewhere. This chapter reviews the recent literature on transit
employer pass programs in the United States, the history of corporate commuter benefits in general,
and the MBTA's current fare structure and how the Corporate Pass Program fits into that structure.
It also explores employer pass programs offered in four other U.S. cities for comparison.
2.1
Commuter Benefits Overview
The term "Commuter Benefits" refers to "transit or vanpool benefits and parking cash-outs, which
provide financial incentives not to drive alone" (ICF Consulting, et al, 2003). This term is often
associated with, and sometimes confused with, "Transportation Fringe Benefits", which is the
"term used in tax legislation to refer to benefits for qualified parking, transit, and vanpool expenses"
(ICF Consulting, et al, 2003).
An important aspect of commuter benefits is that they only include benefits provided to
employees by employers. There are several different options for employers to provide transit and
vanpool benefits. One is for the company to cover the full cost of the benefit. The employer does
33
not incur payroll taxes for the benefit amount and the employee does not incur federal income or
payroll (and in some cases, state) taxes on this amount, so long as the amount is below the IRS
designated limit. The second option is for the company to offer a pretax benefit of the entire cost
of the pass (up to the pretax limit) which is taken out of the employee's paycheck before payroll
taxes are applied. The employees save federal income and payroll taxes on this amount, and the
employer does not pay payroll taxes on the deducted amount. Finally, the employer can offer a
partial subsidy so that the employer and employee each pay a share of the pass on a pretax basis.
See Appendix A for example tax calculations, which show what these savings can actually mean
for employees and employers. A final option is a parking cash-out, in which all employees receive
the value of the free parking as taxable income and then the individual employees decide whether
or not to pay for parking. Unlike the three previous options, parking cash-outs do not offer any tax
savings since the value of the cash-out is taxable for both the employer and employee. The law
does allow tax savings, however, if instead of choosing the cash option employees opt to use the
value of the parking space towards transit or vanpool expenses and the expenses are deducted from
their paychecks as described above (ICF Consulting, et al, 2003).
Commuter benefits can be provided through several different avenues. The MBTA Corporate
Pass Program is an example of an employer pass program where the agency distributes passes to
the employer and the employer pays the agency. Another option is vouchers, which employees
receive from their employers and can redeem when purchasing transit tickets in person. Vouchers
are becoming outdated, however, since many ticket sales are now being done via vending machines,
online or via mobile phones. A more recent version of vouchers is a transportation-only debit card,
which will only work at transportation merchants. Each merchant that accepts credit cards has
a unique merchant ID, and transportation debit cards will only work when those merchant IDs
contain the string that is unique to transportation merchants. These merchants can include ticket
windows, vending machines or parking garages, but do not include convenience stores which also
sell transit passes. A third type of benefit is reimbursement through a flex-spending account, which
can also be linked to a debit card (Commuter Check, 2012a).
34
2.2
History of Commuter Benefits
Prior to 1984, free parking provided by employers was considered a taxable fringe benefit.
However, this was not enforced by the Internal Revenue Service (IRS), reportedly because they
could not determine a basis for the value of the benefit. Other benefits, including transit and
vanpool, were not treated as taxable fringe benefits and were therefore tax-exempt. The 1984 Tax
Reform Act aimed to fix this ambiguity, but in doing so adversely affected transit and vanpool
riders by making parking the only tax-exempt "qualified transportation fringe benefit". Transit
passes were considered "de minimis" fringe benefits, meaning that transit benefits were allowed to
be offered tax-free to employees as long as they were of small value ($15 per month or less, later
adjusted to $21 per month). If the benefit exceeded that value, it would be taxed for the full value
(ICF Consulting, et al, 2003).
This policy was altered eight years later when Congress passed the Energy Policy Act of 1992,
which expanded the term "qualified transportation fringe benefit" to include transit and vanpool.
Limits were still placed on these benefits, and there was still a large disparity in these limits
between parking and transit or vanpool. Employee parking was tax-free up to $155 per month
while transit and vanpool use was tax free up to $60 per month (ICF Consulting, et al, 2003).
In 1993, the Clinton administration released a U.S. Climate Change Action Plan which called
for legislation which provided workers the option of receiving the cash value of employer-paid
parking as an incentive to reduce single-occupancy vehicle commuting. Though this plan was
never enacted, it brought attention to parking cash-outs as an option for employers seeking to
reduce parking demand (ICF Consulting, et al, 2003).
The transit and vanpool limit rose slightly to $65 per month in 1995, and two years later
the Taxpayer Relief Act of 1997 amended federal tax code and allowed qualified parking to be
offered in lieu of a salary increase. Up until that point, federal tax code prohibited offering any
qualified transportation fringe benefit in lieu of salary, and required that transportation benefits
be offered in addition to an employee's taxable salary in order to maintain the benefit's tax-free
status. The Taxpayer Relief Act of 1997 removed this major disincentive to parking cash-outs and
35
gave employers the ability to offer taxable salary increases in lieu of parking benefits while still
maintaining the tax-free status of the parking benefit for those who still chose to park. In 1998, the
Transportation Equity Act for the 21st Century (TEA-2 1) allowed employees to receive a cash-out
for any transportation benefit, not just parking, and it also raised the transit/vanpool cap to $100
per month effective in 2002. Parking benefits also rose to $175 per month (ICF Consulting, et al,
2003).
Commuter benefit limits continued to rise gradually in accordance with the consumer price
index until 2010 when transit and vanpool benefits were increased to match parking benefits at
$230 per month for each. The disparity was re-introduced in 2011 as transit/vanpool benefits
were reduced to $120, and then transit benefits were restored to be equal with parking at $245 per
month each in 2013. In 2009, bicycle commuters became eligible to receive up to $20 per month in
tax-free reimbursements from their employers for the purchase, maintenance and storage of their
bicycles (Internal Revenue Service, 2013a-i). See Figure 2.1 for a summary of the historical values
of the tax-advantages for transportation benefits.
$300
$250
$200
C
$5
S$150
-Parking Benefit Cap
-Transit/Vanpool
Benefit Cap
E
-Bike
Benefit Cap
$100
$50
$0
-
-
--
-F
e
r4
Tr0
IN
0
r4
0
0
C4
0
CN
N4
0
I
Figure 2. 1: Transportation Benefits Caps From 1992 to 2013
36
2.3
Evaluating and Improving Commuter Benefits Programs
There are many ways to measure success of a commuter benefits program, and an agency
must determine which methods are most valuable to them.
TCRP Report 107: Analyzing the
Effectiveness of Commuter Benefits Programs, states five measurable outcomes, listed below in
order of increasing complexity:
1. Awareness
2. Participation
3. Travel behavior changes
4. Transit agency impacts (ridership, revenues, and costs)
5. Regional impacts (vehicle travel and emissions)
The first method through which a program can be assessed is program awareness. Surveys in
several parts of the country have found that employees may be less aware of programs than one
might expect. For example, a 2004 survey in the New York City metropolitan area revealed that
just over half of respondents could not answer definitively whether or not their employer offered
any programs to aid with commuting costs (ICF Consulting, et al, 2005). A complete survey to
represent all employers and employees in the Boston area was not feasible for the purposes of this
research, but the findings from previous studies serve as a warning that it is likely that awareness
is not as widespread as an agency might assume.
Program participation consists of both employer and employee participation.
For some
employer pass programs, determining employer participation is simple if they maintain a customer
database. However, since part of the MBTA's program involves third-party administrators, the data
is often not fully available and an exact number is not easily attainable. This study estimates the
penetration of the MBTA program using various methods (see Chapter 3). Employee participation
among companies in the direct MBTA Corporate Pass Program is easier to determine as the number
37
of individual passes are known based on billing records. The employers that are known to be
enrolled in the program were surveyed, and employee participation rates at each company (based
on the reported employee totals) and generally across the region was determined (see Chapter
3). Employer characteristics such as location, worksite size, employer discounts (meaning full
or partial subsidies), and industry type may all lend additional information as to which types of
companies are participating now and how to best expand the program in the future.
Travel behavior changes include the number of new transit trips (peak and off-peak), changes
in transit mode share, and changes in the vehicle trip rate (VTR). The employer survey will glean
some information about these changes from employer to employer based on program availability.
Transit trips can be compared among employees of different employers to see how different
employer characteristics are influencing these changes, and also can be compared to MBTA riders
who are not enrolled in the Corporate Program. Transit Cooperative Research Program (TCRP)
Report 107 found-through a survey of 21 transit agencies, commuter organizations and thirdparty benefits providers in 12 regions across the United States-that transit ridership generally
increases 10% or more at worksites offering commuter benefits programs that include transit
passes. The increase was seen across virtually all of the 21 surveys, though the amount of increase
varied greatly. Half of the surveyed agencies and organizations reported a 10-40% increase, though
some increases were greater than 100%. The presence of a commuter benefits program not only
attracts new riders but it also generally increases ridership for existing riders. This study also found
that the new riders were primarily previously single-occupancy-vehicle drivers (ICF Consulting, et
al, 2005).
Transit agency impacts include ridership, revenues, and costs. This is especially interesting for
this research because midway through 2012 there was an MBTA fare increase so the fare impact
could affect Corporate and Non-Corporate customers differently. Records of fare revenue (both in
dollars and units) and ridership over time are instrumental in gaining insight into this program's
effectiveness at partially insulating employees from fare increases.
38
Regional impacts, such as vehicle travel and emissions, are very difficult to both measure
effectively and to relate directly back to a specific program or event. For the purposes of this
study, they are not considered. Some commuter benefits companies have developed tools to help
employers estimate the environmental and financial impacts of such a program. One example,
shown in Figure 2.2 below, is available on the Commuter Check@ website.
Results
The number of miles that $1000.00 worth of commuting will buy is 5221 mtles
From spending $1000.00 commuting, your company produces 25687.32 pounds of
carbon yearly.
From spending $1000.00 commuting, your employees save $3300.00 in taxes annually
by commuting.
From spending $1000.00 commuting, your company saves $80.00 in taxes annually by
commuting.
From spending $1000.00 commuting, the cost to drive the same distance annually is
$26541.11
The amount of carbon produced by driving the same amount in miles for 1 year is
46802 pounds
The annual savings from commuting and not driving to work is $14545.11
The annual carbon savings from commuting and not driving to work is 21115 pounds
By saving 21115 pounds of carbon by not driving is equivalent to the amount of carbon
saved by 246 tree seedlings that have been growing for 10 years.
Figure 2.2: Commuter Check@ Company Savings Calculator
For marketing purposes, it is helpful to know which employers will be most receptive to
these benefits. TCRP Report 87: Strategiesfor Increasing the Effectiveness of Commuter Benefits
Programsexplores the characteristics that contribute to success (close proximity to transit, many
39
employees already using transit, the company values commuter benefits, size, and a stable
corporate environment).
Unsurprisingly, employers situated close to high-quality transit are
very receptive to these programs, making downtown areas strong targets for commuter benefits
marketing. Futhermore, employers who have many employees currently using transit or vanpool
may be very receptive, even if they are not located close to "high-quality" transit. Another factor
that is more difficult to measure is if the employer sees the value in commuter benefits. Employer
size can also be influential, though there are some trade-offs. Larger employers may be more
receptive because employers with 100 employees or more often have a benefits or "work-life"
manager who serves as a good point of contact and may help to promote the program within
the company. Also, state and local regulations often require employers over a certain size to
offer pretax transit benefits, as with the Massachusetts Department of Environmental Protection
regulation or the ordinances in Cambridge, MA and San Francisco, CA (Massachusetts DEP,
1797; Cambridge Community Development Department, 1998; City and County of San Francisco
Board of Supervisors, 2008). On the other hand, smaller companies often do seem more willing
to implement the program since these companies have fewer levels of decision-making authority,
generally only one worksite, and lower administration costs. So it seems that larger employees
are good targets for marketing because they bring greater participation rates and more employees
into the program, but smaller companies with fewer levels of management may be easier to work
with and can make the decision to join the program more quickly. Finally, employers who are
currently facing financial problems or mergers, or who have unfilled employee positions may not
be receptive to a commuter benefits program until they become more stable (ICF Consulting, et al,
2003).
Marketing commuter benefits can involve some creative approaches. Although the end-users
are the employees, the marketing must ultimately target employers since they are the ones who
decide whether or not their employees will have access to the program. Some agencies have
attempted marketing campaigns aimed a the general public and current transit users to "bug
your boss" for commuter benefits. This tactic also involves letting the public know when there
40
are changes in the program, such as an increased pretax limit. Of course, the other option is
to market directly to employers. Recommendations from TCRP Report 87 include developing
partnerships with business groups to reach employers. In Boston, this could include A Better
City Transportation Management Association (ABC TMA). It also includes maintaining an
extensive database of employers and sending out mailings or e-mails when there are program
changes. Creating highly professional materials for employers that are written specifically for a
business audience, as well as maintaining a professional and informative website are also key.
If these materials are not provided by the agency, then employers are responsible for providing
the necessary information to their employees which can become a barrier to participation (ICF
Consulting, et al, 2003).
2.4
History of the MBTA Corporate Pass Program
The Corporate Pass Program has been a staple of the MBTA's fare payment structure since the
1970s.
On March 1, 1974, two-thousand employees of John Hancock Mutual Life Insurance
Company become the first MBTA riders to purchase prepaid MBTA passes through payroll
deduction. One month later, all state employees working in Boston were allowed to enroll in the
program, followed by City of Boston employees, and eventually the program grew to many other
companies in and around the city to become an integral part of the MBTA's fare payment system.
Since this was prior to the Tax Reform Act of 1984, the fare sales for the original Corporate
Pass Program could be deducted pretax from employees' paychecks. The employees experienced
additional savings through this program as well. There were three pass types available: a $105 per
year pass for commuters whose one-way commute on the MBTA cost $0.25, a $189 per year pass
for commuters who rode a $0.20 feeder bus to the subway, and a $210 per year pass for those with
a $0.50 one-way commute (the Riverside and Quincy lines as well as some Express Buses). The
more expensive express buses or commuter rail lines were not included in this original program.
The price of the pass was calculated based on 42 five-day working weeks, so that an employee that
41
received five weeks of paid time off (vacation, sick or holiday time) would get an additional five
weeks of free commuting-a 10% discount (Fuerbringer, 1974).
The introduction of the Corporate Pass Program signaled the beginning of a movement away
from expensive and inefficient fare collection by token and cash. The goals of the Corporate
Pass Program were to reduce transaction times at stations and on buses, as well as to incentivize
more use of transit, especially off-peak, by introducing zero marginal cost pricing. The Corporate
Pass Program also established a mechanism for employers to contribute to their employees' transit
commutes, analogous to provision of parking, through improved convenience, financial incentive,
and cultural "nudging". It was also believed that the program would improve the stability of
ridership when fares increase, and improve the attractiveness of transit in general (F. Salvucci,
personal communication, May 2, 2013).
In the mid-1990s, the MBTA embarked on a major advertising campaign which lasted for
several years. This campaign involved the purchase of employer databases and mass mailing
targeted to employers near MBTA stations. This effort doubled the number of MBTA clients
from 900 to over 1,800 (ICF Consulting, et al, 2003). In December of 2006, the MBTA introduced
the CharlieCard, along with a new web-based ordering and tracking system for the Corporate Pass
Program. This made the program easier for customers to use, and CharlieCards could simply be
reloaded each month without mailing new cards to the customer. Commuter rail and ferry passes
are printed on paper tickets, and still need to be mailed out. The new web-based system not only
made ordering easier, but it also made it easier for customers to access their receipts which can
be used towards auto insurance discounts through some insurance companies (Massachusetts Bay
Transportation Authority, 2012a). Given the improved user-friendliness of the system and the
passage of time since the last advertising campaign, it is time for a new initiative, which should be
repeated each year to maintain visibility.
The MBTA contracted the printing and activation of passes and CharlieCards to Cubic
Transportation Inc., beginning in 2009 when Cubic moved into the building that had been used
by the previous contractor. Although the contract meant less day-to-day work for the MBTA, this
42
arrangement turned out to be vulnerable to fraudulent use. In May 2011, it was discovered that
two employees of Cubic had been printing and activating passes without entering these passes into
the MBTAs system. Then, the passes were being sold on Craigslist for a discounted price. All
told, the culprits printed 20,000 tickets worth approximately $4 million. Although the scheme was
uncovered and the criminals were prosecuted, this criminal activity brought some negative press
to an otherwise very positive program (Roman, 2011). These events also allowed the MBTA to
terminate its arrangement with Cubic Transportation and begin their current contract with Edenred.
In July 2012, the MBTA implemented a 23% across-the-board fare increase, which raised the
price of a monthly local bus pass from $40 to $48, a LinkPass (unlimited bus and subway) from $59
to $70, and raised commuter rail passes on a zone-by-zone basis. Additionally, single-ride fares
were increased from $1.25 to $1.50 for local bus and $1.70 to $2.00 for rapid transit (Massachusetts
Bay Transportation Authority, 2012c). In light of this fare increase, the MBTA is reexamining the
existing programs-including the Corporate Pass Program-to see if there is any potential for
increased revenue, if the program should be modified, or if the program should be enhanced so as
to minimize the impact of future fare increases and service cuts.
2.5
MBTA Fare Structure and Current Corporate Pass
Structure
2.5.1
MBTA Fare Structure
The MBTA offers both single-fare payment options and monthly passes (see Table 2.1). Single
fare prices differ based on whether the customer is paying with a paper CharlieTicket or a plastic
reloadable CharlieCard. Bus passengers may also pay with cash-on-board for the same price as a
CharlieTicket. Commuter Rail and Ferry passengers can only pay with CharlieTickets, cash-onboard or mobile ticketing. Customers who pay cash-on-board on the Commuter Rail are subject
to a $3 surcharge. For further details on Commuter Rail and Ferry pricing as well as fare increase
43
information, see Appendix C.
Si ngle Ride
ChiarlieCard
ChiarlieTicket
Senior/TAP/Student
Bus
Rapid Transit Bus + Rapid Transit
$1.50
$2.00
$0.75
$2.00
$2.50
$1.00
Pa sses
Bus
7-)ay
M )nthly
Se nior/TAP/Student
$18.00
$48.00
$28.00
Rapid Transit Bus + Rapid Transit
$18.00
$18.00
$70.00
$70.00
$28.00
$28.00
Commuter Rail and Ferry Single-Ride
Commuter Rail
$2-$ 11
Commuter Ferry
$8-$16
$2.00
$4.50
$1.00
Monthly Passes
$70-$345
$262
Table 2.1: MBTA Single-Fare and Pass Pricing
2.5.2
Corporate Pass Program Structure and Third-Parties
The current Corporate Pass Program structure is depicted in Figure 2.3. The MBTA currently has
a contract with a local employee benefits company called Edenred to help administer the program.
This company receives the Corporate Pass orders from the MBTA, encodes the Charlie Cards
and distributes the passes to the 1,335 companies that participate in the program. On average,
a total of 116,700 employees receive passes through the MBTA Corporate Pass Program each
month. Edenred also owns a separate commuter benefits company, WiredCommute, which is
considered to be one of the 1,335 customers of the Corporate Pass Program.
This company
distributes 21,225 passes to 251 companies and also manages the program and takes care of all
of the tax paperwork necessary for these 251 companies (C. Lazzaro, personal communication,
August 30, 2012). WiredCommute also offers some additional solutions, such as transportation
debit cards and parking solutions. The 251 companies that WiredCommute serves order their
passes directly from WiredCommute and never have to interact with the MBTA. There is also
another large benefits provider, WageWorks, that is not associated with Edenred, which accounts
for 7,793 participating employees and 237 employers as of November 2012 (J. Trooskin, personal
44
communication, November 9, 2012). There are at least two other smaller benefits providers, but
they each only manage a small number of companies. This indicates approximately 36% more
companies and 33% more employees involved in employee-based transit payments not directly
through the MBTA program. WiredCommute and WageWorks combined account for 26.7% of the
Charlie Cards distributed to Corporate Pass customers.
These subscription monthly passes, either through third-parties or directly from the MBTA,
account for 27% of MBTA fare revenue with collection costs far below those of Non-Corporate
pass holders who must physically purchase a pass each month.
Figure 2.3: Diagram of the Current Corporate Pass Program Distribution System
45
2.6
The Mobility Pass Trial at MIT
Massachusetts Institute of Technology (MIT) is a long-standing customer of the MBTA's Corporate
Pass Program. They first offered a subsidy of $10 in 1996, and that subsidy has grown gradually
to it's current value of $35 (or 50%) (Chuang, 1996). In 2004, a thesis and seminar-based research
program began in the MIT Transit Group to explore the concept of expanding participation in
the MBTA monthly pass program through "universality." A Mobility Pass combines the MIT ID
and the MBTA LinkPass allowing employees to carry one card that serves two purposes. Regular
parkers are given the Mobility Pass at no additional cost, and they can enjoy the benefits of free
access to public transportation whenever they choose. This gives them the ability to leave the car
at home any time they choose, so that they are not restricted to one mode of commuting. For
regular transit users who do not have parking privileges, the Mobility Pass simply gives them the
convenience of having the CharlieCard embedded in their MIT ID.
An analysis of the program was conducted during the 2011-2012 academic year, and the
following results were determined:
1. The MBTA usage of LinkPass (transit only) users is substantial, as expected, as 84% of
LinkPass holders use greater than half of the cost of the pass per month (the price of the
pass to the employee after deducting the MIT subsidy) and 53% of all LinkPass holders use
greater than the full value of the pass per month. Additionally, 66% of Occasional/Evening
Parkers (who have also purchased the transit pass) use greater than the subsidized LinkPass
cost and 20% use greater than the full amount. Lastly, the Regular Parkers use the LinkPass
the least, but still 5% are using greater than the subsidized amount (Kamfonik, et al, 2012b).
2. The overwhelming majority (96%) of the MBTA usage is during the week, and 28-37% of
regular parkers commuted to work via transit at least one day per month, compared to 90%
of LinkPass holders (Kamfonik, et al, 2012a).
3. Mobility Pass Regular Permit holders park between 3.4% and 4.5% less than all other
Regular Permit parkers (Kamfonik, et al, 2012b).
46
4. Transit and parking are largely being used more as substitutes rather than complements, as
56% of transit trips do not correspond to a same-day parking transaction and others may well
be for Institute use during the work day (Kamfonik, et al, 2012a).
The Mobility Pass Trial provides some interesting insight into other marketing options that the
MBTA could explore. Though this was a small, limited trial, such programs have the potential
to reducing parking demand for employers and increase transit usage and revenue to the MTBA.
Including information on this trial and making other mobility passes available to other employers
(or perhaps even just other universities) has the potential to strengthen the program by increasing
participation, revenue, and customer satisfaction. A Mobility Pass would be best suited for an
employer with parking situated close to transit, where employees are likely to be able to access
the employer either by single occupancy vehicle or transit on a given day. In most sucessful
implementations of such a pass, there is an excess demand for parking either for visitors or patients
at a hospital, so reducing employee parking can provide immediate benefits to the employer.
Boston's many universities and hospitals are prime candidates for such a program. A more detailed
report can be found in Appendix E.
2.7
Comparison to Other Employer Pass Programs
Thanks to national third-party benefits administrators, commuter benefits are now available to
employers across the nation, regardless of whether or not their local transit agencies provide a
specific employer pass program. In addition, transit agencies across the United States continue to
offer employer pass programs since (as with the MBTA) often these programs offer a subscription
service and fewer administrative costs to the employer.
A list of regional pass and voucher
programs is available on the Federal Transit Administration Commuter Choice website (2002).
However, according to the website "...due to the recent changes in the tax code, more transit
agencies will likely begin similar programs. Therefore, do not use this list exclusively to determine
whether or not such programs exist" (Federal Transit Administration, 2002). Though this list is still
47
not comprehensive, it gives a sense of the breadth of these programs which are spread across the
country and include over 40 cities and regions. Despite the expansiveness of commuter benefits
programs, only 6% of employees in the U.S. had access to tax benefits for vanpool and transit
commuting in 2011, according to the Bureau of Labor and Statistics (King, 2012).
The American Public Transportation Association (APTA) Public TransportationFact Book
lists passenger miles and populations for the largest U.S. systems (Dickens, 2012). From the list
of the top 15 urbanized areas ranked by unlinked trips, the three urban areas directly above Boston
on the list (Washington DC, San Francisco, and Philadelphia), as well as the one below (Seattle),
were chosen for comparison case studies (see Appendix D for complete list). Not only were these
cities the closest in unlinked passenger trips, but they were also among those closest in passenger
miles and population. The cities also represent some geographic diversity with two on the east
coast and two on the west coast. To the extent possible, each transit agency was compared with
the MBTA in terms of employer pass holder ridership, employee and employer participation, and
financial benefit to the agency.
2.7.1
City 1: Washington, DC
The Washington, DC commuter benefits program, known as SmartBenefits@, is much like the
MBTA's Corporate Pass Program in the sense that it is a free service for employers. Like MBTA
customers, SmartBenefits@ employers have the option of using a fee-for-service third party to
administer the program, but they are not required to do so.
According to the Washington Metropolitan Area Transit Authority's website (2013):
SmartBenefits@ is a convenient Web-based program that lets employers assign the
dollar value of employees' monthly commuting benefit directly to the employees'
SmarTrip@ cards. This can be done right from your computer using our website.
With SmartBenefits@, you'll immediately eliminate the need to distribute vouchers
and debit cards.
48
Unlike the MBTA's program, SmartBenefits@ is a stored-value program that can be used for
a number of transit costs (including parking) at numerous agencies in the Washington, DC area.
Like the program, the employer orders and pays for the passes in advance and deducts the cost
from employees' paychecks pretax.
As of 2005, WMATA had two commuter benefits programs: Metrochek (a voucher program)
and SmartBenefits@. Combined, these programs had 208,000 employees participating and 25%
of transit riders were using this program. Additionally, 30% of WMATA's revenue comes from
employer pass program. Considering that the MBTA's Corporate Pass Program accounts for 27%
of fare revenue through the direct program and potentially up to almost 40% through indirect
programs, these programs can be considered roughly comparable and the MBTA is almost certainly
slightly ahead in terms of percentage of revenue coming from their employer pass program
(ICF Consulting, et al, 2005). Metrocheks were discontinued in November 2008 (Washington
Metropolitan Area Transit Authority, 2009), and existing Metrochek holders were encouraged to
load the value of the passes onto SmartBenefits@ cards.
2.7.2
City 2: San Francisco, CA
Employers in the city of San Francisco are required by ordinance to offer either pretax
transportation benefits, employer-paid transportation, or employer-provided transportation. The
ordinance was adopted in 2009, and applies to all employers with 20 or more employees nationwide
that have San-Francisco-based employees (with some exclusions, for example employees that
solely telecommute) (City and County of San Francisco Board of Supervisors, 2008).
Unlike the MBTA and WMATA, San Francisco does not offer employers the option of a free
service directly through the agency or city. Even though the ordinance requires all employers with
more than 20 employees to participate, it also requires them to use one of the third-party providers
listed in Table 2.2. However, the employer can choose to administer the program in house and
simply order passes through the vendor for a lower cost option (SFEnvironment & CommuteSmart,
2013).
49
Benefit Administrator
Clipper Direct (2013)
Commuter Check (2012a)
WageWorks/TransitCheck (2012)
TranBen, Ltd. (2013)
Paper Vouchers
X
X
X
Passes
Debit Card/Spending Account
X
X
X
X
X
Benefit Resources, Inc. (2013)
CBS Administrators, LLC (2012)
X
X
X
Table 2.2: Third Party Commuter Benefits Providers Available to San Francisco Employers
San Francisco employers are required to submit compliance forms each year. According to
SFEnvironment's website (2013):
The priority of the Department of Environment is education; we will work with
employers to help determine the best commuter program for your company and assist
in implementation. As such, enforcement emphasizes outreach and education resulting
in implementation of the commuter benefits programs.
The Ordinance directs the Department of Environment to take the following steps if
necessary:
1. Warning-A written notice of violation
2. Fines-Fines will be levied 90 days after the initial written notice. Employers
will be subject to a fine of $100 for the first violation, $200 for the second
violation and $500 for the third violation, up to a maximum of $800
The results of these forms are compiled in a report each year. The 2011 SFEnvironment and
CommuteSmart "San Francisco Commuter Benefits Annual Report" demonstrates nearly 40%
of the businesses that reported compliance during the 2011 cycle adopted a commuter benefits
program in direct response to the Ordinance. The most popular option for compliance is pretax
transit and vanpool deduction (79% of complying businesses), while an additional 14% of
businesses offer a full subsidy, 5% offer a partial subsidy, and the remaining 2% offer employerpaid shuttle service in lieu of or in addition to pretax transit and/or vanpool benefits. The report
50
also claims that the Ordinance reduced the carbon emissions attributed to commuter traffic by an
estimated 255,000 metric tons, a 12% decrease from the previous year. The report also found
a much higher participation rate, roughly two-thirds of employees on average, among smaller
companies with fewer than 100 employees. Of the companies that adopted a commuter benefits
program because of the Ordinance, almost 40% (430 companies) also chose to offer the benefits
to employees nationwide. Companies also reported that 270,000 San Francisco based employees
were eligible for pretax commuter benefits programs, and that 81,000 were enrolled in such a
program (roughly 30% participation across the board).
A city-wide ordinance with compliance reporting is a way for the city and local transit agencies
to gather information from companies that use a third-party provider to administer and provide
their transit benefits. However, compliance must be enforced in order to ensure accurate results.
SFEnvironment reports that they received 3,659 compliance forms in 2011, up from 1,135 in 2009
and 2,159 in 2010, and that 64% of businesses submitted a compliance form in 2011. Though a
report of 64% of businesses is useful, the City of San Francisco still does not know what types
of commuter benefits 36% of employers are offering, if any. However, the steadily growing
compliance numbers indicate that compliance may continue to increase over the next few years,
and this may become a very accurate way for the city to gather information about it's companies'
commuter benefits policies.
In short, the ordinance is increasing awareness and participation, which in turn "nudge" travel
behavior towards transit, increase transit agency ridership and revenue while reducing vending
costs, and have quantifiable regional emissions benefits.
2.7.3
City 3: Philadelphia, PA
The Southeastern Pennsylvania Transportation Authority (SEPTA) offers a Commuter's Choice
program which has two distinct options for commuter benefits (Southeastern Pennsylvania
Transportation Authority, 2013). The first, ComPass (Southeastern Pennsylvania Transportation
Authority, 2013), provides SEPTA monthly passes to human resources managers at a 5% discount
51
and employers must at least match that subsidy for a minimum total of 10% discount to employees
(J. Scimone, personal communication, April 30, 2013). In addition, the remaining value of the
pass is subtracted from the employee's salary for pretax savings. The passes are mailed to the
employer's HR office.
This program is very similar to the MBTA Corporate Pass Program,
except for the mandatory 5% subsidy. The second option, RideEco, is provided by the Delaware
Valley Regional Planning Commission (DVRPC), not SEPTA, and allows employees to purchase
vouchers and stored value cards pretax through their employers. Unlike ComPass, RideEco is
accepted at all regional public transit agencies, not just SEPTA, and RideEco also provides more
flexibility in that the employer may choose not to subsidize the pass (Southeastern Pennsylvania
Transportation Authority, 2013). RideEco also has two options: RideEco and RideEco Select. The
standard RideEco program costs $15 per shipment plus 4% of the cash value of the order, and
only offers vouchers. In this program, the employers must place all orders for their employees and
distribute the vouchers when they arrive. RideEco Select costs $3.25 per participant per month plus
2% of the cash value of the order, and gives commuters the option of vouchers, passes, tickets, or
stored value cards. Through RideEco Select, commuters have the ability to order their own passes
and get passes delivered to their home address (Delaware Valley Regional Planning Commission,
2013a).
2.7.4
City 4: Seattle, WA
Seattle's ORCA card, which is accepted by Community Transit, Everett Transit, King County
Metro Transit, Kitsap Transit, Pierce Transit, Sound Transit and Washington State Ferries, offers
two options for their commuter benefits. A comparison of the two programs, ORCA Business
Choice and ORCA Business Passport, is listed in Table 2.3, which is also available on the King
County Metro Transit website (2013). The major difference between the two programs is that
the Business Passport is a universal pass program that must be provided to all benefits-eligible
employees, while the Business Choice program is a traditional pass program through which each
employee can decide whether or not to opt in to his employer program (King County Metro Transit,
52
2013).
ORCA Business Choice
ORCA Business Passport
Universality
No. Employees opt in or out
of program
Best for
Companies needing a
program for monthly passes
or e-purse deposits
No
Yes. All benefits-eligible
employees are automatically
enrolled
Companies needing an annual
pass program
Requires minimum number
of employees
Requires written agreement
Online card management
Who pays for the passes?
One-time agreement
Monthly
Company decides whether to
subsidize all, some, or none
of the cost
Cost per employee
Monthly retail prices apply
Payment terms
Tax benefits for employers
and employees
Pre-pay by check or credit
card (Visa or MasterCard)
Yes
Yes (minimum of 20
employees; 5 in select
locations)
Annual agreement
As needed
Company subsidizes 50 to
100% of the cost of each pass
Annual bulk pricing
depending on company
location
Post pay by check
Yes
Table 2.3: Comparison of ORCA Commuter Pass Options
In addition, the University of Washington has its own universal pass program for employees
and students called the U-Pass program. Similar to the results found in the Mobility Pass Trial
described in Section 2.6, not only is this a beneficial program for King County's transit providers,
but the program has greatly reduced parking demand on the University of Washington campus.
In 2001, the University of Washington reported having fewer parking spaces than in 1983 despite
having 8,000 additional employees and students (King County Dept. of Transportation, 2001). The
success of this program is even more apparent than the Mobility Pass trial because it is a campuswide program that includes both students and employees, and it has been in place for over twenty
years now.
As of 2005, an estimated 95,000 to 103,000 employees, which accounted for 20-22% of riders,
53
were using employer passes. The U-Pass alone accounted for greater than 10% of transit riders.
About 35%-41% of King County Metro's revenue came from transit benefits programs, 14% of
which came from students and employees in the U-Pass program (ICF Consulting, et al, 2005). It is
worth noting however, that these figures are from 2005 and there is no mention of the ORCA card,
which is the current program. These figures could have changed in light of the new technology,
though it is doubtful that a more convenient pass program would reduce participation.
2.7.5
Lessons Learned from Employer Pass Program Comparison
These four case studies show a number of different ways that commuter benefits are implemented
across the country. As the MBTA evaluates its current Corporate Pass Program and makes choices
about how to proceed in the future, it is useful to see how other cities are administering their
commuter benefits programs and the relative success of each. One difference between the MBTA's
Corporate Pass Program and these other four commuter benefits programs is that the MBTA
Corporate Pass only grants pass holders access to the MBTA's system. A pass that grants riders
access to other transit providers (such as EZ-Ride, Longwood Medical Area shuttles, and Logan
Express) may be an option for future changes. It would give Corporate customers somewhat greater
accessibility, though the financial and ridership implications would need to be studied further, and
the willingness of the shuttle programs to participate would need to be negotiated.
San Francisco's commuter benefits program has the potential to inspire future changes in
Boston. SFEnvironment reports that the city-wide ordinance has increased employer participation
in commuter benefits program, not just in San Francisco but in other employer locations outside
of the city. Furthermore, the compliance forms are a way for the transit agencies and governing
city to gather information about the employers who are offering commuter benefits through a
third-party provider. By completely outsourcing the ordering of passes to employers and thirdparties, the city and transit agencies can save some costs. However, once per year they would
need to enforce compliance by collecting the mandatory forms, and the quality and precision of
the information provided by each company can vary. Enforcing compliance would also entail
54
keeping a database of all companies within the city limits. One problem with some commuter
benefits ordinances is that the employers can simply adopt a commuter benefits program and send
in the appropriate compliance form without actually advertising the program at all internally. The
fact that the San Francisco compliance forms ask for participation levels allows the opportunity to
follow up with companies that have low participation rates. San Francisco also provides employers
with a guide that contains tips on how to implement and advertise a commuter benefits program
at their location, which includes conducting a survey to determine the most appropriate type of
program for employees and including the new program in orientation materials and employee
handbooks (SFEnvironment & SmartCommute, 2013).
This allows the ordinance to not only
increase employer participation, but also to increase employee participation.
An aspect of San Francisco's program that should be adopted by the MBTA is the publicly
available information and comprehensive website. The annual report is a great way to promote
commuter benefits and to let employers who are currently complying with the ordinance know
what environmental impacts their new pretax transit and vanpool programs are having and how
they compare to other employers. The website and the guide for new employers are also useful for
promoting the program and giving employers the information they need to administer a successful
program.
Philadelphia's agency-provided subsidy is also an example of a strategy that could be
implemented at the MBTA. If even small subsidies increase employee participation (see Chapter 5
for more on the effects of subsidy on employee participation), then splitting a 10% subsidy between
the company and the MBTA is a great way to get greater employee participation with little cost
to both the company and the agency. The Philadelphia program also has another option, which is
to go through a third-party for a regional pass. Though the employer does not need to subsidize
this option, the employer must pay an administrative fee. Since this is a regional program, the
employee enjoys greater accessibility, which may also increase employee participation. However,
reliance on a third-party can obscure data on participation and ridership from the agency.
Finally, Seattle's ORCA Business Passport is an example of a successful universal pass
55
program that brings in a great deal of revenue and transit ridership, and reduces parking demand
for the University of Washington. The Mobility Pass Trial, described in the previous section, is an
example of a universal pass program that has been considered in the Boston area. Such programs
could potentially be highly beneficial to the MBTA as well as the companies that implement them.
There are two major differences between the Mobility Pass Trial and the U-Pass program, which
contribute to the greater success of the U-Pass program. One is that U-Pass is a comprehensive
program available to the entire university, not just a small pilot program. The other is that the
program includes students, and in fact depending on the program the student is enrolled in they
can be automatically opted in to the program. A similar program has an enormous potential to
benefit the MBTA as well as the many local universities and hospitals that could implement it.
56
Chapter 3
Investigating the Current MBTA Corporate
Pass Program
The first phase of this research involves investigating the status of the current MBTA Corporate
Pass Program. The first step in this process is the employer practice survey, which provides more
information about the companies that offer the Corporate Pass Program. This information will be
useful in itself as it provides information to the MBTA about who their customers are, how they are
implementing the program (if they are offering a subsidy, for example), and what characteristics
these customers exhibit. In addition to this, the survey results will also be used in Chapter 5 to
analyze the effects that certain employer characteristics may have on both employee participation
and pass usage. The second step in the investigation of the current program is an estimate of
the total employer market penetration.
It is useful for the MBTA to know what percentage
of employees located near their system have access to the Corporate Pass Program to gain an
understanding of the status of the current program and what their marketing and expansion goals
should be.
57
3.1
Employer Practice Survey
There are a number of employer characteristics that can influence an employee's decision to
participate in a pass program by signing up for an MBTA pass through the company, and some of
these characteristics may also influence the employee's usage of their transit pass. This chapter
analyzes only the companies that are direct customers of the MBTA since only very limited
data was available from companies using a third-party benefits provider.
In this chapter the
characteristics of the employers in the program are examined through the employer practice survey
results, and later in Chapter 5 the effects of each characteristic on participation and usage are
studied.
Figure 3.1 shows employers in the Corporate Pass Program as circles, with the blue circles
representing those who did respond to the employer practice survey and the green representing
those companies who did not. This map shows that the sample is representative, as the responses
are spread throughout the region proportionally.
3.1.1
Location
Location is likely to be one of the most important characteristics that influence employee
participation and usage. If an employer is not located in an area that is easily accessible by transit,
then transit will not be a viable option for the employees of that company. For the purposes of this
study, location consists of three different components: distance from the central business district,
distance to transit stations, and whether or not the employer is located in Cambridge.
Location was determined from the MBTA records of Corporate Pass Program mailing
addresses for the respondents to the employer survey.
Distance to Central Business District
Employers located closer to the central business district (CBD) will likely have a higher
participation rate as they will have a greater accessibility to transit. The employees that work
58
Figure 3.1: Representativeness of Sample
59
close to the CBD will have access to multiple subway lines and bus routes, whereas employees
who work further outside the city center may only have access to one transit line.
Government Center Station was used as the location of the CBD, and ArcGIS was used to draw
concentric circles of varying diameters around Government Center. The number of employers
within each ring was counted, and the results are shown below in Figure 3.2. The results show
that more than one-third of employers in the Corporate Program are located within 0.5 miles of
Government Center Station, indicating that employers closer to the city center are more likely to
join the Corporate Pass Program.
250
201
200
150
91
100
84
73
45
50 -
24
0
Within0.5
0.5-1
1-1.5
1.5-2
2-2.5
2.5-3
Distance from Government Center Station (miles)
Figure 3.2: Distance to CBD
60
3-3.5
>3.5
Distance to Transit Station
The shortest point-to-point distance from each company to a bus stop, subway station, or commuter
rail station was determined. Intuitively, employers that are located close to transit will have a higher
participation rate than those who are not. Table 3.1 shows some descriptive statistics for distance
to the closest subway station for all employers who responded to the survey. Figure 3.3 also shows
that the vast majority of employers are located within 0.5 miles of a subway station, and Figure 3.4
shows the distribution of these employers who are located within 0.5 miles of a subway station.
Distance to bus stations and commuter rail stations were also explored, but since the majority of
employers are already within 0.5 miles of a subway station, the sample of employers that are close
to other types of transit is very small and is not likely to be influential.
Minimum
Maximum
Quartile 1
Median
Quartile 3
Mean
Standard Deviation
0.006
7.77
0.093
0.170
0.284
0.313
0.623
Table 3.1: Employer Proximity to Subway Station
61
C~)
U')
C-
c')
C)
C
CA"
-
z
8
6
4
2
0
Distance to Subway (miles)
Figure 3.3: Corporate Pass Program Employer Distance to Closest Subway Station
C
OD-
0
E
LU
05
z
C
I
0.0
I
0.1
I
0.2
I
I
0.3
04
I
05
Distance to Subway (miles)
Figure 3.4: Corporate Pass Program Employer Distance to Closest Subway Station (only those
within 0.5 miles)
62
Location in Cambridge
Employers in Cambridge were analyzed as a group to investigate whether a location in Cambridge
effects participation or usage considering Cambridge Community Development Department's
(2011) ordinance to reduce single occupancy vehicle use.
in Chapter 5, 72 (14%) were located in Cambridge.
Of the 526 survey responses used
Additionally, 13% of employees work in
Cambridge. Most of these employers (80%) are located within 1 and 4 miles of the CBD, though
some are located as far as 6 miles from Government Center.
3.1.2
Availability of Pretax Purchase of Passes
There were 559 responses to the survey question regarding pretax benefits through payroll
deduction. Of the 559 responses, 540 (97%) offer the pass pretax to their employees and/or offer
transit passes for free. Four of the remaining 19 employers offer a partial subsidy, so only 15
companies (less than 3% of our sample) are offering no subsidy and no pretax option. For these
employees, the only benefits of the program would be the convenience of receiving the pass at work
and on a subscription basis. The fact that almost all of the companies in the program are offering
the pass pretax is a positive finding for the MBTA, since it means that the knowledge that Corporate
Passes are generally available pretax is widespread throughout the program. It also shows that it is
not prohibitively difficult to administer the pretax benefit. However, it is useful to learn that there
are a small number of companies on the program that do not offer pretax benefits. By checking
in with their customers regularly to see if they are offering the pass pretax, the MBTA can send
targeted marketing materials and information to these companies to demonstrate the benefits of
offering the pass pretax through payroll deduction. In Chapter 5 the effects of pretax availability
on participation are examined, and these results can help the MBTA to decide if such an effort
would be worthwhile.
63
3.1.3
Subsidy
The next question on the survey asked about the percentage of the monthly pass that was
subsidized. For the employers that offered a flat rate subsidy, these subsidy levels are reported as a
percentage of the monthly LinkPass for consistency. There were 556 companies who responded to
this question. Of them, 214 (roughly 38%) responded that they offered a subsidy to at least some
of their employees. Although this is only 38% of companies, since the largest companies tend to
offer subsidies, this translates into 74% of Corporate Pass eligible employees who are offered a
transit subsidy. Of the employees actively participating in the program, 80% are receiving some
type of employer-provided subsidy. Of the companies that subsidize, the average subsidy is almost
80% (see Figure 3.5). However, when the average is weighted by the number of employees at a
company, the average subsidy available to employees of companies that subsidize is almost 50%,
showing that the companies that offer the highest subsidies tend to be smaller (see Figure 3.6).
More descriptive statistics can be found in Table 3.2.
Subsidy by
Minimum
Maximum
Quartile 1
Median
Quartile 3
Mean
Standard
ation
6%
100%
50%
100%
100%
79%
29%
6%
100%
30%
50%
50%
49%
22%
Company
Subsidy by
Employee
Deviation
Table 3.2: Subsidy Statistics
There were some assumptions made in the process of calculating these results. If a company
indicated different subsidies for part-time employees and full-time employees, the subsidy for fulltime employees was used. Also, if a range was provided to indicate that each pass level was
subsidized differently, it was assumed that the link pass was the top number in the range (for
example "30%-100% depending on the pass" would be counted as 100%). These assumptions
only affected 3% of the sample.
The subsidy level tends to increase as distance from the city center increases, as shown in
Figure 3.7. This is expected since transit is much more convenient in the city center than in the
64
C)l
CL
C
in
S
wL
C)
CD
c(N
.
0%
2
20%
6
60%
40%
8
80%
100%
Subsidy
Figure 3.5: Distribution of Subsidies by Employer
Ck
C.
C0
CD
I'
C
LU
C
z
C
C
-
(0%-10%]
(10%-20%]
(20%-30%]
(30%-40%}
(40%-50%]
(50%-60%]
(60%-70%]
7
(
/0%-80%] (80%-90%]
Subsidy (% of LinkPass Value)
Figure 3.6: Distribution of Subsidies by Employee
65
(90%-100%]
suburbs, and in many cases it is more convenient than driving, so subsidies are not as necessary to
persuade commuters to use transit. An employee working in the suburbs may not consider transit
a realistic option unless they receive a subsidy.
66
Figure 3.7: Employer Subsidies
67
3.1.4
Parking Availability and Cost
Parking is also a very important characteristic. If there is no parking available, or if parking is
prohibitively expensive, transit will be a much more appealing option.
Of the 563 companies that responded to the parking availability question, 298 do not offer onsite parking for employees, 47 stated that they only had parking for executives or less than 10% of
their employees, and 27 stated that they had public parking or shared garage nearby (although they
were not specifically asked this). This totals to 372 employers who do not offer on-site parking to
general employees and 191 who offer on-site parking. This means that roughly two-thirds of the
companies surveyed do not have on-site parking available.
Although the majority of employers do not offer parking, the companies that do offer parking
tend to be much larger so the vast majority of employees have access to parking.
125,641
employees (or over 80%) work for employers with access to on-site parking. Figures 3.8 and
3.9 show parking availability by employer and employee respectively.
400
372
350
300
250
E
200
0
191
E
Z 150
100
.0
50
0
Employers without On-Site Parking
Employers with On-Site Parking
Figure 3.8: Employer Parking Availability
68
140000
125,641
120000
100000
0
E
80000
a)
.0
60000
FgrE
z
40,932
1104
40000
30,277
20000
11,042
On-Site Parking
No On-Site Parking
a Employees
U Corporate Pass
Program Participants
Figure 3.9: Employee Parking Access
There were fewer responses to the survey question about parking subsidy (383 total). These
responses have been divided into those companies that do offer on-site parking and those that do
not.
On-Site Parking
Almost half of companies that offer on-site parking also offer it free to employees. However, these
companies are mostly small companies since only 14% of employees with on-site parking have
access to free parking. The data also show that larger companies tend to offer partial subsidies as
25% of employers with on-site parking offer partial subsidies, and 52% of employees with access
to on-site parking benefit from these partial subsidies. See Figure 3.10 for more details on employer
parking subsidies and Figure 3.11 for employees with access to different parking subsidies. The
on-site parking data are shown in blue in Figures 3.10 and 3.11.
69
No On-Site Parking
Over 80% of employers and 63% of employees without access to on-site parking also do not have
any parking subsidies. This group of employees is a key demographic for the Corporate Pass
Program because the lack of parking accessibility combined with the high price of unsubsidized
public parking make transit a more appealing option for these employees. 12% of employers and
20% of employees without on-site parking enjoy 100% subsidies for off-site parking, and only
7% of employers and 17% of employees have partial subsidies for off-site parking. The off-site
parking respondents are shown in red in Figures 3.10 and 3.11.
200
178
180
160
140
120
E
U 100
* On-Site Parking
1
* No On-Site Parking
E 80
77
z
60
41
40
20
0
Free Parking
Partially Subsidized
No Subsidy
Figure 3.10: Parking Subsidies by Employer
70
40000
37,833
35000
30000
w25000
-4---
E
' 20000
On-Site Parking
-
N No On-Site Parking
E
3 15000
10000
878
9,851
50003617
0
1
Free Parking
Partially Subsidized
No Subsidy
Figure 3.11: Parking Subsidies by Employee
3.1.5
Size
The size of the companies involved in the Corporate Pass Program range from 1 employee to
23,000 employees. The average size of these companies is 280 but the median size is only 37,
which indicates that there are a large number of small companies and a few very large companies.
More descriptive statistics can be found in Table 3.3. As mentioned in Chapter 2, the relationship
between size and participation can be complicated, since smaller companies tend to adopt the
program more quickly but larger companies often have an employee assigned to the role of
administering and promoting the program. Size may also be positively correlated with parking
availability, as is the case with many large hospitals and universities. There is also a possibility
that smaller companies could have higher participation rates because they are joining the program
because they have employees who are already interested.
Figure 3.12 shows the distribution of sizes for all companies on the direct Corporate Pass
Program. It is clear that the vast majority of employers have fewer than 1,000 employees. Figure
3.13 shows only the employers with 1,000 employees or fewer for greater clarity, and it reveals
71
that the vast majority have fewer than 100 employees.
Though there are only a small number of very large companies, they are so large that the vast
majority of employees in the program work for a very large company. The top 8 largest companies
that responded to the survey account for over 50% of the employees represented by the survey
results.
All but a handful of survey respondents are located in Suffolk, Middlesex and Norfolk counties,
so U.S. Census data was collected on the size of all employers in these three counties, and Figure
3.14 shows the number of Corporate Pass employers within these counties in each size category as a
percentage of the total number of employers of the same size in those three counties (U.S. Census
Bureau, 2013).
This shows that the percentage of very small companies within the Corporate
Pass Program is low compared with the percentage of small companies among all companies in
the Boston area, and that as employer size increases the Corporate Pass Program represents an
increasingly larger portion of employers in the region. This is the opposite of what was stated in
the literature; larger companies are more likely to join the Corporate Pass Program than smaller
companies. This indicates that smaller companies within the Corporate Pass Program are likely to
have higher participation rates, because if they are among the few small companies who choose
to join the program, they probably have a strong motivation such as a downtown location with no
parking or many employees who are already using transit for their commutes.
Minimum
Maximum
Quartile 1
Median
Quartile 3
Mean
Standard Deviation
1
23000
15
37
91
280
1455
Table 3.3: Employer Size Statistics
It is also important to consider how size may influence other characteristics. For example, large
universities or medical centers may be located on large campuses with ample available parking.
Table 3.4 shows the cross tabulation of employer size and parking availability, and it clearly shows
that the larger companies are more likely to have on-site parking than smaller companies.
72
Ct)
W
0
(C)
0.
E
w1
CD
0
-
C4J
C)
C)-
0
5000
10000
15000
20000
Size (Number of Employees)
Figure 3.12: Company Size for All Direct Corporate Pass Program Employers
0
.
E
CN
w
CD -
I
0
I
200
I
I
I
I
400
600
800
1000
Size (Number of Employees)
Figure 3.13: Company Size for Direct Corporate Pass Program Employers with 1000 Employees
or Fewer
73
--
18%
0
16%
-
-
--
--
-
-
U
14%
.C
,
12%
E
lo
10%
0.
E
6%
0k.
E
4%
o
U
L
0
U
-
--
02%
%
1-4
5-9
10-19
-
- -
20-49
50-99
-
100-249 250-500 500-999
1000 or
more
Number of Employees
Figure 3.14: Distribution of Company Size for All Direct Corporate Pass Program Employers as
a Percentage of the Number of All Employers in Suffolk, Norfolk and Middlesex Counties of the
Same Size
74
Parking
On-Site Parking No On-Site Parking Total
Employer Size
80% 100%
20%
% within row
48% 40%
% within column
24%
168 211
43
Count
25 or Fewer
32%
68% 100%
% within row
31% 30%
28%
% within column
106 156
50
Count
26-75
49% 100%
% within row
51%
20% 26%
40%
% within column
68 139
71
Count
76-1000
25% 100%
75%
% within row
1% 4%
8%
% within column
5
20
15
More Than 1000 Count
66% 100%
34%
% within row
100% 100%
100%
% within column
347 526
179
Count
Total
Table 3.4: Company Size Shown by Parking Availability
75
3.1.6
Industry
All of the respondents were characterized by industry according to the North American Industry
Classification System (NAICS). Industry could have some effect on participation or usage since
it may be an indicator of other company policies. For example, certain industries may be more
conducive to telecommuting.
Also, there is likely to be some competition among employers
within the same industry so they may offer similar employer benefits.
There are no a priori
expectations for how industry will effect Corporate Pass employee participation or usage, but
rather this information is being collected to determine the employer demographics of the program
and to see whether or not industry could in fact be an influencing factor. In Chapter 5, industry is
investigated further as a potential indicator of employee participation or usage, and this information
could be useful to the MBTA for marketing purposes.
The "Professional and Business Services" industry has the most employers out of any industry
category, and accounts for 39% of employers on the Corporate Pass Program.
This industry
includes the offices of lawyers, accountants, engineers, architects, marketing firms, and other
professional services. Figure 3.15 shows the number of employers on the Corporate Pass Program
in each industry. When the industries are categorized by the number of employees in each industry,
however, it becomes clear that the majority of employees who have access to the Corporate Pass
Program are healthcare workers (as shown in Figure 3.16). In fact, almost 60% of employees with
access to the program work in the healthcare industry. When looking at only those employees that
actually use monthly passes obtained through the Corporate Pass Program (shown in red in Figure
3.16), healthcare employees account for 62%.
Figures 3.17 and 3.18 show the distribution of employer classification among Corporate Pass
Program employers and employees respectively, as a percentage of all employers and employees
in the same industry within Suffolk, Norfolk and Middlesex counties (U.S. Census Bureau, 2013).
This shows that employer participation in the Corporate Pass Program varies by employer industry.
"Educational Services", "Information", and "Professional and Business Services" companies are
more likely to participate in the program than employers in other industries. Figure 3.18 shows
76
that the Corporate Pass Program represents a large percentage of employees in the "Information"
industry in the region. A relatively large portion of "Health Care and Social Assistance" employees
also have access to the Corporate Pass Program, which is unsurprising based on the number of very
large hospitals which are known to participate in the program.
250
204
200
0-150
100
E
71
z
61
55
50
292
34i
0
Figure 3.15: Corporate Pass Program Employers by Industry
77
100000
89,126
90000
80000
70000
60000
50000
E
40000
z
30000
20000
10000
2 2,730
-
16,180
-
6,571
5 634
3,433
3,062
0
Industry
Figure 3.16: Employees with Corporate Pass Program Access by Industry
78
.5%
-2.0%
C
1.5%
LU
Z 1.0% -
E
LU
4A
.0%
IlL?
I1
IM
U
Industry
Figure 3.17: Distribution of Industry Classification for All Corporate Pass Program Employers
as a Percentage of All Employers in Suffolk, Norfolk and Middlesex Counties Within the Same
Industry
79
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0%
En 30%
1
0%
0
0N
0
'U
0%
\R-
-
q5'
o
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3.2
Employee Participation Rate
Employee participation rate is defined as the number of employees at a company who participate
(i.e., receive a monthly MBTA pass) in the Corporate Pass Program divided by the total number
of employees at that company. The characteristics described in Section 3.1 are all factors that
may influence employee participation in the Corporate Pass Program.
Chapter 5 will further
investigate each of these characteristics and their effect on employee participation.
Ultimately,
if the MBTA knows which characteristics influence participation then it will help them to target
their communications and marketing accordingly.
The first few questions of the employer practice survey aimed to estimate the number of
employees who participate in the program at all companies that offer the Corporate Pass. There
were 555 companies who responded to both Question 1 and Question 2. From that we can calculate
an overall participation rate of 33% program-wide.
51,191 participating employees
155, 691 total employees
(3.1)
Figure 3.19 shows that participation generally increases closer to the city center, and the more
suburban census tracts tend to have lower participation rates. Chapter 5 will further explore the
effects of each of the characteristics in 3.1.1-3.1.6 on participation rates.
Figure 3.20 shows the distribution of participation rates by employer. The mean participation
rate by employer is 46% and the median is 43%. However, similar to the San Francisco case study,
it appears that in Boston the larger employers tend to have lower participation rates (see Figure
3.21). This shows that it may be beneficial for the MBTA to work with these larger companies on
strategies to help increase participation.
81
Figure 3.19: Employee Participation
82
C)
0
E
w
C)
0
E
Z
0%
0
20%
40%
60%
80%
Percentage of Employees Participating
100%
Figure 3.20: Participation Rates by Employer
60%
50%
44%
40%
33%
32%
30%
E
20%
10%
0%
25or Fewer
76-1000
26-75
Employer
Size (Number of Employees)
Morethan1000
Figure 3.21: Employee Participation by Employer Size
83
3.3
Employer Market Penetration
Now that the characteristics of the individual companies within the direct Corporate Pass Program
have been characterized, it is important to take a step back and look at the larger picture. This
section aims to estimate to what extent the Corporate Pass Program and other related commuter
benefits options are available to employees in the Boston area. In other words: What is the market
penetration of the program?
In order to determine this penetration, the "market" itself must be defined.
Clearly every
business in the state of Massachusetts is not a potential customer since businesses located far
away from any MBTA service would not have any use for the program. Two potential markets are
analyzed in this section: large employers in downtown Boston and Cambridge, and all employers
within a walkable distance of a transit station.
3.3.1
Large Employers in Boston and Cambridge
One method that was used to examine the market penetration was a brief survey of the top 25 largest
companies in Boston and Cambridge. Among this sample (Boston and Cambridge combined), 57%
of employees have access to the direct Corporate Pass Program.
The top twenty-five largest employers in Boston and Cambridge were determined by consulting
lists published by the Boston Redevelopment Authority (Lima, et al, 2011) and the Cambridge
Community Development Department (2012). Those top 25 largest employers who were not
on the Corporate Pass Program list were contacted and asked about their commuter benefits
programs. Through phone interviews and the companies' websites, it was determined that at least
85% of employees of large companies in Boston and 89% of employees of large companies in
Cambridge have pretax commuter benefits available to them. In fact, all of the employers that
were successfully contacted offered some sort of pretax commuter benefit. Since only those large
employers who were not successfully contacted did not report a benefit, this indicates that it is safe
to assume that almost all employees that work at the largest companies in Boston and Cambridge
84
have access to some sort of pretax discount. These fifty companies include roughly 114,000
Boston employees and 43,000 Cambridge employees. Within this sample (Boston and Cambridge
combined), 57% of employees work for a company that offers the direct Corporate Pass Program,
29% are offered third-party benefits, and no information was available from the companies that
employ the remaining 14% (see Figure 3.22).
100000
-
c
- - -
---
-
-
-
-
-------
90000
80000
70000
60000
.
E
50000
0
E
40000
30000
20000
10000 1
0
U Cambridgel
UBston
Unknown
Direct Customers
Third-Party
19033
19061
4560
27025
16932
70361
t
Figure 3.22: Benefits Offered to the Employees of the Top 25 Largest Employers in Cambridge
and Boston
There are multiple ways in which an employer (usually using a third-party provider) can
provide transit benefits to an employee--either through a subscription pass mailed to the
employees doorstep or some other method such as transportation debit cards, vouchers or flex
spending accounts. Since this information is not available publicly, and in fact some employers
offer more than one type of transit benefits, it has to be estimated based on what is known.
85
Roughly 27% of subscription Corporate LinkPasses are ordered through third parties. This
means that, assuming that this percentage holds true for the largest employers, the 19,033
Cambridge employees and the 70,361 Boston employees who have access to the direct Corporate
Pass program are only 73% of the employees in the area that have this benefit. By dividing the
number of employees who use the direct program by 0.73, it can be estimated that roughly 96,400
employees in Boston and 26,100 employees in Cambridge have access to the pass program on a
subscription basis. Therefore, if there are 122,500 employees eligible to order subscription passes
and 89,394 of them are direct customers of the MBTA then the difference (33,100) are likely
eligible to receive subscription passes from a third party. The estimated breakdown is shown in
Figure 3.23. There are three estimates which differ based on the "unknown" category. The first
estimate assumes that all of the companies that could not be contacted do not offer transit benefits,
and the second estimate assumes that all of the unknown companies offer transit benefits. These
two estimates are shown in Figure 3.23, and the actual results should probably fall between the
two estimates, but closer to Estimate 2 since the survey did not reveal any large companies that
do not offer any commuter benefits. Estimate 3 shows an approximation of the actual breakdown
(between Estimates 1 and 2), since this estimate assumes that the only companies that are not
offering the program are companies that have multiple locations and many part-time employees
(namely grocery stores).
For Estimate 1, the minimum number of employees with non-subscription commuter benefits
offered through third parties was determined by subtracting the number of employees with thirdparty subscription benefits from the number of employees with third-party benefits. For Estimate
2, the maximum number of employees with non-subscription commuter benefits offered through
third parties was determined by assuming that all employees in the "unknown" category receive
third-party benefits.
The best estimate of the breakdown of these benefits among the largest employees in Boston
and Cambridge, Estimate 3, is visualized below in Figure 3.24. Based on the above estimates,
57% have access to the direct program, 21% have access to subscription passes through third
86
100000
90000
89,400
89,400
89,400
80000
70000
CL
60000
E
aJ 50000
E
z
40000
3,100
29,500
30000
21,500
00U
20000
10000
hn
0
0
Estimate 1
Estimate 2
Estimate 3
MDirect Customers
Third-Party Subscription
a Third-Party Other
a No Pretax Transit Program
Figure 3.23: Estimated Benefits Offered to the Employees of the Top 25 Largest Employers in
Cambridge and Boston (50 companies combined)
parties benefits providers, and 8%to 22% have access to "other" third-party transit benefits. Using
Estimate 3 as a guideline, the percentage of employees with access to "other" third-party benefits
is approximated at 19%.
87
**t9t9t9tHt,9t9t9tt
999
t9t9t99t9t9t9t9999
99999999999999999999
Blue = Employees with Access to Direct Corporate Pass Program
Green = Employees with Access to Subscription Third-Party
Red = Estimated Employees with Access to Third-Party "Other" Benefits
Black = Estimated Employees with No Access to Transit Benefits
Figure 3.24: Estimated Penetration of Transit Benefits for Employees of Top 25 Largest Employers
in Cambridge and Boston
3.3.2
Estimate of Revenue From Non-Subscription Third-Party Benefits
The percentage of the MBTA revenue that is provided by customers of "other" types of third-party
benefits, such as debit cards and vouchers, can be roughly estimated. Assuming that participation
rates among third-party "other" employers is similar to the subscription program, and the pass types
are bought by these customers in the same proportion as subscription Corporate customers (i.e.,
the same percentage of LinkPasses, Local Bus Passes, and commuter rail passes for each zone),
the ratio of third-party "other" employees to third-party subscription employees can be applied to
the revenue from subscription customers to estimate this impact as shown in Equations 3.2 through
3.6. This assumes also that the "other" third-party employers are purchasing passes, and this does
not account for customers who are using pre-tax dollars to purchase single fares. This estimate
shows that these third-party voucher, debit card and flex spending programs could be contributing
between $1.27 million and $3.24 million in monthly revenue to the MBTA.
13, 000 Employees with Access to Third-Party "Other" Benefits (Est. 1)
122, 500 Employees with Access to Subscription Corporate Pass Program
88
11%
(3.2)
34, 500 Employees with Access to Third-Party "Other" Benefits (Est. 1)
122, 500 Employees with Access to Subscription Corporate Pass Program
0.11 <
-
Employees with Access to Third-Party "Other" Benefits
Employees with Access to Subscription Corporate Pass Program ~
<0.28
Third-Party "Other" Monthly Revenue
0.11 < $11,
11,554,139 Monthly Corporate Pass Sales Revenue -
(3.5)
$1.27 M < Third Party Non-Subscription Monthly Revenue < $3.24 M
(3.6)
This revenue range equates to 3-8% of the MBTA's annual sales revenue, as depicted in Figure
1.2 in Section 1.1.
3.3.3
Within a Walkable Distance of Transit
To define the market within a walkable distance of transit, all of the companies in the Corporate
Pass program were mapped, and it was determined that 88% of companies and 86% of Corporate
CharlieCard holders work within 0.5 miles of a rapid transit station.
An additional, 8% of
companies and 12% of Corporate CharlieCard holders are within 0.25 miles of a bus station, but
not a rail station. This means that almost all of the direct Corporate employers and employees are
located within 0.5 miles of a subway station or 0.25 miles of a bus station.
According to the Employer Practice Survey, there is roughly a 33% participation rate on
average across all employees who work for companies that offer the Corporate Pass (see Section
3.2 for more details). On average, across all months of 2012, roughly 116,700 Corporate Passes
of all types were sold. If the survey results are representative of the entire program, then this
means that 116,700 passes represent one-third of the total number of employees with access to the
program based on the average 33% participation rate. Therefore, an estimated 350,100 employees
work for companies that offer the Corporate Pass Program. Of these 350,100, 86% (or 301,086)
are estimated to be within 0.5 miles of subway and an additional 42,012 (12%) are located within
0.25 miles of bus.
According to the 2011 business location data published by Infogroup Inc. and ESRI (2011),
there are 33,096 employers and 658,809 employees within 0.5 miles of a subway station and an
89
additional 502,778 work within 0.25 miles of only a bus station in the Boston region. Given that
there are an estimated 301,086 employees near rapid transit with access to the Corporate Pass
Program, and 658,809 total employees with the same location characteristic, there is an estimated
45% Corporate Pass Program penetration of employees with access to the Corporate Pass Program
within 0.5 miles of a rapid transit station.
As for those only within 0.25 miles of a bus station, there is only an 8% penetration among this
population as indicated below:
301, 086 Employees with access to Corporate Pass within 0.5 miles of Subway Station
658, 809 Total Employees within 0.5 miles of Subway Station
=0.457
(3.7)
42, 012 Employees with access to Corporate Pass within 0.25 miles of Bus Stop (but not subway)
502, 778 Total Employees within 0.25 miles of Bus Stop (but not subway)
(3.8)
Applying the direct to indirect subscription ratio (73:27) shows that an estimated a 33% of
employees within 0.5 miles of a subway station have access to the direct Corporate Pass Program,
while an additional 12% receive their subscription monthly passes through a third-party provider
(combined, these direct customers and subscription third-party pass holders sum to the 45%
determined in Equation 3.7). Assuming that the ratio of employees with access to subscription
passes through third parties to employees with "other" third-party transit benefits remains constant
(21:19), the breakdown of this market can be seen below in Figure 3.25.
Figure 3.26 below shows all subway stations as black dots and the dot density of the number
of direct Corporate CharlieCards per census tract is shown in green. To clarify, each green dot
does not represent a single employer location, but rather the employees from all employers within
that census tract spread evenly throughout the census tract. This is done so as not to reveal the
identities of employers, since an employers involvement in the program is treated as confidential
information.
As expected, the market penetration is greatest closest to the city center and in
the MIT/Kendall Square vicinity of Cambridge. The other census tracts with a large number of
Corporate CharlieCards are all located near a rapid transit stop, and there are a few areas of sparse
90
00083
9999 99999919999
999999
Blue = Employees with Access to Direct Corporate Pass Program
Green = Employees with Access to Subscription Third-Party
Red = Estimated Employees with Access to Third-Party "Other" Benefits
Black = Estimated Employees with No Access to Transit Benefits
Figure 3.25: Estimated Penetration of Transit Benefits for All Employees within 0.5 Miles of a
Rapid Transit Station
dots that are not within walking distance of a rapid transit station (though they may be close to
heavily used commuter rail stations).
These estimations provide a "big picture" overview of the penetration of the Corporate Pass
Program among companies in the Boston area. Delving further into program penetration leads to
the next step, which is to examine each of the employers in the program and analyze the program
penetration and usage within each employer.
91
Figure 3.26: Dot Density of Active CharlieCards and All Employers within 0.5 Miles of a Rapid
Transit Station
92
Chapter 4
Corporate Pass vs. Non-Corporate Pass
Usage and Revenue Comparisons
A crucial step in determining the benefits of the MBTA's Corporate Pass Program is to see how the
usage of this pass compares to Non-Corporate Passes. This comparison is between the subscription
Corporate Passes (either obtained through the direct program or third-party administrators) and
monthly passes that are obtained through other means (which include those that are purchased with
vouchers or debit cards, or reimbursed through flex-spending accounts). The a priori expectation is
that since Corporate customers are receiving their passes on a subscription basis, they will be less
likely to cancel the pass when they are on vacation, sick leave or maternity leave, or if they choose
to bike or walk periodically during months of nice weather. This will result in a lower average
usage for the Corporate customers. In addition, if a pass is subsidized by employers through
the Corporate Program, employees may choose to purchase a pass even if they frequently drive,
telecommute, walk or bike to work simply for the other days that they decide to use it to commute
by transit and for nights and weekends. This comparison was done for the months of April through
November 2012, which includes the July 2012 fare increase. This provides an opportunity to see
if the Corporate Pass Program provides insulation to fare increases.
This analysis showed that:
93
"
Both Corporate LinkPass and Corporate Bus pass holders use the MBTA less per month on
average than their Non-Corporate counterparts.
" Though the average Corporate ridership was lower for every month examined, the amount by
which it is lower changes due to seasonal variabilities, with the highest percent differences
occurring in summer and popular vacation months.
" Corporate commuter rail pass holders also tend to have lower usage than Non-Corporate
commuter rail riders, and the percent difference seems to increase even more during summer
months than with LinkPasses or Bus Passes.
" Corporate LinkPasses provide the MBTA with an estimated additional annual revenue of
$4.4 million. The commuter rail revenue could not be estimated, but the additional revenue
is likely to be even greater given the higher fare prices and very low summer usage.
" Corporate Pass unit sales tend not to fluctuate over the course of the year, but Non-Corporate
Pass sales vary along with seasonal variations in pass usage. This provides some indication
that the Corporate Pass Program protects against fare increases, but this was not determined
definitively since there was not a shift in behavior from either type of pass holder in response
to the July 2012 fare increase.
4.1
Usage Analysis Methodology
Using AFC data and a list of the active Corporate Pass CharlieCard holders, the Corporate Pass
users were separated out from other pass holders to compare the usage of each group. Then
the number of CharlieCard tap-ins were summed for each Corporate Pass holder on the list,
and the Non-Corporate AFC data were grouped by serial number and summed for each serial
number. A difference between the Corporate and Non-Corporate customers is that there is no list
of Non-Corporate passes, but rather the Non-Corporate customers are determined by removing
94
the Corporate customers from the AFC data and querying the remaining database. So if a NonCorporate pass holder buys a pass and does not use it, they will not be accounted for because they
will not appear in the AFC transaction data. However, logically it is a fair assumption that if a
person goes to the effort of physically paying for a pass each month, he or she will use that pass
at least once during the month. Therefore, the effects of Non-Corporate LinkPass or Bus Pass
riders with zero usage in a month is assumed here to be negligible. This assertion is not true for
Corporate customers, since they do not have to make a decision to purchase the pass each month,
so those customers who appear on the Corporate CharlieCard list but not in the AFC data actually
have no usage in those months.
An important caveat in this analysis is that the "Non-Corporate" sample contains all passes
that were purchased in any manner other than through the subscription Corporate Pass Program.
This means that employees who purchase a pass with a transportation debit card or voucher, or
are reimbursed through a flex-spending account, are included in the "Non-Corporate" sample.
The comparison in this section, therefore, is not between all employees who are receiving passes
through a commuter benefits program and those who are not. It is comparing the true subscription
Corporate Pass Program to all other passes. Presumably, if the passes purchased through other
pretax means were grouped with the Corporate Passes, the disparity between Corporate and NonCorporate usage would be even greater.
Both sets of data-the AFC transaction records and the list of active CharlieCards-should be
from the same month for the most accurate data possible, as there is some month-to-month turnover
within the Corporate Pass Program (riders enrolling in the program, canceling their passes, or
replacing lost cards). This analysis was first conducted for the months of July and November 2012,
since both the AFC data and Corporate CharlieCard lists from these two months were provided by
the MBTA, and July and November would therefore yield the most accurate results. Comparing
a summer month and a late-autumn month also provides an opportunity to see if the results are
subject to seasonal variability. A list of CharlieCard cancellations in 2012 was also used to attempt
to reconstruct the Active CharlieCard lists for April through June and August through October
95
to study the fare-increase effects. If a card was listed as having been canceled in July 2012,
for example, it was assumed that this card was active during April, May and June. There is no
guarantee that the card was active during all three of these months, but this method provides a
more accurate estimate of usage in these months than simply matching the July cards to the April
AFC data. These months also did not have a higher percentage of zero-usage than in the July and
November results, which suggests that this method is reasonably accurate.
This methodology was conducted for both LinkPass usage and Local Bus Pass usage.
Commuter rail usage on the subway and bus system was also analyzed in this same way to
extrapolate the commuter rail usage.
4.2
LinkPass Monthly Usage
Table 4.1 below shows average monthly unlinked trips for July through November 2012 for both
Corporate and Non-Corporate LinkPass holders. Figure 4.1 also shows the cumulative usage of
both types of LinkPasses for July and November. This figure provides a better understanding of
the distribution of pass usage for each type of pass holder. For each value shown on the y-axis,
that percentage of LinkPass holders have taken less than the indicated number of unlinked transit
trips shown on the x-axis. Conversely, the remaining percentage of LinkPass holders have used the
MBTA for more trips than that value. For example, the Corporate lines cross the 80% of LinkPass
holders threshold at about 60 unlinked trips. This means that 80% of LinkPass holders made 60
or fewer unlinked trips in that month, and that 20% made more than 60 trips. The figure clearly
shows that the usage patterns are very similar for both July and November.
It is clear that on average, Corporate customers are using the pass significantly less than NonCorporate customers even though the MBTA is receiving the same revenue per pass for each type of
LinkPass. The disparity between Corporate and Non-Corporate average usage is slightly larger in
the summer months (June through September) than in May, October or November, which indicates
some seasonal variability. This is to be expected since the summer months not only are more
96
Count
Median
Average
% Difference in Averages
April Corporate*
April Non-Corporate*
May Corporate*
May Non-Corporate*
June Corporate*
June Non-Corporate*
July Corporate
July Non-Corporate
August Corporate*
August Non-Corporate*
September Corporate*
September Non-Corporate*
October Corporate*
October Non-Corporate*
November Corporate
79,987
89,356
78,948
84,543
77,617
80,088
76,934
83,252
78,843
78,378
78,015
88,176
78,852
92,025
79,616
39
48
41
49
39
49
38
48
40
50
37
47
41
51
38
41.1
53.8
43.3
54.9
41.8
54.5
41.4
53.6
42.8
55.7
39.8
52.0
44.0
55.6
41.7
-24%
-21%
-23%
-23%
-23%
-23%
-21%
-20%
November Non-Corporate
90,895
47
52.3
-
*Active CharlieCard list estimated based on canceled passes
Table 4.1: Corporate LinkPass Unlinked Trips vs. Non-Corporate LinkPass Unlinked Trips - July
Through November 2012
conducive to walking and biking, but employees tend to take vacations during these months. The
highest disparity is found in the month of April, potentially because Massachusetts public schools
have a week-long vacation in April and many families choose to vacation during this month. These
seasonal variabilities support the expectation that Corporate pass holders are less likely to cancel
their passes during vacation months.
In July, about 6% of the Corporate LinkPass and 10% of Local Bus pass holders did not use
the pass at all. In November, the percentage of zero-usage customers dropped slightly to 4%
for LinkPasses and 8% for Bus Passes (likely due to the seasonal variability described above).
The other estimated months (April-June and August-October) had a comparable number of riders
with zero usage. Although these zero-usage customers are good for the MBTA (since they are
providing revenue without using the service in return), it is important to note that it is not only
these zero-usage pass holders that make the Corporate Pass Program a special revenue generator
97
100%
-H
90%
80%
70%
60%
July Corporate (Median = 38)
-50%
- -July
Non-Corporate (Median= 48)
-
-
40%
r
if
-November
Corporate (Median =38)
30%
t-
-
November Non-Corporate (Median
47)
20%
10%--0%
-
0
20
40
60
80
100
Number of Unlinked Trips
Figure 4.1: July 2012 and November 2012 Unlinked Trips for LinkPass Users
for the MBTA. Even when these customers are ignored, Corporate usage is still 17-18% lower than
Non-Corporate usage, which means even those that are using the pass are using it less on average.
Using a program created by researchers at MIT, the AFC data for April and May 2012 were
converted into dollar amounts per passenger. This conversion is only available for the months
of April and May 2012. In Figure 4.2, the revenue received for the passes ($59 multiplied by
the number of passes) was compared to the total usage from these LinkPasses. In both months,
the ridership single-ride fare value exceeds the pass revenue for Non-Corporate customers, while
Corporate customers are not using the full value of the pass on average.
Presumably, if the Corporate Pass Program did not exist, a portion of the customers that used
less than the cost of a monthly pass may not purchase a monthly pass, and in that case the MBTA
would only be receiving the single-ride fares from these customers. An estimate of this additional
revenue captured was performed using the revenue received and actual system usage for the month
of May 2012. May is used here to represent a "typical" month, since Table 4.1 shows that the
Corporate usage in May is higher than in summer months or April, and will therefore result in a
98
more reasonable estimate than if April were used.
It was determined that 47% of Corporate customers and 33% of Non-Corporate customers
used less than $59 in equivalent single-ride fare value during the month of May. If the Corporate
Pass Program is ended, then presumably the former Corporate pass holders will exhibit similar
behavior to current Non-Corporate customers, and 33% of the low usage Corporate customers
would continue to buy a monthly pass. The additional revenue that the MBTA is receiving from
the Corporate Pass Program can be estimated by examining the group of Corporate customers who
would otherwise pay per ride.
Since 33% of Corporate Pass holders will continue to buy monthly passes, this means that 14%
(or 11,053) will not purchase a monthly pass but will pay for their transit per ride. This means
that the MBTA will no longer receive $70 per pass from these 11,053 customers, but will instead
receive their actual CharlieCard per ride fares.
The average May usage for Corporate customers who do not use the MBTA enough to reach
the full $59 (prior LinkPass price) in per ride fare values is $30.79. This means that the MBTA is
currently receiving an additional $28.21 on average from each of these 11,053 customers, which
totals to $311,805 for the month of May. This estimate of $311,805 in additional revenue for the
month of May can be converted to an estimated annual additional revenue figure on an ongoing
basis. To account for the fare increase, the $311,805 estimate is multiplied by the ratio of the new
pass value to the old pass value ($70/$59), which results in an estimate of $369,900 in additional
revenue per month.
This results in an estimated $4.4 million in current annual revenue from
LinkPasses alone which probably would not have been collected if the Corporate Pass Program
did not exist.
This estimate is reasonable, though potentially a bit low considering that some of the former
Corporate customers would use even less transit without the benefit of zero-marginal cost which a
monthly pass provides, as well as the already known benefit of automatic monthly renewal. This
estimate does not yet include the similar estimate that could be made for bus and commuter rail
Corporate Pass users.
99
$7,000,00000
$6,437,154
$6,161,309
$6,000,000.00
5,272,004
48,037
$5,000,000.00
$500,00.0
4793792
4,719,233
S450394,657,932
$,8,3
$4,560,33,6
$4,B95,087
$4,000,000.00
m LinkPass Total Usage
$3,000,000.00
E LinkPass Revenue
$2,000,000.00
$1,000,000.00
Corporate
Non-Corporate
Corporate
April
Non-Corporate
May
Figure 4.2: Comparison of April and May 2012 Usage vs. Revenue for Corporate and NonCorporate LinkPasses
In the analyses above, the Corporate group includes all subscription Corporate passes,
including those distributed through third-parties.
This group was investigated further to see if
there was any significant difference in usage between direct customers and those that purchased
monthly passes through a third-party. The results are shown in Table 4.2, and the average usage
is 40.4 unlinked trips for third-party customers and 42.6 unlinked trips for direct customers. It is
difficult to know why third-party providers would have less transit usage per month, as there is little
knowledge regarding the third-party customers due to privacy agreements. This lower usage could
simply be a result of employee or employer characteristics which are correlated with third-party
use, or third-party providers could be directly contributing to lower average usage. For example,
it could be that larger companies tend to use third-party providers and these companies may tend
100
to have lower usage. Or, perhaps the third-parties provide promotional materials to employers and
employees that encourage more infrequent transit riders to join the program. This difference in
ridership amounts to a round trip per month (about $4.00) per user, so it is not insignificant in
terms of the MBTA's annual revenue.
From the limited data available, it was determined that only 12% of employers who use these
two major third-party providers offer a subsidy (as opposed to 38% of employers in the direct
program), so it is unlikely that the cause of this ridership disparity is that the third-parties make
it easier for the companies to offer a subsidy. The data on the number of employees covered by
a subsidy provided by one of the two major third-party programs showed that less than 40% of
third-party employees were covered by a subsidy compared to 80% of employees participating
in the direct Corporate Pass Program. Not enough data was provided to determine the overall
participation rate of these third-party employers (compared to 33% in the direct program), but
that would be an useful to know as well before any decisions can be made on why the third-party
customers have lower MBTA usage on average.
This analysis points out clearly that the MBTA would benefit greatly from increased access to
the third-party data. If the MBTA could investigate why this disparity in ridership is happening,
it may be able to increase the additional revenue that the Corporate Pass Program provides.
Furthermore, the results in Table 4.2 do not necessarily mean that the lower average ridership
is caused by third-party providers, but rather that the two are correlated.
In addition, neither of these groups in Table 4.2 include employees who receive vouchers
or debit cards from third-party benefits providers. Logically, employees who receive commuter
benefits through these other methods would have a higher usage on average than both of the
subscription groups in Table 4.2, since they do not receive the benefits by subscription and must
physically purchase the pass each month. As discussed previously, this means that employees may
not purchase their passes as usual during vacation months, which leads to higher average usage.
However, since these third-party "other" participants cannot be separated from those who are not
receiving a benefit (since they all purchase their passes in the same manner), the third-party "other"
101
April Direct*
April Third-Party*
May Direct*
May Third-Party*
June Direct*
June Third-Party*
July Direct
July Third-Party
August Direct*
August Third-Party*
September Direct*
September Third-Party*
October Direct*
October Third-Party*
November Direct
November Third-Party
Average
Count
% Difference
41.6
39.8
43.7
42.3
42.3
40.5
42.0
39.6
43.5
40.9
40.5
37.9
44.6
42.4
42.5
39.7
58,623
21,364
57,643
21,305
56,634
20,983
56,287
20,647
57,684
21,159
56,400
21,615
57,168
21,684
57,668
21,948
-4%
-3%
-4%
-6%
-6%
-6%
-5%
-6%
*Active CharlieCard list estimated based on canceled passes
Table 4.2: Usage Comparison of Direct Customers to Third-Party Subscription Customers
usage cannot be determined through this analysis. An increased sharing of data and information
between the MBTA and the third parties could lead to a better understanding of this group, at
least for those who use transportation debit cards, since if the MBTA had a list of these debit card
numbers (or at least if they are able to identify them by a unique code), they could anonymously
query the pass purchase transaction database and match these debit cards to a monthly pass.
102
4.3
Monthly Bus Pass Usage
Just like the Monthly LinkPass, the Monthly Bus Pass Corporate and Non-Corporate usage can be
compared using AFC data. Table 4.3 and Figures 4.3 and 4.4 show that similar to the LinkPass
results, the Corporate customers tend to use the system much less than their Non-Corporate
counterparts. Furthermore, the Corporate Bus pass holders on average do not use the pass enough
to exceed the full price of the pass in single-ride fares. Once again, it is clear that the MBTA
is capturing increased revenue by providing the Corporate Pass to these customers who may
otherwise pay per ride.
Table 4.3 shows that seasonable variability exists in average monthly ridership for the
Corporate Bus Pass.
The disparity between Corporate and Non-Corporate riders is greatest in
April and August, with the lowest disparity in October and November.
Count
Median
Average
% Difference in Averages
April Corporate*
April Non-Corporate*
May Corporate*
May Non-Corporate*
June Corporate*
June Non-Corporate*
July Corporate
July Non-Corporate
August Corporate*
August Non-Corporate*
September Corporate*
4,671
6,399
4,423
6,251
4,280
5,938
4,241
6,094
4,407
5,938
4,299
29
43
31
46
30
44
30
44
30
46
29
32.0
51.0
35.0
53.5
33.4
51.5
33.5
52.1
34.3
54.1
32.1
-37%
-35%
-35%
-36%
-37%
-34%
September Non-Corporate*
6,553
40
48.4
-
October Corporate*
4,322
32
35.4
-30%
October Non-Corporate*
7,036
43
50.6
-
November Corporate
4,359
30
33.3
-30%
November Non-Corporate
6,995
40
47.6
*Active CharlieCard list estimated based on canceled passes
Table 4.3: Monthly Bus Pass Usage Comparison of Unlinked Trips: April-November 2012
Figure 4.3 shows a similar patterns to the LinkPass cumulative diagram. There is a strong
103
similarity between July and November Corporate Bus Passes, and both of these usage patterns are
clearly different from the Non-Corporate usage patterns. There is a 4-trip difference between the
July and November Non-Corporate Bus Pass median usage, which was not observed in LinkPasses.
This means that July Non-Corporate pass holders are using their LinkPasses more on average than
November Non-Corporate pass holders. The count of Non-Corporate Bus Passes is also lower in
July, so this is likely an indication that a portion of low-usage July Bus Pass holders are canceling
their passes for the summer months and as a result the remaining usage is higher on average.
100%
90%
80%
-
70%
60%
50%
-
40%
-
-JulyCorporate(Median=30)
-
30%
-
-
20%
July Non-Corporate (Median = 44)
--
November Corporate (Median =30)
--
November Non-Corporate (Median = 40)
-4
0%
0
20
40
60
80
100
Number of Unlinked Trips
Figure 4.3: Local Bus Pass July 2012 and November 2012 Unlinked Trips
104
$350,000.00
$327,718
$322,150
$300,000.00
255,960
250,040
$250,000.00
$200,000.00
-
8--
$186,840
$176,920
a Bus Total Usage
$155,51
$151,395
- Bus Revenue
$150,000.00
$100,000.00
$50,000.00
Non-Corporate
Corporate
Non-Corporate
Corporate
May
April
Figure 4.4: Comparison of April and May 2012 Usage vs. Revenue for Corporate and NonCorporate Local Bus Passes
105
4.4
Monthly Commuter Rail Pass Usage
The usage of commuter rail passes cannot be accurately measured because the commuter rail pass
is shown to a conductor for validation and there is no interaction with the AFC system. However,
commuter rail passes also allow customers free passage onto the subway and bus system with AFC
transactions; the usage of these passes can be observed within the subway and bus systems.
Similarly to the LinkPass and Bus, the AFC usage of Commuter Rail passes shows that the
Corporate Passes have significantly less usage than the Non-Corporate Passes (see Table 4.4).
Unlike CharlieCards, the Commuter Rail tickets have unique serial numbers which identify them
as Corporate or Non-Corporate, so the results are accurate regardless of the month. The July and
November cumulative diagrams are shown in Figure 4.5. Though all months have equally reliable
AFC transaction data for commuter rail pass holders, the months of July and November were
chosen for consistency with the LinkPass and Bus cumulative diagrams.
April Corporate
April Non-Corporate
May Corporate
May Non-Corporate
June Corporate
June Non-Corporate
July Corporate
July Non-Corporate
August Corporate
August Non-Corporate
September Corporate
September Non-Corporate
November Corporate
November Non-Corporate
Count
Median
Average
% Difference in Averages
22,625
10,797
22,160
11,051
21,646
11,494
20,141
10,762
20,774
10,505
21,748
10,719
22,891
10,867
16
20
16
20
14
20
12
20
14
19
19.2
22.8
20.1
22.5
18.3
22.5
16.0
22.5
18.7
23.1
-16%
-11%
-19%
-29%
-
15
18
16
19
18.4
20.9
18.9
21.8
-12%
-
-19%
-
-13%
-
Table 4.4: Commuter Rail Pass Usage in the Subway and Bus System
Table 4.4 also shows that there is a very high spike in the average difference in the month
of July, and that the summer months and April also have much higher percent differences. This
106
result is consistent with the LinkPass and Bus Pass analysis, but is even more exaggerated among
commuter rail riders. This large discrepancy in ridership results from a decrease in usage among
Corporate customers in the summer months. This finding is very positive for the MBTA because
it supports the expectation that Corporate Pass holders on the commuter rail are not canceling
their monthly passes during vacation months, even though their passes are more expensive than
LinkPasses or Bus Passes. This can also be observed in Figure 4.5, which shows that Corporate
commuter rail customers tap into the AFC system a median of 16 days in November but only 12
days in July.
-
100%
r___
II
II
-H-
90%
--
'I
'I
FA
.0
--
t-t
80%
70%
-
60%
Corporate July
(Median = 12)
IA
C
50%
-
0
-
Non-Corporate July
(Median = 20)
40%
U,
-
Corporate November
(Median = 16)
30%
-
20%
I
-
Non-Corporate November
(Median = 19)
i
10%
0%
0
10
20
30
40
50
60
Unlinked Trips
Figure 4.5: Commuter Rail Pass Usage on
Bus and Subway Services
Even though the actual commuter rail usage cannot be measured, it can be roughly estimated
based on the assumption that commuter rail customers who are using their passes in the subway
and bus systems are also using the commuter rail on those days to get into the subway and bus
107
system. Since there are customers who may use the pass on the subway or bus occasionally, but
not necessarily on their normal commute, there will be customers who actually use the pass much
more than is indicated by their subway use. However, if it is assumed that this percentage of
customers is the same for both Corporate and Non-Corporate customers, then although both the
Corporate and Non-Corporate totals will be lower than the actual value, they should be able to be
reasonably compared. This comparison is shown in Figure 4.6 as the average monthly usage within
the AFC system in days from April through November 2012. The individual months all showed
a similar pattern, and these charts can be found in Appendix F. For all passes except for the Zone
1A pass, average Non-Corporate usage exceeds Corporate usage which supports the theory that
in general Corporate customers are using the system less often than Non-Corporate customers,
regardless of the origin of the trip.
The Zone 1A pass is the same price as a LinkPass, and it includes access to the subway and bus
system (as with all commuter rail passes). It also include access to six commuter rail stations that
the subway does not access, but that are located as close to the CBD as some subway stations
(Massachusetts Bay Transportation Authority, 2012a).
One theory as to why Corporate Pass
ridership is higher for this pass is that employers may have extra Zone 1A passes on hand that they
give to new employees who want a LinkPass or employees who lost a pass. Since the Commuter
Rail passes do not need to be re-activated or deactivated (they are only good for one month), they
are good in a pinch for these employers. This would mean that those Corporate Customers would
be using the Zone 1A pass in the central subway system much more frequently. Furthermore, the
former assertion that an AFC transaction from a commuter rail customer must correspond with a
commuter rail trip for that day may not apply for Zone IA customers, who could be located within
an easy driving or biking distance from the subway. On nights and weekends when the commuter
rail is less frequent, these customers may choose to travel to or from the subway via other means.
Therefore Zones 1 through 8 are a better indication of the projection of commuter rail usage by
Corporate and Non-Corporate pass holders. For these latter zones, the average usage of Corporate
passes appears to be roughly 88% of Non-Corporate pass usage on Commuter Rail.
108
16
m Corporate
0 Non-Corporate
14
12--
10
4A
b'
8
6
a
h.
4
2
0
Z
Avg. Corporate Count
Avg. Non-Corp. Count
Zone 1 Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8
2,156 1,804 3,375 3,364 3,189
777 1,810 1,841 1,588
861
1,727 3,075 1,464 1,661
796
1,558 790
896
Figure 4.6: Comparison of Commuter Rail Pass Usage on Buses and Subways
4.5
Fare Increase Effects: Revenue and Usage Over Time
The July 2012 fare increase presents an interesting opportunity to observe the differences in the
sales and usage of the Corporate Pass Program both before and after the fare increase compared to
those of the Non-Corporate Pass.
4.5.1
Pass Sales Over Time
The following data is taken from the sales records of the MBTA from January 2012 to December
2012. Each month represents the total sales from the 15th of the previous month to the 15th of
the current month, which represents passes that are active during the current month. For example,
the February data are sales that were made between January 15 and February 15 for passes that
109
were active in February. In all three cases the Corporate Pass revenue remains relatively steady
over time, even leading into and after the July 2012 fare increase, while Non-Corporate Passes
fluctuated over the course of the year. This is most pronounced with the LinkPass users, which
has a Corporate maximum value that is only 2,772 units (or 3.6%) higher than the minimum and
a Non-Corporate maximum that is 10,620 units (or 18%) higher than the minimum. This steady
revenue stream, even in the midst of a fare increase, indicates that the Corporate Pass Program may
have increased insulation to fare increases as well as other seasonal changes. The steady monthly
revenue stems from the fact that the Corporate Pass Program is a subscription service, where it
is not as convenient to cancel a pass during months of low usage and the convenience of keeping
the pass seems to outweigh the monetary savings of canceling the pass for these months for most
Corporate pass holders.
90,000
80,000
70,000
60,000
50,000
4A)
-+-Corporate
9
40,000
-
Non-Corporate
- - July Fare Increase
30,000
20,000
10,000
0
0
"
p
Figure 4.7: 2012 LinkPass Unit Sales
110
7000
6000
5000
- 4000
-Corporate
3000
--
Non-Corporate
-
- July Fare Increase
2000
1000
0
Figure 4.8: 2012 Monthly Bus Pass Unit Sales
35,000
30,000
25,000
-020,000
-+-Corporate
-
15,000
Non-Corporate
- - July Fare Increase
10,000
5,000
0
Fe
Figure 4.9: 2012 Commuter Rail Pass Unit Sales
111
4.5.2
Usage Over Time
The usage of passes both before and after the fare increase can also be estimated. As mentioned
earlier in this chapter, the usage each month can be estimated using the Active CharlieCard lists
from July and November 2012 along with the list of canceled passes in 2012. The AFC data from
April through June was used for the "before" data, and the AFC data from August through October
was used for the "after" data.
Figures 4.10 shows that the average monthly Corporate LinkPass usage oscillates slightly from
month to month but does not show any major changes in response to the fare increase. Furthermore,
the Corporate Pass pattern of usage corresponds to the Non-Corporate usage, which suggests that
the month-to-month variations in usage are not a result of the type of pass (Corporate or NonCorporate), but rather other factors such as the presences of holidays or the weather in a given
month. The difference is that, as shown in Section 4.5.1, the Corporate Pass revenue stream is
constant, while the Non-Corporate revenue stream tends to oscillate along with usage. Though
in 2012 it appears that neither type of customer, Corporate or Non-Corporate, changed their
pass purchase or transit usage habits in response to the fare increase, this research shows that
the Corporate customers are less likely to cancel their subscription based on outside influencing
factors (such as seasonal variations). If in the future a fare increase does influence behavior for
Non-Corporate Customers, it follows logically that the Corporate customers would be less affected.
Figure 4.11 shows the same monthly usage comparison for Local Bus Pass holders.
The
difference between Corporate and Non-Corporate Bus Pass usage is not as consistent throughout
the year as the LinkPass usage shown in Figure 4.10. In fact, Non-Corporate usage drops steeply
in September while Corporate usage does not. This could be the result of the fare increase, though
the drop in usage is delayed by two months. Regardless of the reason, the Corporate Pass holders
kept a more consistent usage during this period of time showing greater insulation to whatever
outside factors caused the drop in Non-Corporate usage.
The percent differences in usage (calculated as average total unlinked trips per month) shown
in Table 4.5 can be divided by the percent differences in fare increase to determine the comparative
112
60
50
12.7
11.6
12 7
12.3
12.8
12.2
11.6
10.6
40
0.
I*0
C
30
-.-
Corporate LinkPass
-4-Non-Corporate LinkPass
-
- July Fare Increase
20
10
0
zlz
z
49
Figure 4.10: LinkPass Usage Before and After Fare Increase
60
50
40
30
Corporate Bus
+
Non-Corporate Bus
- -July Fare Increase
20
10
0
4'
'~'
';~
\
o.
0*
~
Figure 4.11: Bus Pass Usage Before and After Fare Increase
113
Before
After
% Difference
Corporate
3,317,107
3,290,557
Non-Corporate
4,605,840
4,657,535
0.8%
-1.1%
Table 4.5: Average Monthly Total LinkPass Trips Before and After the July 2012 Fare Increase
price elasticities.
For Corporate LinkPass holders, the price elasticity is +0.04 (0.8% change
in ridership divided by the price increase of 18.6%), and for Non-Corporate LinkPass holders
it is -0.06.
Corporate ridership actually increases despite the fare increase, and Non-Corporate
ridership decreases only slightly compared to the standard Simpson-Curtin transit fare elasticity of
-0.33.
This speaks to the insulation that passes in general can provide to transit agencies against
fare increases.
Before
After
% Difference
Corporate
No n-Corporate
149,186
145,855
322,273
329,102
-2.1%
2.2%
Table 4.6: Average Monthly Total Bus Pass Trips Before and After the July 2012 Fare Increase
The results in Table 4.6 show that the price elasticity for Corporate Bus Pass holders is +0.11
(2.2% divided by the 20% decrease in bus pass price), so there was also an increase in ridership
after the fare increase among Corporate Bus Pass holders as well. The Non-Corporate Bus Pass
holders have a price elasticity of -0.11,
which is the most negative of all four groups observed
but still less elastic than the standard -0.33 price elasticity. It is important to note, also, that the
before-and-after data does not necessarily compare the usage of the same people before and after
the fare increase. The negative Non-Corporate elasticity and positive Corporate elasticity could be
explained by customers switching into the Corporate Pass Program.
This analysis gives some indication that the Corporate Pass Program may provide insulation
against fare increases, but this cannot be stated conclusively since monthly sales did not seem to
decline for either group in light of the price increase, and the price elasticity for the few months
measured may also be influenced by normal seasonal ridership variations. These results would
114
need to be compared to data from the same months in previous years with an absence of a fare
increase for more conclusive results.
4.6
Summary of Corporate vs.
Non-Corporate Usage and
Revenue
The analysis in this chapter shows that the Corporate Pass program is a benefit to the MBTA. Both
Corporate LinkPass holders and Corporate Bus Pass holders tend to use the MBTA significantly
less on average than their Non-Corporate counterparts. Additionally, the number of Corporate
Passes sold is consistent over the course of the year while Non-Corporate pass sales tend to
fluctuate, which results is greater amounts of additional revenue captured in the summer months.
The estimated additional revenue captured from Corporate LinkPass customers is over $4.4
million.
Considering that the Non-Corporate customers include employees who are receiving
transit benefits through other means, the actual benefits to the MBTA from employer transit
incentives is even higher. Finally, monthly commuter rail usage is difficult to measure since fares
are not paid through AFC transactions as with bus and subway. However, the commuter rail pass
usage on the bus and subway AFC system indicates that (for all commuter rail pass types other than
Zone 1A) Corporate commuter rail pass holders are using the pass less often than Non-Corporate
pass holders. Since commuter rail pass and single-ride fare prices are higher than both subway and
bus fares, this likely results in even greater additional revenue for the MBTA for each Corporate
pass holder.
115
116
Chapter 5
Effects of Employer Benefit Policies and
Other Characteristics on Employee
Participation and Usage
Employer characteristics,
determined from the employer practice survey, were examined
individually and combined using a multivariate regression analysis to determine if and how each
factor may influence employee participation and usage. With this information, the MBTA will
better understand their current Corporate customers, and can target their marketing to existing or
new Corporate customers or make strategic modifications to the program accordingly.
5.1
Participation of Employees
The participation rate for a company is the number of employees enrolled (i.e., buying monthly
MBTA passes) in the Corporate Pass Program divided by the total number of employees at that
company. This section examines several employer characteristics and their effects on companies'
participation rates.
117
5.1.1
"
A Priori Expectations
Distance from City Center: As the distance from the city center increases, the transit
accessibility decreases and so participation is expected to decrease.
" Distance from Transit: As distance to a subway, bus, or commuter rail station increases,
participation is expected to decrease.
" Location in Cambridge: The City of Cambridge has a Parking and Transportation Demand
Management (PTDM) Ordinance in place to reduce the levels of single-occupancy vehicle
travel and parking in the city. In theory, one would expect a PTDM Ordinance to increase
participation rates because it requires employers to uphold a certain level of commitment to
commuter benefits, which would in turn be reflected in higher employee participation.
" Pretax Availability: Companies that offer the passes through pretax payroll deduction will
likely have higher participation rates.
Not only do pretax benefits provide an effective
discount, but the automatic monthly or weekly payroll deduction itself is a convenient benefit
for the employee which allows them to not have to think about ordering and paying for a pass
each month.
" Subsidy: It is expected that larger subsidies will lead to greater participation rates. The
highest subsidies will attract those who use transit even occasionally, as long as they are
located in a transit-accessible area.
" Parking Availability: Employees with on-site parking available will be less likely to
participate because on-site parking is convenient for single-occupancy drivers. This added
convenience may be enough to dissuade a commuter from using transit.
* Parking Subsidy: A high parking subsidy is expected to decrease participation. However,
since there is only a limited amount of data for this variable, the sample size resulting from
including it will be relatively small.
118
"
Size: According to the literature, participation should be higher in larger companies because
these companies tend to have employees dedicated to administering and possibly even
recruiting for the program. However, there may also be some adverse selection where small
companies join the program because they have employees who already are committed to
taking transit. Therefore the size effects are not clear.
" Industry Type: On its own, industry classification is not likely to have much of an effect
on participation. Perhaps it could be correlated somewhat with employee income, or more
likely the size of the company and parking availability. However, the a priori expectations
are not clear. Industry is included in this analysis simply to investigate the possibility of an
influence on employee participation.
5.1.2
Employer Characteristics at a Glance
Before analyzing all of the above characteristics using a regression model, they were first examined
individually.
Distance from City Center
The distance from the CBD was considered first, as distance to the city center is expected to be
a major influencing factor since it is an indicator of transit accessibility. Employees who work
in downtown Boston have access to all four subway lines, the Silver Line, commuter rail, and
many bus routes. As distance from the CBD increases, even if a company is located very close
to a transit station, the accessibility to multiple branches of the system is decreased and therefore
transit accessibility to regional home locations is decreased.
119
100%
90%r
80%
70%60%
50%
E
E
-<0.5 Miles (count = 201)
40%
-
0.5 - 1 Miles (count= 73)
1-2 Miles (count= 109)
30%-2-5
20%
Miles (count= 93)
>5 Miles (count= 50)
---
-
10%
0%
0%
10%
20%
30%
60%
40%
50%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.1: Employee Participation Rate by Distance to CBD
The participation cumulative frequency diagrams for employers within 0.5 miles, 0.5 to 1 mile,
1 to 2 miles, 2 to 5 miles, greater than 5 miles of the CBD were plotted, measured from Government
Center Station. Figure 5.1 shows strongly that as distance to the CBD increases, participation
decreases. This is clearly represented by the median participation rates for each of these distance
categories. The median participation rate for the employers within one half mile of the CBD is
almost 60%, and as distance to the CBD increases the median participation rate drops accordingly.
Even in the next 0.5 miles, the median participation rate drops to 46%, and the median continues to
fall to 40% in the 1 to 2 miles range, 32% in the 2 to 5 mile range, and only 24% in the companies
that are further than 5 miles from the CBD.
Distance from Transit
Next, distance from subway stations, bus stops or commuter rail stations were considered. Each of
these three categories (subway, bus and commuter rail) was divided into those employers that are
withing one-quarter mile, one-half mile, and those that are farther than one-half mile. Commuter
120
rail was deemed to have little to no significance, since many commuter rail stations where the
great majority of employers are located also serve as bus and/or subway stops. The remaining
categories, bus and subway, were examined exclusive of one another. Figure 5.2 below shows the
cumulative frequency diagrams of all 372 employers within 0.25 miles of a subway station, the 59
within 0.25 miles of a bus stop but not a subway station, and the 95 that are greater than 0.25 miles
away from either type of transit station. The figure shows that the employers within 0.25 miles of
a subway station tend to have higher participation rates than those within 0.25 miles of bus stops
only. Furthermore, it seems that employers that are further than 0.25 miles from both a bus stop
and a subway station have slightly higher participation rates than those within 0.25 miles of bus
stops only. Employers within 0.25 miles of a bus stop only have a median participation rate of 33%,
while those further from both have a median of 35% participation. This shows that employers that
are further than 0.25 miles from a subway station may still have better transit accessibility than
those within 0.25 miles of a bus stop but not a subway station. Employers within 0.25 miles of a
subway station have a much higher median participation rate of 50%.
100%
90%
80%-
-
70%
-Within
-
E
40%
0.25 Miles of Subway
(count= 372)
Within 0.25 Miles of Bus
(not Subway) (count = 59)
4>0.25 Miles from Either
(count= 95)
30%
20%
0%
0%
10%
20%
30%
60%
50%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.2: Participation Rate within 0.25 Miles of Bus or Subway
121
Next, the radius was increased to 0.5 miles for each type of station in Figure 5.3. Once again,
those close to the subway have the highest participation rates. There is not a clear difference
between those within 0.5 miles of a bus stop and those that are further than 0.5 miles from both.
The median value for employers within 0.5 miles of only bus stops is a bit lower than those further
then 0.5 miles from both (20% and 22% respectively). The median participation rate for those
within 0.5 miles of a subway station is much higher, at 46%.
These two figures clearly show that the participation rate is strongly correlated with distance
from subway stations, but not bus stops.
100%
90%
80%
70%
-
60%
-Within
50%
-(count=
E
-
0.5 Miles of Subway
465)
Within 0.5 Miles of Bus
(Not Subway) (count= 27)
->0.5
Miles from Either
(count 34)
30%
-
20%
10%-
--
-
-
-
20%
30%
0%
0%
10%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.3: Participation Rate within 0.5 Miles of Bus or Subway
Figure 5.4 shows the cumulative frequency diagram of employers within 0.25 miles of a subway
station and 0.5 miles of a subway station. Employers within 0.25 miles of a subway station exhibit
higher participation rates than those between 0.25 and 0.5 miles of a subway station, except in the
extremes (above 84% participation and below 30% participation) where they seem to follow a very
similar pattern. At non-extreme participation rates they are quite different, however, and employers
within 0.25 miles of a subway station have a median participation rate of 50% while those in the
122
0.25 to 0.5 mile range have a median participation rate of 38%. Employers further than 0.5 miles
from a subway station show much lower participation rates, with a median of 22%.
100%
90%
80%
70%
60%
E
50%
-W
ithin 0.25 Miles (count= 372)
-(0.25
40%
-0.5] Miles (count= 93)
-- >0.5Miles (count
61)
30%
20%
10%
0%
0%
10%
20%
30%
60%
50%
40%
Employee Participaton Rate
70%
80%
90%
100%
Figure 5.4: Participation Rate within 0.25 and 0.5 Miles of Subway Station
Location in Cambridge
Initially, employers in Cambridge were compared to all other employers, and participation was
found to be negatively correlated with a location in Cambridge (see Figure 5.5).
This is not
surprising, however, when one considers that Cambridge is further from the Boston central business
district (CBD), and thus its employers have a somewhat lower accessibility to transit compared to
downtown Boston companies. The relationship shown in Figure 5.5 is dominated by distance
effects instead of accurately reflecting the effects of the PTDM Ordinance. In Figure 5.6, only
employers located between 1 and 6 miles from the CBD are compared. In this way, Cambridge
employers are only being compared to other non-Cambridge employers located the same distance
from the CBD. However, there appears to be no clear difference between the participation rates
of employers in Cambridge and other employers within 1 to 6 miles of the CBD. This analysis
123
shows that although the ordinance is certainly not counter-productive in terms of participation rate,
it does not have a clear positive effect on participation either. This may indicate that either the
effect of the PTDM is reduced by greater parking availability in Cambridge, or it may indicate that
although employers are complying with the PTDM by subsidizing MBTA passes, they may not be
aggressively advertising and promoting the program to their employees.
100%
90%
80%
70%
60%
E
50%
40%
-Cambridge
(count= 72)
-Elsewhere
(count= 454)
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.5: Participation Rate by Location in Cambridge or Elsewhere
124
100%
90%
80%
70%
60%
50%
-
--
-
EU
-Cambridge
-Elsewhere
(count = 67)
(count= 146)
40%
30%
20%
10%----0%
0%
10%
20%
30%
60%
50%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.6: Participation Rate by Location in Cambridge or Elsewhere (1-6 Miles from CBD)
Pretax Availability
The survey responses were divided into two categories: those that offer the pass pretax and those
that do not. If a company offers a 100% subsidy, they were included in the pretax category since
the price of the free pass is not being added to their taxable income. There were only 18 companies,
or 3%of all companies, that do not offer the pass pretax by this definition. The participation rates
for each group were plotted in Figure 5.7, which shows that the pretax employers have higher
participation rates in general, even though the sample of non-pretax employers is very small.
Employers who offer the pass pretax to their employees have a median participation rate of 44%,
as opposed to 40% in companies that do not offer pretax payroll deductions.
Considering the effects of pretax availability, it is logical to assume that an additional employerprovided subsidy would also increase participation, since pretax availability is essentially a type of
subsidy.
125
100%
90%
80%
70%
60%
E
-Pretax
50%
-Not
(count= 508)
Pretax (count = 18)
40%
30%
20%
10%
%j
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.7: Participation Rate by Pretax Availability
Employer Subsidy
The subsidies provided by employers and reported in the surveys were divided into six groups:
* No subsidy
* 25% or less
* Greater than 25% and less than or equal to 50%
* Greater than 50% and less than or equal to 75%
* Greater than 75% and less than 100%
* 100% subsidized
The participation rates for these six categories are plotted in Figure 5.8.
The figure does not
show anything conclusive about the relationship between participation rate and relative subsidy
level, so the categories were simplified to the existence of any subsidy and no subsidy to identify
126
if a subsidy of any level has an effect on participation. It appears that the existence of a subsidy
increases participation at companies where the participation rate is above 55%. These data indicate
that employers with high transit accessibility and already high participation rates may be able to
increase participation further by offering an employer subsidy. Of the 170 employers who are
located within 0.5 miles of a subway station and indicated on the survey that they have greater
than 55% participation (but less than 100%), 58 employers offer a subsidy. This shows that there is
some potential for these companies to increase participation even further with an employer subsidy.
Also, Figure 5.8 shows a similar pattern between employers with no subsidy and employers with
100% subsidy. This indicates that very high subsidies could be drawing even occasional transit
users into the program.
Contrary to what was expected, the existence or level of subsidy does not appear to have a
significant effect on an employer's participation rate. This does not mean that subsidy levels have
no bearing at all on participation, but rather that other characteristics seem to have a much larger
effect. This may be due to the fact that many companies offer mutually exclusive benefits that
force an employee to choose between driving or taking transit. So although a transit subsidy is a
benefit to employers who were already willing to take transit, it will not be enough to sway regular
drivers who are also getting an equivalent or better parking subsidy. The fact that almost all of
employers offer a pretax benefit also means that effectively almost all employees are receiving at
least some amount of subsidy which varies based on their pass type and tax level. Since pretax
benefits can be as high as 40% of the value of a pass, this could diminish the effect of additional
employer-provided subsidies on participation.
127
100%
90%
80%
70%
60%
-5
50%
40%
-No
Subsidy (count= 322)
-(0-25%]
30%
20%
(count =47)
-(50-75%]
(count = 16)
-(75-100%)
(count= 4)
--
10%
(count= 16)
-(25-50%]
100% Subsidy (count = 121)
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.8: Participation Rate by Subsidy Amount
100%
90%
80%
70%
60%
E
-Subsidy
50%
-No
(count= 204)
Subsidy (count = 322)
40%
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
Figure 5.9: Participation Rate by Existence of Employer Subsidy
128
100%
Parking Availability at Employers
Parking availability is one of the characteristics that is likely to have a large enough effect on
participation to outweigh subsidies of transit passes. If there is no parking available, then there is
a larger incentive for employees to find alternative means of transportation.
Parking availability was divided into six groups:
" No Parking Available
" Parking for greater than 10% of employees and less than or equal to 25% of Employees
" Parking for greater than 25% of employees and less than or equal to 50% of Employees
" Parking for greater than 50% of employees and less than or equal to 75% of Employees
" Ample Parking
* Unknown Amount
To clarify, the "No Parking Available" category as defined here includes those who indicated
that parking was for executives only, or that only 10% of employees or fewer had parking available.
"Ample Parking" includes those who self-identified as having "ample parking" as well as those
who have enough parking available for greater than 75% of their employees. Finally, "Unknown
Amount" includes all employers that indicated that they did in fact have on-site parking available,
but were unsure of the number of parking spaces.
The data provided in Figure 5.10 shows that there is a big difference between companies who
do not have parking and those who do, but there is not a significant difference between the different
levels of available parking. To simplify, Figure 5.11 combines all of the categories that represent
some amount of on-site parking.
As expected, there is significant difference between the participation rates of the companies
that do not have parking available and those that do. In fact, the median participation rate for those
without parking is 55% while companies with parking have only a 30% median participation rate.
129
100%
90%
80%
-
70%
60%
Ti 50%
E
-No
-
Parking (count= 347)
- (10%-25%] (count = 24)
40%
(25%-50%] (count = 42)
30%
--
-
(50%-75%] (count= 23)
-Ample
Parking (count= 67)
Unknown Amount (count = 23)
20%
10%
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.10: Participation Rate by Parking Availability
100%
90%
80%
-
70%
60%
- 50%
E
No Parking Available (count 347)
-Parking
Available (count= 179)
40%
30%
20%
-
10%
-
0%
0%
10%
20%
30%
40%
50%
60%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.11: Participation Rate by Parking Availability (Yes or No)
130
Parking Subsidy
There was significantly less data reported for the question about whether or not parking was
subsidized (data from 383 employers as opposed to 526 employers for all other characteristics
analyzed in this section). Furthermore, even if parking was subsidized it was often by a flat amount
and the total cost of parking was not reported. Therefore, there are only three categories of parking
subsidy that can be analyzed with any confidence: no subsidy, 100% subsidy (or free parking),
and any other subsidy amount reported. It is clear in Figure 5.12 that parking subsidy level has an
effect on participation rate. Parking subsidy actually seems to have a more substantial impact on
Corporate Pass Program participation than the availability of Corporate Pass subsidy itself. The
likely reason for this is that commercial parking in the Boston area usually costs much more per
month than transit, so even if a company subsidizes parking and transit by equal percentages, the
parking subsidy will be much greater in terms of dollar value.
100%
...
90%
80%
70%
50%E
Free Parking (count= 103)
4
Partially Subsidized Parking (count =56)
30%
f
20%
-No
Parking Subsidy (count= 224)
10%0%
0%
10%
20%
30%
60%
50%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.12: Participation Rate by Parking Subsidy
The decrease in participation when free parking is available is clear in Figure 5.12.
The
relationship between partial parking subsidies seem to fall roughly between free parking and full-
131
priced parking as expected. Employers with free parking have a median of only 32% participation
in the Corporate Pass Program, while those who partially subsidies have a median of 40%
participation and those who do not subsidize parking have a 47% median participation rate.
Size of Employer
Company size, measured by total number of employees, was broken into nine groups using natural
breaks. The cumulative diagram was plotted for each of these groups, shown below in Figure
5.13. Two observations can be made from this figure: the first is that in general as the size of
the company increases, participation tends to decrease. The other is that this relationship becomes
clearer when some size groups are combined. Figure 5.14 below shows the same analysis with the
similar size groups from the previous analysis combined. The second combined analysis is a more
even distribution of the number of companies since it combines some of the smaller groups into
larger, more evenly distributed groups. The final group, ">1000 Employees" has a much smaller
number of companies but since these results are so unique it was kept separate.
100%
90%
10 or Fewer Employees (count =
87)
80%
11-25 Employees (count= 124)
70%-
-
26-50 Employees (count 115)
60%
-51-75
a.50%
-
-
E
40%
-
30%
-151-500
--
10%
76-100 Employees (count= 34)
101-150 Employees (count= 31)
-
20%
Employees (count= 41)
Employees (count = 60)
-501-1000
-
-
Employees (count =14)
>1000 Employees(count= 20)
0%
0%
20%
80%
60%
40%
Employee Participation Rate
100%
Figure 5.13: Participation Rate by 9 Company Size Categories
132
100%
90%
80%
70%
60%-Ti 50%
E
-25
or Fewer (count= 211)
-26-75
Employees (count= 156)
Employees (count = 139)
-76-1000
->1000
Employees (count = 20)
30%
20%
10%
0%
0%
10%
20%
30%
60%
50%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.14: Participation Rate by 4 Company Size Categories
This analysis shows that, when all other known employer characteristics are ignored, size does
seem to play a role in employer participation rate and the relationship is counter to the a priori
expectations. This may indicate that larger companies have more access to parking, which will be
examined independently as well, or it could indicate that size alone has an effect on participation
rates. To determine whether size is merely a reflection of parking availability, Figure 5.14 above
was recreated but only for those companies that do not offer parking and then again for only those
companies that do offer on-site parking. The results can be seen in Figures 5.15 and 5.16 below.
The pattern of increased size leading to decreased participation is true even among only those
companies who do not offer parking. Among those who do offer parking, the trend is weaker but
the larger companies still have slightly lower participation rates, though there is significantly more
overlap. Since there are almost twice as many employers without parking than with parking, it is
not surprising that the pattern which emerges among those who do not offer parking dominates
when those who offer parking are added back into the sample.
The correlation between location and size was also examined, to see if perhaps this result may
133
100%
90%
80%
70%
60%
J,
T 50%
E
40%
-25
30%
or Fewer (count= 168)
-26-75
Employees (count= 106)
76-1000 Employees (count = 68)
20%
->1000
10%
,
0% - I_.
0%
Employees (count = 5)
--j
-
_ I.
10%
20%
30%
50%
60%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.15: Participation Rate by 4 Company Size Categories Among Companies with No OnSite Parking
100%
90%
80%
70%
60%
-25
E
50%
or Fewer (count = 43)
-26-75
Employees (count = 50)
-76-1000
40%
->1000
Employees (count = 71)
Employees (count= 15)
30%
20%
10%
0%
09
10%
20%
30%
50%
60%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.16: Participation Rate by 4 Company Size Categories Among Companies with On-Site
Parking
134
be due to the fact that larger companies are located further from transit or further outside the
city center. As previously determined, distance from a subway station and distance from the city
center are both negatively correlated with participation rate. When size is matched with distance
from subway stations, there is a very weak positive correlation (correlation coefficient = 0.008).
Similarly, when size is matched with distance from the CBD the correlation coefficient is very weak
(0.175), so there is little reason to believe that location is influencing this result. For completeness,
the cumulative frequency diagrams were also plotted again for only those employers located within
0.5 miles of a subway station (Figure 5.17), and between 0.5 and 1 miles of the CBD (Figure 5.18),
and the results remained unchanged-size continues to be negatively correlated with participation
rate.
100%
90%
70%
60%
E
30%
25 or Fewer (count= 199)
-26-75
20%
Employees (count= 138)
76-1000 Employees (count = 114)
->1000 Employees (count= 14)
10%
0%
0%
10%
20%
30%
60%
50%
40%
Employee Participation Rate
70%
80%
90%
100%
Figure 5.17: Participation Rate by 4 Company Size Categories Among Companies within 0.5 Miles
of a Subway Station
This result is contrary to previous literature assertion that larger companies may have larger
participation rates because they have large human resources departments with personnel dedicated
to administering and possibly even recruiting for the program. It appears that size has an opposite
effect, however, and perhaps even with the presence of a dedicated program administrator, the
135
100%
90%
80%
70%
60%
E
50%
-25
40%
30%
or Fewer (count =130)
26-75 Employees (count = 85)
-76-1000
->1000
Employees (count = 57)
Employees (count= 2)
20%
10%
0%
0
0.2
0.4
0.6
0.8
Employee Participation Rate
1
1.2
Figure 5.18: Participation Rate by 4 Company Size Categories Among Companies Between 0.5
and 1 Miles of CBD
program is "falling through the cracks" at these larger companies. Promoting a program may
be much easier when the target audience is only a small company, but advertising the program
to employees of a large company may require more effort. By providing marketing tools, such
as brochures and a more comprehensive website, the MBTA may be able to help these larger
companies promote the Corporate Pass Program to their employees. This may also be explained
by the fact that some of the smallest companies may simply be joining the program in response
to the fact that a large portion of their employees already take transit regularly. For example, a
company of five employees with four regular transit riders could decide to join the program as
a benefit to these four employees, and that company will have an 80% participation rate. This
assertion is supported by the finding in Section 3.1.5 that the percentage of very small companies
in the Corporate Pass Program is much smaller than the percentage of companies of the same size
in Suffolk, Norfolk and Middlesex counties. This suggests that larger companies are joining the
program more readily, and smaller companies need more motivation to join the program-such as
high demand for the program from employees. Smaller companies will also likely recruit from a
136
smaller area, and transit is a more viable option for nearby employees.
Industry Classification
Although the literature suggested that industry may influence participation, when participation was
plotted by North American Industry Classification System (NAICS) industry, there was no clear
distinction between industry groups. Since there are so many other factors being considered in this
analysis, the differences in industry seem to be relatively insignificant. As a result, industry type
has been omitted from further investigation.
5.1.3
Examining the Combined Effect of Employer Characteristics on
Employee Participation
An examination of the combined effects of the various employer characteristics was undertaken
using a multivariate regression model to determine the relative significance of each variable. A
binomial model was chosen since participation rate is restricted between 0% and 100%. All of
the characteristics available for the full sample listed above were included in the first iteration.
Then, another regression was performed excluding parking subsidy since including that variable
greatly reduces the number of data points. The results for both analyses are shown below, and
other iterations are shown in Appendix G.
The adjusted R-squared for the first model (which excludes parking subsidy) is 0.39, which
indicates that the included explanatory variables only weakly explain the variation in employee
participation of the full sample. This is because there are some other benefits policies and employer
characteristics that were not analyzed above, such as company culture or how long an employer
has been participating in the Corporate Pass Program (this was asked in the survey but only a
very small sample of reliable data was collected). Additionally, the characteristics of individual
employees are not examined at all here, and they are likely to influence participation in the program
significantly as well. However, regardless of the adjusted R-squared and other possible variables,
the results are consistent with the analyses of the individual characteristics.
137
Variable
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy >0% and <25%
Subsidy >25% and <50%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Estimate
0.252
0.189
0.133
0.089
0.048
0.080
0.030
0.003
0.091
0.057
0.163
0.127
-0.150
-0.069
-0.129
-0.208
Std. Error Significance
0.062
0.029
0.033
0.028
**
0.037
0.037
*
0.052
0.028
0.047
0.051
0.027
0.022
0.022
0.020
0.022
0.049
***
Significance codes: 0 to 0.001 = ***, 0.001 to 0.01 = **, 0.01 to 0.05 = *, 0.05 to 0.1 = .
Table 5.1: Participation Regression Results - Excluding Parking Subsidy
When the regression is repeated with the smaller sample that includes data for parking subsidy,
the results are largely consistent with the previous model. The adjusted R-squared for this model
is 0.35, which is only slightly lower than the previous regression model. This means that despite
the smaller sample size, the variables are explaining the variation in employee participation to a
similar degree.
138
Variable
Estimate
Std. Error Significance
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
0.316
0.168
0.119
0.077
0.022
0.055
-0.024
0.027
0.075
0.035
0.039
0.031
0.041
0.041
0.059
0.032
Pretax
Subsidy >0% and <25%
Subsidy >25% and <100%
0.063
0.048
0.149
0.060
0.070
0.034
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
0.121
-0.122
-0.064
-0.119
-0.211
-0.058
-0.027
0.026
0.027
0.025
0.026
0.061
0.028
0.035
**
*
***
*
*
Significance codes: 0 to 0.001 = ***, 0.001 to 0.01 = **, 0.01 to 0.05 = *, 0.05 to 0.1 =.
Table 5.2: Participation Regression Results - Including Parking Subsidy
5.1.4
Participation Results
In general, the regression analysis shows that:
" Distance to CBD: Participation increases as distance to the CBD decreases. This result is
found in both regression models. The strongest correlation exists among companies that are
within 0.5 miles of the CBD, and this variable is highly significant. Companies within 0.5
and 1 mile, and companies within 1 and 2 miles are also highly significant and positive.
In general, as distance to the CBD increases, the value of the variable and the significance
decrease. The "at a glance" analysis also supports this result, as the participation rates shown
in Figure 5.1 are largest closer to the CBD, and the participation rates decrease with each
further distance.
" Distance to Transit: Participation increases for employers within 0.5 miles of a subway
139
station in both regression models above, and in the "at a glance" analysis.
In the first
regression analysis, proximity to bus stops also has a positive influence on participation
rate, though this coefficient is smaller than the coefficient for proximity to subway. This
indicates that participation rate is not increased quite as much by proximity to a bus stop.
The second regression analysis shows a negative correlation between proximity to bus stops
and participation rate. This echoes what was observed in the "at a glance" analysis which
is that employers with proximity to bus only may actually indicate a lower participation rate
than employers who are not located within 0.5 miles of either type of station. The reason
for this is that, for example, an employer 0.55 miles from a subway station still has greater
accessibility than an employer 0.4 miles from a bus stop. Additionally, including the parking
subsidy data in the model reduces the significance of the employer's proximity to transit.
" Location in Cambridge: The "at a glance" analysis did not show any conclusive results
about Cambridge, and though both regression models show that a location in Cambridge
increases employee participation, the results are not significant. The positive values support
the a priori expectation that the PTDM Ordinance may be increasing participation, but since
the variable is not significant this cannot be stated with confidence. When parking subsidy is
included in the model, the correlation increases, but the significance level does not increase.
" Pretax Availability: The employers who offer the pass pretax through payroll deduction
exhibit increased participation rates. This was a finding of all three analyses-the "at a
glance" figure and the two regression models.
" Subsidy: All three analyses found that having a subsidy increases participation. The "at a
glance" approach showed that though offering a subsidy increased participation, the subsidy
level itself did not seem to be a major influencing factor. Contrary to this finding, it appears
that when all characteristics are combined into one model the subsidy level is significant as
long as it is higher than 25%. Interestingly, in both regression models 100% subsidies do not
increase participation as much as subsidies between 25% and 99%.
140
"
Parking Availability: Having parking available on-site decreases participation according to
all three analyses. The ratio of the number of spaces to the number of employees does not
appear to be significant as long as parking is not for "executives only." The availability of
on-site parking is also highly significant in both models.
" Parking Subsidy: Subsidized parking decreases participation in the program, with free
parking decreasing participation more than a partial parking subsidy as expected. This was
shown in both the "at a glance" analysis and the second regression analysis.
" Size:
Increased employer size tends to decrease participation according to all three
analyses.
This relationship is also highly significant.
This may be due to the fact that
smaller companies tend to enroll in the program because their employees are interested in
participating, or because smaller employees tend to recruit from a smaller geographic area.
Additionally, promoting the program may be easier in a smaller company.
" Industry Classification: There is no clear correlation between industry classification and
program participation.
5.2
Average Employee Usage Levels of a Corporate Monthly
Pass
For the purposes of this analysis, usage is defined as an individual employee's unlinked trips per
month. This section aims to determine which employer characteristics and benefits policies, if any,
influence an individual employee's monthly transit usage. In this analysis, individual monthly
usage is averaged across all Corporate Pass holders in a company, and this average usage is
compared to employer characteristics and benefits policies in Section 5.2.1, and then analyzed
in a regression model.
141
5.2.1
A Priori Expectations
An employer's average employee transit usage is a bit more difficult to predict than participation
rate since there are trade-offs for each variable. If an employer characteristic makes transit more
accessible or appealing, this will likely increase participation. As previously determined in the
usage analysis in Chapter 4, increased participation means that more employees are joining the
program-including those that use transit infrequently. This will lower the employer's average
usage. However, if an employer has high transit accessibility this may also motivate employees to
use the system more so that even the infrequent transit users are using the system more than the
infrequent transit users at other companies.
" Distance to CBD: As distance to CBD decreases, an individual's transit usage is expected
to increase because transit becomes more accessible. However, on average the employees
of this company will have lower usage since this also corresponds with higher participation
rates (so there will be an increased number of infrequent transit users in the program).
" Distance to Subway:
Similar to distance to the CBD, increased accessibility will both
increase usage on the individual level and likely decrease average usage on the companywide level. Only subway stations are considered, not bus, since only the LinkPass is being
considered and subway ridership is needed for a LinkPass to be cost effective. Additionally
the previous analysis showed that proximity to only bus stops was not as influential as
proximity to subway stations.
* Location in Cambridge: Cambridge employees are expected to use transit less on average
than other employees of employers not located in Cambridge but at an equal distance to the
CBD. The increased transit accessibility and PTDM ordinance may sway occasional transit
users to join the Corporate Pass Program, which would decrease average usage.
" Pretax Availability: Companies that offer the passes pretax will likely have slightly lower
usage, since pretax is essentially a type of subsidy and it will require less usage to reach the
full value of the pass.
142
"
Employer Subsidy: The expectation is that as employer-provided subsidy levels increase,
the average usage will decrease. The highest subsidies will attract those who use transit only
periodically or even occasionally, as long as they are located in a transit accessible area.
" Parking Availability: Parking availability will probably not have a very large effect on
usage since parking and transit benefits are usually mutually exclusive. If there is an effect,
it is expected that employees with access to parking will use the MBTA less.
" Parking Subsidy: Parking subsidy will also probably not have a very significant effect on
usage since parking and transit benefits are usually mutually exclusive. If there is an effect,
parking subsidies should decrease transit usage.
" Size: The relationship between size and usage is unclear. Since it was found previously that
large companies have lower participation rates, this could indicate that employees at large
companies will also have higher usage (those that participate have higher transit usage to
begin with).
* Individual Characteristics: It is also quite likely that the characteristics of each individual
(home address, age, income, auto ownership) will outweigh the company characteristics.
However, these characteristics were not collected and are not available for the purposes of
this research.
5.2.2
Employer Characteristics at a Glance
Each characteristic was first examined individually. Only LinkPass holder usage was analyzed.
Chapter 4 shows that Bus Pass holders have significantly fewer unlinked trips per month on
average, and there are far fewer Bus Pass holders than LinkPass holders.
143
Distance from City Center
The relationship between distance from the CBD and average LinkPass usage is shown in Figure
5.19. The effects of distance from the CBD on average usage are not clear from this figure. All
of the curves have a median at approximately 40 unlinked trips (between 38 and 43) and follow a
similar usage pattern.
100%
90%
80%
70%
60%
.
. 50%
E
LU
40%
30%
20%
-<0.5
Miles (Count = 200)
-0.5
- 1 Miles (Count = 72)
-1-2
Miles (Count = 108)
-2-5
10%
->5
Miles (Count = 91)
Miles (Count = 50)
0%
0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.19: Average Usage by Distance to CBD
Distance from Transit
Figure 5.20 shows the average usage by employer distance from a subway station. The lowest
average usage belongs to the employers that are located within 0.25 to 0.5 miles of a subway
station. This group has a median average usage of about 38 unlinked trips. The other two categories
each have a median of about 41 unlinked trips. Below the median usage, companies further than
0.5 miles from a subway station have less usage than those within 0.25 miles of a subway station,
and above the median this pattern is reversed. This may be because for riders with high transit
usage, those who work further than 0.5 miles from a subway station are likely to be transit captives
144
and if they make this journey regularly then they are probably (either by necessity or choice) almost
exclusively transit users.
100%
90%
80%
70%
,
E
60%
50%
-<0.25
Miles to Subway (Count = 368)
40%
-0.25
- 0.5 Miles to Subway (Count 93)
30%
-- Greaterthan 0.5 Miles to Subway
(Count=60)
LU
20%
10%
0%
0
20
40
60
80
100
120
Average Employee Unlinked Trips
Figure 5.20: Average Usage by Distance to Subway
145
140
Location in Cambridge
Employers in Cambridge exhibit lower average employee monthly ridership levels than other
companies a similar distance from Boston's CBD, according to Figure 5.21. This may be due
to the PDTM ordinance, which encourages higher participation rates and therefore lower average
usage among companies.
100%
90%
80%
70%
60%
E
S
*
50%
40%
-Cambridge
(Count = 64)
-Elsewhere
(Count = 146)
30%
20%
10%
0%
0
10
20
30
40
50
60
70
Average Employee Unlinked Trips
Figure 5.21: Average Usage by Location in Cambridge or Elsewhere
146
80
Pretax Availability
Figure 5.22 shows no discernible difference between the usage of employees who receive their
passes through pretax payroll deduction and those that do not until about 47 unlinked trips, where
non-pretax pass holders start to have higher transit usage (in a handful of companies as the sample
of non-pretax users is quite small). This shows that among frequent transit users, employees who
do not pay for the pass through pretax dollars use the pass more. This may be an indication that
employees who purchase a pass with post-tax dollars will tend to be very frequent transit riders
since there is little motivation to purchase the pass other than if a full-price monthly pass is already
a very cost-effective deal.
100%
90%
80%
70%
, 60%
'&50%
E
-Pretax
*040%
-Not
(Count = 503)
Pretax (Count = 18)
30%
20%
10%
0%
0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.22: Average Usage by Pretax Availability
Employer Subsidy
As with the participation rate analysis, the employer subsidy levels depicted in Figure 5.23 do
not indicate any clear relationship between average employee usage and subsidy amount. Figure
5.24 shows only whether a company offers a full subsidy, no subsidy or a partial subsidy. This
147
relationship is a bit more clear. Employees of employers who subsidize the full cost of the pass
take fewer trips on average, with a median of 37 unlinked trips. Employees of employers who
offer either a partial subsidy or no subsidy both take a median value of 41 trips per month. For
employers whose employees use more than 45 trips on average, the behavior of all three groups
is very similar regardless of subsidy. Below the median value of trips, employers who offer no
subsidy have lower average employee ridership than employers who offer a partial subsidy. This
is likely the result of mutually exclusive benefits policies. If an employer is offered a partial transit
subsidy but no parking subsidy, they will be motived to take transit on a more regular basis. If they
are offered no subsidy then driving occasionally is a more appealing option.
100%
90%
80%
70%
60%
.550%
E
a.
-(0%-25%]
40%
30%
(Count= 16)
-(25%-50%]
(Count = 47)
-(50%-75%]
(Count = 16)
-(75%-100%)
--
20%
-No
(Count = 4)
100% Subsidy (Count = 119)
Subsidy(Count = 319)
10%
0%
0
10
20
30
40
50
60
Average Employee Unlinked Trips
Figure 5.23: Average Usage by Subsidy Amount
148
70
80
100%
90%
-
80%
-
-
70%
-
-
60%
-NoSubsidy(Count=
S50%4
-
-
E
'LI
l
-
40%
319)
SomeSubsidy(Count=83)
100% Subsidy (Count=119)
30%
20%
-
10%
-
-
0%-0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.24: Average Usage by Existence of an Employer Subsidy
Parking Availability at Employers
Figure 5.25 shows average employee usage per company for employers who offer on-site parking
and for employers who do not. For employers whose average employee transit usage is less than
37, employees with on-site parking have less usage on average. For employers with an average
usage between 37 and 60, this is reversed and employees with on-site parking now have more
usage on average. This is intuitive since the employees with the lowest usage will likely take other
means of transportation (such as driving) most days, which makes the average monthly transit
usage even lower when they have easy access to parking. However, moderate-to-high transit users
may not be eligible to park in their on-site lots if their benefits are mutually exclusive. MIT is a
good example of this trade-off. An employee with a full-time transit pass who uses transit often is
not likely to drive on a given day because they will not be allowed to use the lots without a parking
permit. However, an employee with an "Occasional Parking Pass" will probably use transit less
than another infrequent transit rider from another company without access to parking privileges.
149
100%
90%
80%
70%
60%
E
-
--
50%
-
40%
-
-
-
-
-
On-SiteParking(Count= 176)
-No
On-Site Parking(Count= 345)
30%
20%
10%
0%
0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.25: Average Usage by On-Site Parking Availability
Parking Subsidy
Figure 5.26 shows the relationship between parking subsidy and employee transit usage.
For
employers with an average employee monthly usage of 36 trips or more, employers with partial
parking subsidies tend to have the lowest usage.
No employers with partial parking subsidies
averaged more than 58 employee trips per month. For employers with an average of fewer than 38
trips, employers with free parking have the lowest usage and employers with no parking subsidy
have the most usage. This is expected, since infrequent transit users will use transit even less when
there is free parking available.
Size of Employer
The relationship between size of employer and average unlinked trips is not as clear as the
relationship between size and employee participation. However, Figure 5.27 shows that although
there is no discernible difference between the smaller size categories, the largest companies tend
to have higher usage with a median usage of 45 unlinked trips while the smaller companies have
150
100%
90%
80%-70%
-
60%
E
50%--
'U
F40%r i
n
-Free Parking (Count
% -No
100)
Parking Subsidy (Count =223)
20%
-Partial
10%
Parking Subsidy (Count = 56)
-
0%0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.26: Average Usage by Parking Subsidy
a median of about 40 unlinked trips. This is likely due to the low participation rates at these
companies, which indicates that only frequent transit users are purchasing Corporate Passes at the
largest companies.
5.2.3
Regression Analysis
This regression was also repeated twice, once for the sample excluding parking subsidy data and
again for the sample that includes this data. Average usage does not require a binomial model
because usage is not bound between 0% and 100% as participation is. The dependent variable was
average November unlinked LinkPass trips per company. The highest adjusted R-squared values
in both models were found when a log-log model was used. The results are shown below, with
more iterations shown in Appendix H.
The adjusted R-squared for the first model (excluding parking subsidy) is 0.022, and the
adjusted R-squared increases slightly to 0.027 when parking subsidy is included. These adjusted
R-squared values are quite low and indicate that the variables selected for these regressions are not
151
100%
90%
80%
70%
A 60%
E
50%
-0-25
Employees (Count = 207)
40%
26-75 Employees (Count = 155)
30%
-76-1000
Employees (Count = 139)
20%
->1000
10%
Employees (Count = 20)
0%
0
10
20
30
40
50
60
70
80
Average Employee Unlinked Trips
Figure 5.27: Average Usage by Size
Variable
Estimate Std. Error Significance
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <25%
Subsidy >25% and <50%
Subsidy >50% and <75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
LN(Size)
Significance codes: 0 to 0.001
= ***,
3.792
-0.097
-0.069
-0.119
-0.067
-0.016
-0.036
-0.066
0.008
0.067
-0.082
-0.275
-0.070
-0.031
0.014
0.001 to 0.01
0.092
0.047
0.054
0.045
0.063
0.014
0.047
0.078
0.084
0.054
0.083
0.163
0.038
0.038
0.010
= **,
0.01 to 0.05
*
**
=
*, 0.05 to 0.1
Table 5.3: Usage Regressions Results - No Parking Subsidy
152
Estimate
Std. Error
Significance
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
3.798
-0.113
-0.053
0.117
0.057
0.064
*
1-2 Miles from CBD
-0.108
0.053
*
2-3 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <25%
Subsidy >25% and <50%
Subsidy >50% and <75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
Free Parking
-0.076
0.019
-0.020
-0.074
-0.018
0.086
-0.079
-0.268
-0.055
-0.030
-0.065
0.070
0.012
0.053
0.102
0.117
0.067
0.107
0.173
0.046
0.047
0.049
Partial Parking Subsidy
LN(Size)
-0.098
-0.020
0.061
0.017
Variable
Significance codes: 0 to 0.001
=
*,
0.001 to 0.01
=
*
0.01 to 0.05
=
*, 0.05 to 0.1
Table 5.4: Usage Regressions Results - Including Parking Subsidy
153
very explanatory for an employer's average usage. This suggests that individual characteristics,
such as location of employee's home address and other demographics probably have a far greater
influence over an individual's usage of a monthly pass than the characteristics listed above.
Additionally, influences on average usage per employer have a more complicated cause-and-effect
relationship than with participation. There are trade-offs between individual usage and average
usage that make the results difficult to predict.
5.2.4
Average Employee Usage Results
The employer benefits policies and characteristics are at best weakly correlated with average
employee usage. There were some subtle influences, including that very high subsidies (greater
than 75%) decrease average usage. This indicates that other factors such as employee home address
and demographics have a higher impact on usage.
* Distance from CBD: Both regression models show that a location within 2 miles of the
CBD reduces average transit ridership, but the level by which it is reduced fluctuates with
each group of employers at different distances within 2 miles of the CBD. The "at a glance"
analysis did not show anything conclusive about the effects of proximity to the CBD on
usage.
" Distance from Subway: The relationship between average employee usage and distance
to subway stations is complicated. The "at a glance" analysis showed a trade-off where
below the median usage, companies further than 0.5 miles from a subway station have less
usage than those within 0.25 miles of a subway station, and above the median this pattern
is reversed. A possible explanation is that riders with high transit usage who work further
than 0.5 miles from a subway station are likely to be transit captives and if they make this
journey regularly then they are probably (either by necessity or choice) almost exclusively
transit users. This trade-off is not found in the models since the natural log of the distance
to a subway station has a negative correlation in one model and a positive correlation in the
154
other.
" Location in Cambridge: All three analyses show that a location in Cambridge reduces
average monthly transit ridership, but the model estimates are not statistically significant.
This could be a result of the PTDM Ordinance which may be encouraging infrequent transit
use among employees who generally use other types of transportation.
" Pretax Availability: Employers who allow employees to purchase a pass using pretax
dollars tend to have lower average transit usage, according to all three analyses. The "at
a glance" analysis also indicates that this is most prominent among riders with higher usage.
" Employer Subsidy:
The relationship between employer subsidy and usage is not as
significant as originally expected. The "at a glance" analysis showed that 100% subsidies
tend to lower usage, and the two regression models support that, although not very strongly.
However, the effects of different subsidy levels seem to vary, and it appears that only high
levels of subsidies decrease employee usage.
" Parking Availability at Employers: The "at a glance" results show that free parking leads
to lower transit usage among infrequent transit riders, but that among more frequent transit
riders it actually increases ridership. This may be a product of mutually exclusive employer
benefits policies that make employees choose between exclusively driving or taking transit.
The regression models show that, in general, access to parking reduces average transit
ridership.
" Parking Subsidy: All three analyses show that a parking subsidy, whether it is full or partial,
reduces average monthly transit ridership.
" Size of Employer: This relationship is not clear. The "at a glance" analysis showed that
only very large employers with more than 1,000 employees had a noticeable difference in
employee monthly transit usage (usage was higher for these large employees, likely because
155
they have lower participation rates). The regression models also show conflicting results,
indicating that size is not a good explanatory variable.
5.3
Lessons Learned: Effects of Employer Characteristics on
Participation and Usage
The two analyses above show that while the employer characteristics are correlated with
participation rates, they are not strongly correlated with average employee usage. Both findings
are useful to the MBTA for marketing purposes.
The participation analysis shows that employers located close to the CBD and close to subway
stations both tend to have higher participation. Therefore, the MBTA should focus on enrolling
these employers in the Corporate Pass Program, since these employers will naturally have a high
participation rate even with little effort. Though the employer market penetration is already high
within the CBD, there is still room for growth in the areas surrounding subway stations further
outside the city center. Additionally, proposed MBTA projects that increase transit accessibility,
such as the Green Line Extension or the Urban Ring, could increase centrality and therefore
should increase participation in the Corporate Pass Program. The findings regarding pretax payroll
deduction and subsidy indicate that the MBTA should promote these practices among employers.
It also indicates that a program like ComPass in Philadelphia where the agency and the employer
each subsidize only 5% could increase participation in the program, since even a small employer
subsidy was found to increase participation. The MBTA could also benefit by creating marketing
materials that employers can use to recruit employees into the program. These materials would
be especially useful at large employers, which tend to have low participation rates, and employers
which also have on-site parking.
It is also useful to know that employer characteristics do not have a strong influence on average
employee usage, except possibly in the case of very high employer-provided transit subsidies. This
shows that the employee characteristics, such as home address and car ownership, have a higher
156
impact on usage. This also indicates that an individual's transit usage is likely predetermined, so
although the ridership may not be influenced by employer policies the individual's decision to join
the program can be influenced.
Though employer characteristics were not found to strongly influence usage, there were some
more subtle correlations that could be useful for employers and the MBTA to be aware of. For one,
location in Cambridge indicates lower usage, which may be a result of the PTDM, or it could be
unrelated (more people may be cycling during nice weather in Cambridge since many of the main
streets also have designated bike lanes). On-site parking also has an interesting effect on ridership,
since it appears that employers with infrequent riders have even lower ridership rates when they
provide access to on-site parking, but employers with higher usage rates also increase ridership
when they also provide access to on-site parking. In general, the analysis of average usage shows
that employer benefit policies and characteristics may provide opposing influences on infrequent
transit users and frequent transit users.
157
158
Chapter 6
Employer Feedback on the MBTA
Corporate Program
The final question of the survey asked for comments or feedback on the Corporate Pass Program.
Of the 564 responses, 307 companies provided open feedback or comments to the MBTA. Many
of these companies provided more than one comment. The 440 comments do not include 24
comments relating to other issues with the MBTA outside of the Corporate Pass Program (such as
the fare increase, poor service or fare evasion).
Of these, 37% of comments offered positive feedback and 63% offered criticism or suggestions
for improvement.
The vast majority of the positive comments were very general, such as the
following:
"It's convenient and easy to manage."
"Everything about the program is positive. It works wellfor my employees."
"I think it's a greatprogram."
"The program is very convenient, and seems to work well."
A total of 129 comments mentioned that the program,
in general,
worked well for
their company-including some comments that also went on to offer suggestions for further
improvement.
159
The two specific types of positive comments were those regarding customer service and the
website. A positive experience with customer service was reported in 23 comments, and 12
responses mentioned that they liked the online ordering system.
The remaining 63% of comments offered a wide range of suggestions and criticisms, which
were grouped into the general categories shown in Figure 6.1 below.
Should be
Discounted
4%Y
Entire Program
3%
Figure 6.1: Employer Feedback by Topic
Each of these categories had a range of comments, so they are detailed further below in order
of most comments to least.
160
6.1
Ordering Timeline Issues (19%)
The largest number of negative comments related to confusion or dissatisfaction with the timeline
of the pass program. The most common complaints involved the deadline of the 15th of the
previous month to order new passes or discontinue existing passes, and many customers asked
for more real-time service and/or information.
1. Allow Real-Time or Mid-Month Changes, the 15th is Too Early (30 comments)
The biggest complaint from this group was that the system shuts down too early. Most
comments, like the following, mentioned that the deadline was too early so that new
employees who started after the 15th would have to wait a month and a half to get a pass and
employees that are terminated after the 15th will still get an MBTA pass which the company
must pay for.
"Good programfor the employees, their website it pretty easy to navigate. My
only feedback would be that they extend the cut off date for passes. If a new
employee starts in the middle or end of the month we are not able to issue them a
pass until the following month."
"Do not really like the cut-off of the 15th for the CharlieTickets. I do not always
have enough notice to cancel a person's ticket and with a small company we can
rarely re-use a CharlieTicket."
Other respondents thought that the deadline was acceptable, but was too strict:
"Yes, the customer service could be better and although I understandthe deadline
I wish there was some grace period. I missed it by one day and was spoken to
rudely and said there was nothing they can do."
Still other respondents called for even more flexibility and asked for real-time, mid-month
changes:
161
"It is a benefit to employees but a lot of work for the employer Employers need
to be able to manage the cards assigned to them, for example, we should be able
to turn a card on or offfor a given month and change the type of service on the
card..."
"There needs to be an easier way for real time information. We have to have our
orderin by the 15th andyet employees can terminate before we receive ourpasses
at the end of the month. So the MBTA will send CharlieTicketsto companies, only
to have the companies return them because an employee left. The program is not
userfriendly in this manner and wastes both time and money."
2. More Flexibility with Extra Passes (13 comments)
Thirteen of the comments asked for more flexibility with the "extra" passes. Some asked for
the ability to order them mid-month while others asked to be allowed to order more passes.
This was filed under "timing issues" because the extra passes are a way to accommodate
companies who need to add, remove, or replace a new pass mid-month.
3. General Timing Issues (7 comments)
Seven respondents complained about the timing of the program in general, observing that it
was too strict or that it was confusing.
4. Send Passes Sooner (3 Comments)
Three companies requested that the passes be delivered sooner.
6.2
Billing/Payment (17%)
The second most frequent concern was with the billing process. These comments were grouped
into two categories:
1. Billing is unclear or too rigid (32 comments)
A common complaint was that the system was too rigid in not sending the passes until 100%
162
of the bill was paid. There were also comments that the invoice is unclear so that the amount
that the customer believes they owe is not the full amount, which results in the insufficient
payments. This may be the result of the invoice appearing online while changes can still
be made. (For example, a customer can order a new pass after the invoice appears and they
will be billed for it during the same month.) Customers felt that their good record of past
payments should allow them to pay for the one or two passes that they miss on the invoice
on the next month's bill. Some customers reported that this was possible for CharlieCards,
and they wished that it would also be possible for CharlieTickets. This is exacerbated by the
fact that credit card payments are not allowed.
"The invoicing piece can be confusing. I suggest the invoice says DRAFT on it
until the final date when changing it is no longer an option."
"It's confusing, and really difficult to tell what's really owed and what's been
paid because they do it so far in advance. Right now they're setting up bills for
December Very confusing."
"...The procedure for CharlieCards (hard cards) is different than for
CharlieTickets (paper tickets), and this is not clear, as there are hardly any
instructions for the process at all. Most importantly, I think the "adjustment"
policy should work for tickets as well as hard cards. For example, I am able to
add another CharlieCardaccount after the 15th of the month, even though the
payment was already submitted. I just get an adjustment the following month,
with the new additionpaying twice. However, I tried something similar with the
CharlieTicketsbefore the 15th of the month, but after I already had our accounting
dept. pay the bill for the month. Instead of getting an adjustment, it was listed as
an outstandingbalance needing to be paid before the month's passes/tickets were
released. ...I had to have accounting rush a 2nd check to MBTA in order to pay
in time. ... "
163
"...One issue we had was when our order was withheld due to a mere $45 being
owed on the billfor that month. I had to use a personal check to "rescue" our
passes that month, ridiculous !!"
"...On the accounting side of the program we occasionally have problems with
the timing of assigning new Charlie Cards and our passes will be held up for
the amount of $70. We need to request our checks from corporate headquarters
in Omaha, which can take 1-2 weeks. We believe our good record of payments
should help with this issue. The $70 could be added to our next invoice and will
be paid."
2. Allow different payment methods (14 comments)
Fourteen customers asked that the Corporate Pass Program start accepting ACH transfer or
credit cards. The Corporate Pass Program website actually does allow for ACH transfers,
so some of these comments were confusing. One customer claimed that the MBTA would
not approve their company for ACH transfers, while others simply asked for the option.
A screenshot of the order website is shown in Figure 6.2, and it very clearly offers an
ACH payment option. It could be that some customers who have been on the program
since before the online ordering system was launched have just continued to pay by check
without navigating to the "Payment Options" tab of the website. The MBTA would benefit
by reaching out to the employers who continue to pay by check to notify them of this other
option, and briefly teach them how to use it. ACH payments are automatically deducted
each month, so this payment method would alleviate many of the concerns caused by passes
being withheld for insufficient payment.
The MBTA does not accept credit cards, and some employers specifically asked for this
option. If the confusion is cleared up about ACH transfers, however, these customers may
be satisfied if all they want is a more convenient, quick, or automatic payment system.
164
Massachusetts Bay
Hom
Transportation Authority
Account MEIngMItet
fCdMangfmt
a
ITuinal I
Log off
Cutoff Date 4115r2013
rTicket MangMit
fanCuren
iOrder
Current Order Month: May, 2013
<b248db2481
Two Payment Methods
The MBTA offers two payment methods-ACH and Check The MBTA recommends ACH,
the default payment method. This method ensures the as secure electronic transfer of
funds from your bank account to your MBTA program account. All you have todo is acivate
your registered CharlieCards, and they're ready io use!
Paying by ACH
The MBTA Corporate Pass Program uses ACH, a highly reliable and efficient electronic
funds transfer system, which makes it easier for you to order CharlieCards and other
commuler benefits. To securely edit your bank account information, dick Edit Your ACH will
take place on the 16th of every month (or the next business day alter the 15th)
Paying by Check
Kyou wish to pay for your order by check, please make the check payable to MBTA
Corporate Pass Program andmail it to:
MBTA Corporate Program
PO Box 847467
Boston, MA 02284-7467
Payment Option:
CharlieCard
Current Payment Opton:
ACI
Paying by ACH
Bank Accut Type:
Name of Bank:
Name on Bank Account
Routng No:
Account No:
Figure 6.2: Screenshot of "Payment Methods" Page of Corporate Pass Website
6.3
CharlieCard Issues (15%)
There were 41 comments about CharlieCard technical issues-some were complaints about
malfunctions and others were suggestions for better ease of use.
1. Activation/Deactivation issues (15 comments)
The most common complaint in this category was that if a new employees used a CharlieCard
before the first of the month they would be charged for a full month's use. Customers felt
that the cards should not be activated until the first of the month, or that the MBTA should
be able to charge the customer for the amount used but not for the full month. Another
issue reported by two employers was that cards were still active even after employees quit.
This means that the company is still being charged for former employees that are using the
MBTA.
165
"The online ordering system works well, but I have several concerns about blank
CharlieCardactivations: 1) newly activated cards should be able to be coded
with effective start date (so there's no way for a rider to use it prior to the 1st
of the month) 2) new CharlieCardsshould only become valid once we confirm
receipt of the blank card AND assign it to an employee."
"[Distributing]monthly Charlie Tickets is a nuisance and cumbersome. We have
also had trouble with returnedcards that have not been properly credited. Charlie
Cards, are actually usable, the month before they are activated. We have had
employees use them and need to pay for the month. This is a system flaw on the
MBTA part."
"We have had problems with the Charlie Cards. They still work even after we
have deleted them from the system. Also the rule for cancelling a pass is a bit
stringent.No room for error on the administrator'spart."
2. Problems with expiring or "bad" cards (13 comments)
Some customers reported an issue was CharlieCards expiring unexpectedly. These concerns
were not necessarily with the cards expiring, but that they had no warning, communication
was poor, and that their concerns were not well-handled.
"Yes they need to stop telling my employees that we (the company) have shut off
their CharlieCard,when the MBTA was having problems with some of the older
cards expiring."
"For the most part I have been satisfied with the program. I did have an issue
earlierthis year with replacingexpired CharlieCardsI think the MBTA could have
handled the situation better since they knew in advance of the issue. Customer
service could always be better"
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3. Allow us to reuse old cards (12 comments)
Another fairly common suggestion was to allow employees to suspend their CharlieCard for
a few months (while they bike for the summer or go on maternity leave, for example) instead
of canceling the card and then receiving a new one in the mail. A similar suggestion was to
allow new employees to continue using their personal CharlieCards.
"...it seems wasteful to have to issue a new Charlie Card every time an employee
wants to suspend their cardfor a month. Why do you have to remove them from
the account and then issue them an entirely new card? It would be nice to have
an option to suspend the accountfor a month or however long."
"The most frequently asked question I receivefrom new sign-ups is whether or not
they can just update their current CharlieCard. Something that would make the
pass program a lot more efficient (although might not be possible based on current
technology) is being able to activate regular CharlieCards with the corporate
program. Currently, special cards have to be sent that are preprogrammed with
the corporateprogram."
6.4
Paper Ticket Issues (15 %)
There were a large number of concerns about the paper tickets-particularly since these customers
are the higher-paying commuter rail and ferry customers. The main issues were that:
1. Tickets are not associated with a specific employee, as with the CharlieCard, so if lost the
employee is forced to pay for a new card out-of-pocket.
2. Tickets require distribution, must be mailed, and waste paper.
Some customers specifically asked for the tickets to be converted to CharlieCards, while others
simply asked for a way to solve the two aforementioned problems.
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A few were disappointed
with the MBTA and the program because they indicated that they had been promised a shift to
an entirely ticket-free system at least two years ago. If mobile ticketing becomes available to
corporate customers, this may alleviate or completely remove all paper ticket concerns.
6.5
Service, Communication and Information (14%)
Some companies called for more communication (e-mail reminders, for example), while others
asked the MBTA to provide more information on their website or to provide brochures for
employers and/or employees. Many also asked for improved customer service.
1. Bad customer service (19 comments)
There were 19 comments that customer service was poor. Respondents reported a lack of
knowledge, a lack of willingness to help, and rudeness. It was also reported that the customer
service skills and knowledge of the program varied greatly from person to person. Some
examples are shown below.
"Customer service is terrible-theynever know the answers and do not go out of
their way to find answersfor you. ... "
"The customer service is not always helpful. You get a different answerdepending
on who you talk to. ..."
2. Provide More Information and Educational Material (12 comments)
There was a call for more information sharing from the MBTA. The website does not
currently have much information on it, and customers must call the 1-800 number listed
on the website to get many of their questions answered. Information was requested for both
employers and employees. Employers wanted more information on how to provide subsidies
and how to recruit more employees to the program. They also asked for employee brochures
or handbooks to outline the procedures and benefits of the program. This could include steps
on how to get an auto insurance discount, as well as details on the tax benefit.
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Also included in this category were comments that showed that customers were
misinformed. For example, they believed that the Commuter Rail was not eligible for the
Corporate Pass Program or they thought that the auto insurance discount had disappeared.
This is not entirely true, since some auto insurance providers still offer the benefit, although
it is not required of all insurers (Commonwealth of Massachusetts, 2013).
"It should be easier to find information on the program. As it stands now, the
website only lists an 800 number to call. ... "
"It would be good if the MBTA had ways to help managers get their people more
involved and use [the] CorporatePass Program. It is a greatprogram and I wish
that more people would use it but they all drive or take alternatives to the MBTA."
"Provide information to employers suggesting ways to subsidize monthly passes
and parking. ..."
"Providing Employee Educational/Marketingmaterialsfor companies that offer
this benefit. I was surprisedwhen I asked about this to be told that there is nothing
available. That means every company has to create their own. Having MBTAbranded materials would make this benefit easier to implement and might also
increaseparticipationas more employees would understand the benefit."
3. Better/Increased Communications (7 comments)
Seven employers asked for either more regular correspondence with the MBTA-such as
e-mail reminders-or more clarity in the communications that they were currently getting.
In general, these comments asked for more e-mail communication, automatically generated
reminders of big events (such as using the last "blank" pass or the last day that changes can
be made), and faster delivery of invoices to ensure getting a check to the MBTA on time.
"I wish the "adjustments" section of invoices had more detail (i.e. employee
names). ... "
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" be nice to have a reminder email around the 10th of the month about updating
the order before it locks in on the 15th. ..."
"Would like automatic notification or reminder when you use last "blank pass"
or when there is one left to order more as it takes some time to receive depending
upon the day of the month."
"It would be helpful if an email could be generated with a copy of the monthly
bill when the money is taken from our bank account."
6.6
Website (7%)
Although it was previous mentioned that we had 12 positive comments about the website, we also
had 19 negative comments. Most of these comments suggested that the website was generally
unintuitive, confusing, or not user friendly. The two comments below exemplify this sentiment:
"The web site is not quite intuitive. I have to poke around to find things or I just call
and someone in the CorporatePass Office helps me."
"The MBTA website is useful but the restrictionson when to purchasepasses, how to
fix mistakes in ordering and online tools arefrom a prior century. The MBTA needs to
get into the 21st century with it's online services."
Some offered specific recommendations, shown below:
"Suggestion on the website once you look up a pass and need to reportit as lost there
could be a direct link to that option. Now you look up the number and then reenter the
number under lost/damagedpass."
"I think the website should be a bit more userfriendly. It does not offer enough detail.
I specifically would like to be able to see when people are added to the account and
when people are removedfrom the account."
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"It would be very helpful to have a more user-friendly and streamlined website. The
current website is a bit outdated. For instance:
" Better sorting alphabeticallyand by serialnumber
" There only 2 choices on the Link Pass drop down menu: "Active" and "Remove
from Account". Does "Remove from Account" mean that the card has been
deleted, deactivated? Will the pass continue to work but just not associatedwith
our account? It's not clear at all."
It is important to consider that this survey asked no demographic information of the person at
each company who uses the online system, so in that sense it is difficult to see which group of
people considers the website to be user-friendly and who considers it to be difficult. One positive
comment called the website a "more efficient way of [placing] orders", which suggests that this
user has been ordering passes for her company since before the website existed so in her experience
it is an improvement. To someone who has only experienced the website, they may have different
perceptions. Age, personal experience, and education also all factor into an end-user's perception
of user-friendliness, and none of this information was gathered.
6.7
Other (6%)
There was a diverse selection of 18 comments that did not fit into any of the other categories. The
most frequent comment in this category was that employees would like the flexibility of being able
to pay-as-they-go with pretax dollars-particularly employees who worked part-time or traveled
frequently for work. Four customers asked that seniors be allowed to purchase a TAP card through
the corporate program. A few employers asked for the option of receiving the passes via regular
USPS mail instead of FedEx, or having the option of picking the passes up from a customer service
location in the spirit of saving the MBTA from FedEx expenses.
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6.8
Should be Discounted (4%)
Ten employers thought that the MBTA should provide the Corporate Passes at a discounted price in
addition to the tax incentive. One of these employers specifically asked that Non-Profits be given
a discount. Several of these respondents believed that a small discount would result in higher
participation within their company. Some other agencies offer such a discount (see Chapter 2.7.3,
"Philadelphia, PA"), and the analysis in Chapter 5 shows that offering a subsidy of any amount
increases participation. Another alternative solution would be to better advertise the tax savings
through the website or employee brochures. Many of these employees may not realize that they
are in fact already getting a discount on the pass.
6.9
Entire Program (3%)
There were 10 comments that suggested that either the entire program was flawed, or that some
crucial aspect of the program such as set-up was difficult or time-consuming to administer. Some
of these comments are shown below:
"It is the most labor intensive and difficult program to administer So hard to
coordinate with payroll deduction - adds and drops are not as easy or versatile as
they once were.
"It was difficult to set up, ie. hard to understandwhat to do, retrieve old passwords,
needed to sign up and then wait two months, the Charlie Cardhad to be mailed to us
specifically (couldn't use any old card), but now it seems to be okay. An easier initial
set-up would be appreciated."
"I think there areflaws in the system too much to write..."
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6.10
Conclusions on Customer Feedback
Much of this feedback comes down to better communication and more information. Chapter 7
will provide more detailed suggestions, but in general the MBTA can fix many of these issues by
reaching out to their customers to tell them about different payment options available or to remind
them of approaching deadlines. Taking the initiative to send reminders and individually contact
employers about program changes could fix employers' mistakes before they are made. Similarly
with the CharlieCard issues, if an automatic notification can be sent before cards expire this would
help the customer perception of the program enormously.
Mobile ticketing could be a solution to some of the issues with paper CharlieTickets if this
program is expanded to include Corporate Pass Program customers.
This chapter and the previous chapter both support the notion that the MBTA should provide
materials to employers about how to offer subsidies and increase enrollment, and also for the
employees about the benefits of participating in the pass program.
The pleas for a discounted Corporate Program (tied to a specific level of employer subsidy) are
not unmerited considered the findings in Chapter 5, which show that even a small discount could
increase participation.
Finally, many of the issues mentioned above could be solved with a new universal pass option,
modeled after the MIT Mobility Pass program. If every employee in a company is automatically
enrolled in a universal Mobility Pass program, this would eliminate the confusion about how many
passes to order and pay for each month. In general the administration of the program would
become more user-friendly as passes would need to be ordered when new employees join the
company and canceled when employees leave, with no month-to-month adding or canceling. It
would also answer the plea for an employee discount if, as expected in most cases, employers will
pay the MBTA less than the full cost of a monthly pass for each employee, and pass along these
savings proportionally to all of their employees. A universal pass option also would provide the
employee more day-to-day commuting flexibility.
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Chapter 7
Conclusions and Recommendations
7.1
Summary and Findings
Estimates of the program's penetration show that employer participation is highest among large
companies that are located in downtown Boston or Cambridge within walking distance of multiple
subway stations or a transfer station. The remaining participants are almost exclusively within
0.5 miles of a subway station and/or 0.25 miles from a bus stop, with the vast majority of these
being the former. Roughly 57% of employees in the largest companies in Boston and Cambridge
have access to the direct program through their employer, and it is estimated that 97% of these
employees are eligible to receive transit benefits of some type. For all companies within 0.5 miles
of a subway station, roughly 33% of employees of these companies have access to the direct
program and more than half are eligible for transit benefits of some kind.
The employer practice survey revealed interesting results regarding how the pass is being priced
and where it is being offered. The range of employer sizes is enormous, with the largest having
23,000 and the smallest having only one. The median employer size is only 37, but several very
large companies make up a large portion of the employees in the program. In fact, the top 8 largest
companies that responded to the survey account for over 50% of the employees represented by
the survey results. Two-thirds of employers also do not offer parking, though larger employers
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tend to have on-site parking, so 80% of employees in the companies surveyed have access to onsite parking. Additionally, 80% of customers who receive a Corporate Pass are receiving at least a
partially subsidized pass, and almost all employers offer the pass through pretax payroll deduction.
This is a advantage to employees in the Boston area, and it is also advantageous to the MBTA as it
explains some of the usage discrepancies seen between Corporate and Non-Corporate customers.
This study found that the Corporate Pass customers are using the pass significantly less than
their Non-Corporate counterparts in the case of LinkPasses, Local Bus Passes and Commuter Rail
Passes Zones 1-8. Corporate LinkPass holders use the pass at least 20% less often than NonCorporate LinkPass holders on average, and the disparity in usage increases during summer and
popular vacation months. In fact, 47% of Corporate Pass holders are using less than the full "value"
of the pass on average, which results in an estimated $4.4 million in additional annual revenue
captured from Corporate LinkPass holders. The additional revenue captured from Corporate Bus
Pass holders and Corporate commuter rail riders can be roughly estimated by multiplying the
annual Corporate commuter rail and bus revenue by the ratio of additional revenue captured from
the Corporate LinkPass program to Corporate LinkPass total sales revenue (which is about 7%).
This method estimates that the annual additional revenue captured from the entire program could
be as high as $9.8 million, which is revenue that would literally be lost to the MBTA if the program
did not exist. Furthermore, Corporate Passes generate a very steady revenue stream while NonCorporate Passes have higher fluctuations due to seasonal variabilities. Additionally, the number of
Corporate LinkPasses sold were unaffected by the recent fare hike, suggesting (but not definitively
proving) that the Corporate Pass may offer some additional insulation to future fare increases.
Employer benefit policies and other characteristics were found to have clear effects on
employee participation rates within an employer, and more subtle effects on the employer's average
employee usage. Subsidies were found to increase employee participation, particularly when the
subsidy is greater than 25%. The exact value of the subsidy is not important as long as it is greater
than 25%. The availability of on-site parking was very significant and negatively correlated with
participation rate. Parking subsidies are also negatively correlated with employee participation, and
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free parking is more significant that partial parking subsidies. Other factors that correspond with
increased participation include pretax availability, close proximity to subway stations, and close
proximity to the CBD. An interesting and unexpected finding was that size is negatively correlated
with participation. This is likely due to smaller companies joining the program because a large
percentage of their employees are already transit captives and because small companies tend not
to have on-site parking. The average employee usage analysis suggest that individual employee
characteristics, such as home address or demographics, are likely better predictors of transit usage
than employer benefits policies or characteristics. However, some subtle relationships were noted.
Employers located within two miles of the CBD tend to have lower average monthly transit usage
per employee.
Also, the regression analysis indicates that high transit subsidies can decrease
average employee transit usage. Usage also varies by parking availability, parking subsidy, and
pretax availability, but the effects are different between employers with high average monthly
usage and those with low average monthly ridership.
Finally, the employer feedback showed that customers largely appreciate the Corporate Pass
Program as a benefit to employees, despite some suggestions and feedback on logistical and
customer service issues. Only about half of respondents offered any feedback. This could be
partially due to lack of anonymity, but it also suggests that these customers are most likely generally
satisfied with the program. In addition, of the comments received, 37% of the comments were
positive. The negative feedback consisted of logistical concerns and customer service suggestions.
Only a very small number of customers were completely dissatisfied with the program as a whole.
The feedback commented on several aspects of the Corporate Pass Program, but the majority of
complaints were about billing, timing, communication and customer service, and technical issues
with CharlieCards and paper tickets. Recommendations based on this feedback are provided in
Section 7.2.3.
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7.2
7.2.1
Recommendations
Future Marketing
Program penetration among employers who are the largest companies in downtown Boston and
Cambridge is already quite high, and almost all employees are offered some type of transit benefit
which is ultimately good for the MBTA. Although these large companies all seem to be offering the
program, the MBTA could make an effort to motivate employers to take the lead in getting more of
their employees to participate in the program (since large companies tend to have low participation
rates). For example, if they do not already offer a subsidy they could consider offering even a
small subsidy to make the program more appealing to less frequent transit users. The MBTA can
help by providing more information to employers about the benefits of offering a subsidy. The
MBTA could also consider a small (5%) mandatory employer-provided subsidy, as with SEPTA's
ComPass, either with or without an MBTA matching discount. Or the MBTA provided discount
might be tied to a minimum 25% employer-provided subsidy.
The MBTA could make an attempt to raise interest among companies within 0.5 miles of a
transit station, particularly those that are further outside the city, since the market penetration
among these companies is only 45%, as opposed to 78% in the largest companies in Boston and
Cambridge. These companies are also a great target market because their proximity to transit
suggests that they will have high employee participation. A direct mailing program that targets
employers within 0.5 miles of a transit station could be helpful in bringing more employers into
the program.
A "bug your boss" campaign could also be useful for gaining more employer
participation. These campaigns are directed at employees, and ads or fliers inform them about
the potential tax savings and other benefits associated with the Corporate Pass Program and urge
them to ask their boss about enrolling in the program. These ads could be placed on the MBTA
buses and subways, so they are directed at employees who are already MBTA riders.
For employers who already offer a subsidy, there are additional ways to increase participation.
The MBTA can provide promotional fliers for the employer to distribute to employees that explain
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the potential tax savings and other benefits of enrolling in the program (such as automatic monthly
renewals).
The literature suggests that employees may not be as aware of commuter benefits
programs as an agency might think. A "bug your boss" campaign would also serve the additional
purpose of promoting the program to employees who did not realize that their employer offered
commuter benefits.
Additionally, if the employer-provided subsidy is below 25% they may
want to consider increasing the subsidy for an additional growth in employee participation.
If
a parking subsidy is offered, it should be noted that this can reduce participation in the Corporate
Pass Program, so employers should be offering equitable transit subsidies (or, to reduce parking
demand, employers could provide higher transit subsidies).
Several of these recommendations involve publishing materials, which can be made available
on the MBTA's website, for advertising purposes and to provide information to both employees
and employers. The information targeted at employers should include:
" An explanation of the tax savings available to employers through the program. An online
calculator tool is a nice way to make the savings very clear, but even a simple explanation
with example calculations will help employers to realize the potential savings. One such
calculator, provided by Commuter Check, was shown in Section 2.3.
" Information on how to complete any tax paperwork and how to set up pretax payroll
deductions.
" Information on how to subsidize employee passes, and evidence that offering a subsidy can
lead to higher participation rates.
" Hints about how an employer can decrease parking demand (such as subsidizing transit
passes).
" Tips on how to promote the program to employees, and access to information which can be
passed on to employees during orientation. The MBTA should make it clear to employers
that their employees might not be aware of the program if it is not advertised. Employers
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may be hesitant to promote the program if they think it will cost them money (particularly if
they offer a subsidy), but example calculation that show the tax savings and potential parking
demand savings could sway them to be more supportive of the program.
" Information about any deadlines or policies that the employer should be aware of, such as
the last day to order passes.
" The availability of ACH payments should be advertised. Customers are asking for it, and it
is already available. ACH payments are more convenient to employers and the MBTA.
* Information about how to provide additional services such as emergency rides home, which
could alleviate some fears that employees may have about transit dependency.
* Other optional information such as the estimated greenhouse gas emissions savings, could
appeal to the altruism in employers and show them the larger global impacts of such program.
TCRP Reports 87 and 107 are good resources for this information, and San Francisco also
has a comprehensive employer guide available at www.sfenvironment.org which can be used as a
reference.
There should also be information aimed at employees to help them make the decision to join
the program. This information should be available on the MBTA website and could also be printed
in brochures and distributed to employers' human resources offices. The information to employers
should include:
e An explanation of the tax savings available to employees through the program. Employees
may not be aware of the substantial savings available to them simply through the pretax
program. A calculator would be a nice addition to the page, but again even simple example
calculations will illustrate the savings for employees. Figure 7.1 shows an example calculator
on the RideEco website that shows employees their annual tax savings in dollars (DVRPC,
2013b).
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"
Information about how to claim the auto insurance discount from those insurance companies
that still offer the program.
* Highlight the convenience of the program. Employees sign up once and never have to think
about paying for a transit pass again.
" Other optional information such as the estimated greenhouse gas emissions savings may also
be interesting to the employee.
( Savings Calculator
Howmuchwillyou save?
$391.80
Figure 7.1: Employee Tax Savings Calculator
The MIT Mobility Pass trial and the Washington University U-pass also indicate that it is
beneficial to offer parking and transit benefits which are not mutually exclusive, along with a high
subsidy. This option benefits the MBTA greatly because they are receiving revenue for passes that
are getting only limited use. This option is also beneficial to employers because it has been known
to reduce parking, which can save money or generate money for the employer. Promoting this
option may be another way for the MBTA to increase participation in the program. The MBTA can
start pilot programs with universities and hospitals which are prime candidates for such a program.
7.2.2
Role of Third Parties
Subscription passes offered through third parties show roughly 5% lower monthly usage from those
that are offered through the direct program. However, since there is almost nothing known about
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the characteristics of the companies who use the third-party benefits, such as subsidy level and
participation rate, it is hard to decisively know whether the third-party program are beneficial to
the MBTA, or if employers in the third-party program would have lower monthly usage rates even if
they ordered passes directly from the MBTA. More open data-sharing between the MBTA and these
third-party providers would greatly benefit the MBTA. As the program stands now, it is difficult for
the MBTA to know how these employers are implementing and distributing the Corporate Pass, and
due to the use of debit cards and vouchers, the MBTA actually does not know what fraction of its
pass purchases are made with pretax dollars through a commuter benefits program. Furthermore,
the revenue implications of programs such as transportation debit cards is currently unknown to
the MBTA as these third-party programs have no incentive to share information with the MBTA.
Additionally, the fact that the MBTA no longer readily has access to its own Corporate
customers' data is an undesirable effect of the third-party programs. It makes it more difficult for
the MBTA to assess the status of the program and do analyses such as this one. If any changes are
made to the program it will be nearly impossible to measure their impact since non-subscription
benefits are not discernible from Non-Corporate passes. Furthermore, the MBTA will not even
have access to the most basic information, such as which companies use their program.
Ultimately, moving the Corporate Pass Program entirely to a third-party program would be
a high-risk decision due to a number of issues raised in this review. There are some potentially
negative consequences that could result from this decision, including:
" It could also be seen as poor customer service since all companies would be required to pay
a fee for the service through a third party.
" Some companies may be unwilling to pay the fee, and may remove themselves from the
program.
" Without new contractual mechanisms, the MBTA will have limited or no access to program
data. Without this data, it is difficult for the MBTA to know the program penetration, or to
conduct analyses such as the ones in this report that can help determine whether or not the
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program is growing and increasing in it's benefit to the MBTA.
* The MBTA will have less control over the future of the program.
" Third-parties may offer debit cards or vouchers in conjunction with monthly passes, and the
benefits of these other forms of pretax transit benefits are unclear (due to lack of data). If
infrequent riders have access to transit debit cards, which can be used to purchase single-ride
fares, they may switch from the Corporate Pass Program to debit cards which would reduce
the additional revenue captured from the Corporate Program.
The benefits of an entirely third-party operated system are:
" It reduces the MBTA's involvement in the program, and therefore reduces labor associated
with the program.
" Third-parties have to potential to provide additional services to employees and employers
(usually for an additional fee), such as a unique, user-friendly interface that allows employees
to order their own passes. They also can mail the passes directly to the employee's house.
" Options such as debit cards or vouchers provide additional transit accessibility to employees,
because they allow employees to use their pretax dollars on other systems. They also allow
employees to purchase commuter rail passes via mobile ticketing.
Another option to reduce the MBTA cost of administering the program would be to charge an
administrative fee to all employers that do not meet a certain size requirement such as five passes
per month. The drawbacks of this policy include the following:
" This may be seen as an equity issue, and may not reflect well on the MBTA-particularly
since the smaller companies are often the ones that do not have on-site parking available.
" If smaller employers choose not to pay the fee and remove themselves from the program,
this could decrease the estimated $10 million per year that the MBTA receives in additional
revenue from the Corporate Pass Program.
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There are benefits to this option, however, including:
" Since the program requires the same amount of administrative effort from the MBTA
regardless of employer size, this could eliminate much of the work without eliminating too
many pass holders overall.
* The administrative fee would add a small amount of additional revenue, estimated to be about
$80,000 per year if the fee is applied to companies who order fewer than five CharlieCard
and all current companies remain in the program.
1
* This policy motivates employers to take measures to increase employee participation.
" A minimum of five cards per order reinforces that the program is a "corporate" program not
necessarily intended for use by self-employed individuals or extremely small companies.
7.2.3
Response to Feedback
The feedback shared in the employer practice survey suggests opportunities for the MBTA to
improve their program and increase participating employer satisfaction.
It is worth exploring options for real-time ordering of passes or at least extending the deadline
beyond the 15th of the prior month.
Though these costs may be high, it is worth at least
investigating the option for the sake of customer satisfaction and continued program participation.
Another opportunity for improvement would be for the MBTA to allow new employees to use their
old CharlieCards for the Corporate Program.
There were many complaints about confusion with billing. Experimenting with different billing
formats and getting user feedback through a focus group may be a simple way to make billing
less confusing. Additionally, orders were witheld if customer accidentally underpaid by a small
amount (1 or 2 passes out of hundreds). The MBTA could solve this by developing a standard
for a company with "good standing", perhaps 12 months with no missed payments, and simply
'This calculation is based on active November 2012 CharlieCards and an administrative fee of $15 per order, which
is based on the fees from the DVRPC RideEco program.
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add the missed payment to the next month's bill. Furthermore, customers demonstrated a lack of
knowledge about the ACH payment option. ACH payments are automatically deducted from the
company bank account, so late payments or underpayments become a non-issue.
Communication and information can be greatly improved within this program. The website
could contain much more information, such as FAQs and the bullet points described in Section
7.2.1.
The MBTA could also provide PDF brochures via the website to new employers and
employees in the program, give more information about potential auto insurance discounts and
pretax savings. As aforementioned, this would not only strengthen customer service but it could
also increase customer participation. Ultimately, providing more information to the employers will
reduce the strain on customer service representatives and could save time and effort for the MBTA
in the long run. Additional comments asked for automatically generated reminders before the
fifteenth of the month when the deadline for the next month's order is due. Scheduling automatic
e-mails to all employers on the fourteenth of every month would greatly improve participating
employer satisfaction so long as there is an option to unsubscribe from the e-mails if the customer
so desires.
Mobile ticketing may be a partial solution for technical issues with paper tickets if mobile
ticketing ever becomes an option for the Corporate Pass Program. Even if mobile ticketing is only
available for the use of the commuter rail only (with no subway access) for a lower cost this may
improve Corporate customer satisfaction.
Greater knowledge transfer to customers could alleviate some of the concerns about
CharlieCards, such as with employees who use the card before the first of the month. For example,
the MBTA could send a warning note along with any new plastic cards.
Similarly, to reduce
frustration from employers whose CharlieCards expired or were turned off, the MBTA could send
an e-mail before a batch of cards is turned off.
Another recommendation from the customer feedback is to provide regular surveys every year
or so. Many customers reported "waiting for an opportunity to provide some feedback" or felt
like they had been speaking into a black box in the past. It is good practice to check in with the
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program and customers annually or bi-annually to see if there are areas that can be improved. By
taking feedback, and making some small changes, participating company satisfaction will improve
greatly.
7.3
Future Research
Additional insight will be gained into this program if more information can be gathered from the
third party benefits providers. The two major benefits providers for the MBTA were contacted
during the process of this research, but they were not able to offer very much information due to
client privacy agreements. If it becomes possible to quantify the impacts of other types of nonsubscription commuter benefits, that information will be useful from the agency's perspective, but
also from a societal perspective.
The analysis could be expanded further to include more months, so that trends can be observed
over a longer period of time. The yearly month-to-month seasonal variations could help bring
clarity to whether or not the Corporate Pass did in fact provide insulation to the July 2012 fare
increase.
The analysis of the effects of employer benefits policies and characteristics on average
employee usage could be improved if data was collected on an individual level. Home address,
income and other demographic information may provide more insight into what influences monthly
transit usage.
Though the employer practice survey provided a representative sample, it could always help to
get more data from more of the companies in the program. Additionally, data on companies who
do not use the program would be especially helpful in understanding employer participation.
Additionally, it will be useful to reassess this research every several years-as the city, the
MBTA, fare prices, gas prices and IRS policies change, these results may change as well. It is
also healthy to check in with employers for feed back regularly. Continuing this research will
ensure that the Corporate Pass Program continues to bring benefits to the MBTA, employers and
186
employees in the Boston area.
Corporate Pass Program customers are the MBTA's best customers. They provide significant
additional revenue to the MBTA while decreasing administrative fare costs. Increasing the market
penetration of this program, and finding ways to help current employers in the program exhibit
higher participation and lower average usage rates, can only increase the benefits of the program.
187
188
Appendices
189
190
Appendix A
Example Tax Calculations
This section provides examples of how to determine the tax savings that commuter benefits
programs provide to both employers and employees (ICF Consulting, et al, 2003).
There are
three options considered here:
1. Employer Paid: Transit pass is paid in full by the employer.
2. Employee Paid: Transit pass is paid in full by the employee using pretax dollars.
3. Combined: The cost is split between the employer and the employee.
Employer Paid
The calculations for employer-paid passes examines a scenario where an employer is considering
either paying for a $100 transit pass or offering a monthly salary increase of the same amount.
The transit pass in this case is a better deal for both the employer and the employee, because the
employer pays less money and the employer receives more money.
With a salary increase, after federal FICA taxes and corporate tax deductions (assumed here
to be 34%) are applied, the employer pays a little over $70. But with pretax transit passes, the
employer is exempt from FICA taxes and only pays $66.
From the employee's perspective, the salary increase will only be about $60 after federal,
state and FICA taxes. (This amount will vary based on the employee's tax bracket and state tax
191
amounts, but this example uses a single person making $35,350 $85,650 annually.) The transit
pass, however, is still worth the full $100 value.
Employee Paid
If the transit pass is not subsidized by the employer, then the employer does not spend any money
plus they save additional money by not having to pay FICA taxes on the $100 that is being deducted
from the employee's paycheck. The employer also benefits by not having to pay federal, state or
FICA taxes on this amount, which means that the $100 pass actually costs closer to $60.
Combined
Cost sharing is a third alternative that is also beneficial to both parties. Let's assume for this
scenario that the employer decides to subsidize the pass by 50%. This means that the employer
will not pay FICA taxes on the $50 subsidy or the amount deducted from the employee's paycheck,
which makes the employer's out of pocket cost less than $30. The employee also saves money
because not only is half of her pass being paid for by her employer, but the other half is exempt
from payroll taxes. This means she only pays about $30 out of pocket for a $100 pass, which
provides an annual savings of $828.
The calculations for all three scenarios are shown on the next page.
192
Employer-Provided Transit Pass vs. Salary
Increase: Employer's Point of View
* $100 Salary Increase
- Employer Pays 7.65% FICA: $107.65
- Employer Gets 34% tax deduction:
$107.65 - ($107.65*0.34) = $71.05
* $100 Tax-Free Commuter Benefit
- Employer Pays 0% FICA: $100
- Employer Gets 34% tax deduction:
$100 - ($100*0.34) = $66.00
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
Employer-Provided Transit Pass vs. Salary
Increase: Employee's Point of View
25% is for a single
person making
$100 Salary Increase
I
-
Federal tax: 0.25*$100 = $25
$3s,3so-$8s,6so
- MA State tax: 0.053*$100 = $5.30
- FICA: 0.0765*$100 = $7.65 <
s.3%flatrate
- Take home: $100-($25+$5.30+$7.65) = $62.05
* $100 Tax-Free Commuter Benefit
- Federal tax: $0
- MA state tax: $0
-
FICA: $0
Take home: $100
FICA is Social Security
(6.2% up to $110,100) plus
Medicare (1.45% for
everyone)
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
Employee-Paid Pretax:
Employer Point of View
- Employer pays nothing
- Saves the additional $7.65 per month in FICA
taxes
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
Employee-Paid Pretax:
Employee Point of View
- Employee gets a great discount
- Normal purchase price is $100
- Employee gets this pass pretax, so saves:
* $25 federal income tax
* $5.30 MA state tax
* $7.65 FICA
DA $100 pass only costs $62.05! Yearly savings of $455!
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
Combined ($50 Subsidy):
Employer Point of View
- Employer
- Employer Pays 0% FICA: $50
- Employer Gets 34% tax deduction:
$50 - ($50*0.34) = $33.00
- Employer saves $3.83 in FICA taxes from
employee-paid portion: $29.17
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
Combined ($50 Subsidy):
Employee Point of View
- Employee gets a great discount
- Normal purchase price is $100, but employer has
cut that down to $50
- Employee gets this pass pretax, so saves an
additional:
- $12.50 federal income tax
- $2.65 MA state tax
- $3.83 FICA
- A $100 pass only costs $31.02! Yearly savings of $828!
Based on calculations in Appendix B of TCRP Report 87 (ICF, et al, 2003)
196
Appendix B
Employer Practice Survey Questions
1. How many employees does your company have? (If your company has multiple locations,
please only include those who work from locations that take part in the MBTA's Corporate
Pass Program.)
2. How many of your employees participate in the Corporate Pass Program?
3. How many of your Corporate Pass Program participants pay for their pass pre-tax through
payroll deduction?
4. What percentage of the cost of a monthly pass is subsidized by your company?
5. Has the above subsidy changed since the fare increase? If so, what was the subsidy before
the fare increase?
6. Does your company provide parking for its employees?
7. How many parking spaces are available to your employees?
8. What percentage of the cost of parking is subsidized by your company?
9. How long has your company been participating in the Corporate Pass Program?
10. How are passes distributed at your company?
11. Do you have any comments or feedback on the Corporate Pass Program?
197
198
Appendix C
July 2012 MBTA Fare Increase Details
(Massachusetts Bay Transportation Authority, 2012c)
199
TABLE 2-3
Key Single-Ride Fares: Existing and Proposed
Existing
Proposed
Fare Category
% Chg.
$ Chg.
CharlieCard
Adult
Local Bus
$1.25
$1.50
20.0%
$0.25
Rapid Transit
$1.70
$2.00
17.6%
$0.30
$1.70
Bus + RT*
$2.00
17.6%
$0.30
Inner Express
$2.80
25.0%
$3.50
$0.70
Outer Express
25.0%
$5.00
$4.00
$1.00
Senior
Local Bus
$0.40
87.5%
$0.75
$0.35
Rapid Transit
66.7%
$1.00
$0.60
$0.40
Bus + RT*
66.7%
$1.00
$0.60
$0.40
Student
Local Bus
25.0%
$0.60
$0.75
$0.15
Rapid Transit
17.6%
$0.85
$1.00
$0.15
Bus + RT*
$0.85
17.6%
$1.00
$0.15
CharlieTicket
Adult
Local Bus
$1.50
33.3%
$2.00
$0.50
Rapid Transit
$2.00
25.0%
$2.50
$0.50
$3.50
Bus + RT*
$4.50
28.6%
$1.00
Inner Express
$4.50
$3.50
28.6%
$1.00
Outer Express
$5.00
$6.50
30.0%
$1.50
Commuter Rail**
Zone 1A
$1.70
$2.00
17.6%
$0.30
Zone 1
$4.25
$5.50
29.4%
$1.25
Zone 2
$4.75
26.3%
$6.00
$1.25
Zone 3
$5.25
$6.75
28.6%
$1.50
Zone 4
$7.25
$5.75
26.1%
$1.50
Zone 5
$6.25
$8.00
28.0%
$1.75
Zone 6
$6.75
29.6%
$8.75
$2.00
Zone 7
$7.25
$9.25
27.6%
$2.00
Zone 8
$10.00
$7.75
29.0%
$2.25
Zone 9
$8.25
$10.50
27.3%
$2.25
Zone 10***
N/A
$11.00
N/A
N/A
InterZone 1
$2.00
$2.50
37.5%
$0.50
InterZone 2
$2.25
$3.00
33.3%
$0.75
InterZone 3
$2.50
$3.25
30.0%
$0.75
InterZone 4
$2.75
$3.50
36.4%
$0.75
InterZone 5
$3.00
$4.00
41.7%
$1.00
InterZone 6
$3.50
$4.50
35.7%
$1.00
InterZone 7
$4.00
$5.00
31.3%
$1.00
InterZone 8
$4.50
$5.50
27.8%
$1.00
InterZone 9***
N/A
$6.00
N/A
N/A
InterZone 10***
N/A
$6.50
N/A
N/A
Ferry
F1
33.3%
$8.00
$2.00
$6.00
F2: Boston
$6.00
$8.00
33.3%
$2.00
F2: X-Harbor
$10.00
$13.00
30.0%
$3.00
F2: Logan
$12.00
$16.00
33.3%
$4.00
Inner Harbor
$1.70
76.5%
$3.00
$1.30
THE RIDE
ADA Territory
100.0%
$2.00
$4.00
$2.00
Premium Territory***
N/A
N/A
$5.00
N/A
* "Bus + RT" indicates the linked-trip price of a trip on both local bus and rapid transit.
** Multi-ride and onboard ticket prices are described in Section 2.1, Fare Structure Changes.
*** This fare category does not currently exist; therefore, both the existing price and percent change are
marked as "N/A."
TABLE 2-4
Pass Prices: Existing and Proposed
Existing
Proposed
% Chg.
Pass Category
$48.00
20.0%
$40.00
Local Bus
$70.00
18.6%
LinkPass
$59.00
$28.00
40.0%
Senior/TAP
$20.00
$25.00
25.0%
Student 5-Day
$20.00
N/A
$28.00
N/A
Student 7-Day*
22.2%
$11.00
$9.00
1-Day
20.0%
$18.00
$15.00
7-Day
23.6%
$110.00
Inner Express
$89.00
24.0%
$160.00
$129.00
Outer Express
Commuter Rail
18.6%
$70.00
$59.00
Zone 1A
28.1%
$173.00
$135.00
Zone 1
25.2%
$189.00
$151.00
Zone 2
30.1%
$212.00
$163.00
Zone 3
22.6%
$228.00
$186.00
Zone 4
20.0%
$252.00
$210.00
Zone 5
23.3%
$275.00
$223.00
Zone 6
23.8%
$291.00
$235.00
Zone 7
25.6%
$314.00
$250.00
Zone 8
24.2%
$329.00
$265.00
Zone 9
N/A
$345.00
N/A
Zone 10*
26.2%
$82.00
$65.00
InterZone 1
29.9%
$100.00
$77.00
InterZone 2
22.5%
$109.00
$89.00
InterZone 3
16.8%
$118.00
$101.00
InterZone 4
18.6%
$134.00
$113.00
InterZone 5
20.8%
$151.00
$125.00
InterZone 6
21.9%
$167.00
$137.00
InterZone 7
23.5%
$184.00
$149.00
InterZone 8
N/A
N/A
$201.00
InterZone 9*
N/A
$218.00
N/A
InterZone 10*
32.3%
$262.00
$198.00
Commuter Boat
* This fare category does not currently exist; therefore, both the existing price
marked as "N/A."
$ Chg.
$8.00
$11.00
$8.00
$5.00
N/A
$2.00
$3.00
$21.00
$31.00
$11.00
$38.00
$38.00
$49.00
$42.00
$42.00
$52.00
$56.00
$64.00
$64.00
N/A
$17.00
$23.00
$20.00
$17.00
$21.00
$26.00
$30.00
$35.00
N/A
N/A
$64.00
and percent change are
202
Appendix D
Table of U.S. Transit Agencies and
Characteristics
From APTA 2012 Public TransportationFact Book (Dickens, 2012) List of 50 Urbanized Areas
with the Most Transit Travel, Ranked by Unlinked Passenger Trips, Passenger Miles, and
Population, Report Year 2010
Only the top 15 urbanized areas are shown in this report.
203
Urbanized Area
Unlinked
Passenger Trips
(a)
Thousands
4,080,681.0
671,669.1
627,785.2
476,175.6
425,040.6
Population (2000 Census)(b)
Passenger Miles
(a)
Rank
Thousands
1 21,285,612.0
2
3,384,795.6
3
3,979,506.6
4
2,529,040.6
2,496,098.0
5
Rank
1
3
2
4
5
Number
17,799,861.0
11,789,487.0
8,307,904.0
3,933,920.0
3,228,605.0
Rank
1
2
3
8
12
1,760,755.5
1,781,009.4
1,222,286.0
940,294.1
911,871.8
491,400.8
779,755.1
538,919.4
7
6
8
9
10
15
11
14
5,149,079.0
4,032,484.0
2,712,205.0
3,499,840.0
4,919,036.0
1,583,138.0
2,076,354.0
1,984,889.0
4
7
14
11
5
24
19
21
568,518.8
488,830.8
12
16
2,674,436.0
2,388,593.0
15
16
New York, NY
Los Angeles, CA
Chicago, IL
Washington, DC
Francisco,
San
CA
6
367,929.1
Philadelphia, PA
7
363,862.4
Boston, MA
189,519.7
8
Seattle, WA
9
157,504.2
Atlanta, GA
10
152,564.9
Miami, FL
11
111,240.9
Portland, OR
105,670.5
12
Baltimore, MD
Denver-Aurora,
97,557.8
13
CO
14
San Diego, CA
96,154.9
91,701.8
15
Minneapolis-St.
Paul, MN
Includes only transe agencies repoiting Lu
Transit Database.
Flderal
iWSIL AUiIIIILLoI 1 1 2-lL) NaLiUIIW
(a) Summed from data reported by individual transit agencies in the Federal Transit Administration
2010 National Transit Database. Total amounts reported by each agency are included in the
urbanized area in which that agency is headquartered regardless of the number of urbanized areas
in which the agency operates transit service.
(b) Not among 50 largest areas in this category; only areas in the top 50 in unlinked trips and
passenger miles are included For complete size ranking lists of all transit agencies reporting
to the Federal Transit Administration 2010 National Transit Database see the 2012 Public
Transportation Fact Book, Appendix B: Transit Agency and Urbanized Area Operating Statistics
at www.apta.com.
Table D. 1: 15 Urbanized Areas with the Most Transit Travel, Ranked by Unlinked Passenger Trips,
Passenger Miles, and Population, Report Year 2010
204
Appendix E
Mobility Pass Report
[Report begins on next page]
205
Report on the MBTA-MIT Mobility Pass Trial Program
July 2, 2012
Summary
*
*
There was usage by people who did not previously have an MBTA pass of $6-7 per person per
month.
Based on the distribution of usage by LinkPass holders, the strong likelihood is that the current
employer program at MIT already increases MBTA revenue. A reference group for a proper
counterfactual is needed to confirm this finding.
*
40% of usage by MIT community took place off peak, and more than 50% of additional usage due to
the pilot took place off peak.
*
Card production costs for more than 8,000 cards were paid by MIT.
*
Trial reduced parking utilization at MIT, showing potential for other employers.
*
MIT context was likely worst-case scenario for increased revenue for the MBTA; MIT already has
high subsidies (50% across the board on top of pre-tax treatment).
Background and Program Size
The trial of the MBTA pay-per-use program (the Mobility Pass) has been ongoing since March 2010. It
was motivated by prior research findings that MIT employees do not travel to MIT the same way each
day. Rather, they use choose to walk, drive, or take transit to fit within their home and work
obligations. Many of these people cannot be reached by current program offerings, since usage is too
low for a monthly pass. Creating a program that fosters this behavior reduces parking usage, which in
turn can pay off for the employer.
In the trial MIT pays the MBTA post hoc on a per-use basis for these employees. This allows a costeffective subsidy of this travel by MIT, resulting in additional revenues for the MBTA, and reduced
parking utilization for MIT. This is the win-win scenario.
The trial had three goals:
e
Technical feasibility.
*
Revenue potential derived from understanding usage by all MIT employee groups, including full time
parkers, other parking permit holders, LinkPass holders, and new employees.
*
Responsiveness of parking utilization to the distribution of MBTA pass to full time parkers.
In the trial, MIT subsidized 100% of MBTA usage for people with a full time parking permit, and for new
employees for a limited period of time. The 50% subsidy in addition to pre tax treatment continued for
those people who have LinkPasses.
There are now approximately 1,000 MIT ID cards with embedded Charlie Chips distributed to
employees, distributed over time as shown in Table 1. Approximately 400 monthly paid parkers have
their occasional usage of the MBTA system paid for on a per-use basis by MIT. Approximately 100
employees with Occasional parking permits and Link Passes have also volunteered to transition to the
Mobility Pass. An additional approximately 300 employees with just a Link Pass are participants in the
program. There are also approximately 200 employees who have started at MIT since the trial began.
There are also an additional 7,000 Charlie Chips on student MIT ID cards, onto which students can load
value, but which are not paid for through MIT.
2010
2011
February
1
1
April
151
211
June
35
12
August
10
25
October
0
5
3
3
December
526
Total
455
Table 1. Passes distributed by month
2012
2011
2010
January
$ 11,227.90
310
$ 21,831.45
631
$ 22,304.00
649
March
$ 3,020.15
145
$ 12,262.75
326
May
$ 10,115.35
312
$ 22,492.30
672
July
$ 10,655.40
337
$ 21,434.10
676
September
$ 11,638.15
320
$ 22,381.05
661
November
$ 11,206.40
312
$ 22,042.80
657
* active cards includes only cards used at least once during month
Table 2. Total fare and active cards per month
Technical Feasibility
Card production and distribution, as well as billing, proceeded with no impediments. If the trial is to
grow, the processing of AFC data should be transferred from MIT to the MBTA. MIT's prototype
software is written in PERL, and thus is easily transferrable, but should be extended for use in a
production environment.
Card production and distribution
*
"
MIT ordered cards with Mifare chip in addition to chips used for MIT service, magnetic stripe, and
bar code. MIT pays all card costs.
MBTA encoded the cards as LinkPasses.
MIT printed cards and distributed to employees.
"
MIT replaced cards for employees who misplaced their original cards.
e
Billing
*
*
MBTA pulled AFC records of participating cards each month and sent them to MIT to be processed.
MIT wrote the software to process raw AFC data each month and produce a bill. The bill includes an
*
audit trail of fare for each trip stage.
MBTA audited billing records as needed, and billed MIT accordingly.
Revenue potential
*
*
Revenue was $6-$7 per month per prior non-passholding employee.
Although a reference group for a proper counterfactual is not available, the strong likelihood is that
the current employer program at MIT already increases MBTA revenue. Almost % of existing
LinkPass holders without parking privileges used less than $59 per month, and almost 20% used less
than half that.
Table 3 shows the potential revenue gained from Regular Parkers who did not pay for a LinkPass and
New Users (both Occasional/Evening Parkers and those with no parking permit) who are enrolled in the
Mobility Pass program.
Parkers (393)
New Users (179)
Sept 2011
$ 2,039.65
$2,018.10
$7.09
19%
25%
56%
Nov 2011
$2,104.45
$1,940.20
$7.07
20%
28%
52%
Jan 2012
$ 1,673.15
$1,732.15
$5.95
16%
28%
57%
March 2012
Total
$ 1,954.40
$13,437.05
$1,837.70
$13,113.85
$6.63
$6.63
18%
18%
23%
29%
59%
53%
Table 3. Program utilization by type of participant
Current LinkPass Holders (308)
*September 2011 - December 2011 results use the MBTA Pass and MIT Parking Permit data obtained
from MIT Commuter Connections in November 2011. January 2012 - March 2012 results use the data
from February 2012.
Figure 1 displays a cumulative frequency distribution of the MBTA Usage (in average dollars per month
from Sept-Nov 2011) for Mobility Pass holders. The two vertical lines represent the cost of a subsidized
monthly LinkPass ($29.50), and the cost of an unsubsidized monthly LinkPass ($59).
*
84% of LinkPass holders used greater than $29.50 per month (50% MIT subsidy), and 53% of all
LinkPass holders used greater than $59 per month on average. Average monthly usage of this group
was $58.32.
66% of Occasional/Evening Parkers with a LinkPass used greater than the subsidized LinkPass
*
amount and 20% used more than $59, with an average monthly total of $29.61.
5% of regular parkers used greater than $29.50 and 1% used above $59, with an average monthly
usage of $5.08.
e
100%
........90%
80%
70%
60%
0
50%
0
40%
C,
30%
20%
10%
0%
o
Ln
-qL. IJn
0
LA
V-1 r4
0
"%
LA
"
0
M
LA
M
0D
0
LA
V) ). in n
LA
tn
Ict
-Ln ).n (n
I
lq
LA LA
0
LA
An
n
'0
0
W. fA
LA
0
00
LA
00
0
LA
r.
0)
M~
V')
V1
V
V
0
0
A
q
LA
0
LA
V-4
r_
-
r1
0
_1
0
r_4
Monthly usage($
-
Regular .Parkers with MPass (Total = 396)
ammLinkpass
(Total = 308)
-
Occasional/Evening with Linkpass (Total = 71)
New Employees - No Selected Benefits (Total = 147)
Figure 1. Cumulative distribution of MBTA usage September-November 2011
Peak and Off-Peak Use and Weekend Usage
Based on the data from January through March of 2012, 60% of MIT usage of the MBTA system is during
the peak period (weekday 7:00 AM to 10:00 AM and 4:00 PM to 7:00 PM). In Table 4 and Figure 2, only
47% of usage by full time parkers, the largest new group in this trial, is during the peak.
Weekend
PrePeak
AM
Peak
Mid
day
PM
Peak
PostPeak
Trips /
person
/ week
Trips /
person /
weekend
trips/
person /
weekday
Group
size*
Prior T User
12%
5%
30%
13%
30%
11%
7.63
0.90
1.35
287
FuV Th"e
10
4%
21
2
2%
1%
1.3
01
01
3
Occasional
Parker
5%
4%
35%
31%
8%
4.91
0.23
0.94
65
14%
4.76,
0.4
0.85
47
Ne
16%
0314%j27
* used at least once during sample period, January to March 2012
Time indexed to beginning of linked trip
Table 4. One way trips during peak and off-peak
4.0%
Program participants Jan-Mar 2012
Time indexed to beginning of linked trip
Scale is % of total trips within 10 minute period
3.5% ll participants
Full-time parkers
imA
3.0%
---
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
5
6
7
8
9
10
11
Figure 2. Weekday trips by time of day
12
13
14
15
16
17
18
19 20 21
22 23
0
Parking response
MIT also measured the parking utilization of the full time parkers whose use of the MBTA system was
fully subsidized by MIT during this period. There was a statistically significant' reduction in parking
utilization of approximately 4% versus the overall trend during the study period as detailed in Table 5,
despite the lack of marketing by MIT. This demonstrates a potential to decrease parking costs for
employers by participation in a similar program, if offered by the MBTA. The trial also seems to have
resulted in more new employees choosing not to purchase a monthly parking permit, and a number of
conversions from monthly to occasional parking.
Sample
Wave 1
Control
31
757
Relative
Change
Wave 2
Control
65
785
Relative
Change
Weighted
Average
Table 5. Changes in parking usage
For the purposes of parking analysis, the data was broken down into two waves of Mobility Pass
adopters. Wave 1 consists of those who obtained their Mobility Pass in April or May of 2010, and Wave
2 consists of those who obtained their Mobility Pass in April or May of 2011. The table below shows the
relative change in parking for Wave 1 and Wave 2 Mobility Pass holders. This data only includes Regular
Permit Parkers who parked greater than 20 times in the three-month periods specified above, in order
to eliminate suspected incomplete data.
*
Data on MIT parking utilization is confidential and should not be shared in any public release without
express permission.
Conclusion
The MBTA-MIT Mobility Pass Trial Program demonstrated the potential to increase MBTA revenue by
allowing a cost-effective means for employers to extend transit subsidies to previously uncovered
employees, thereby reducing utilization of expensive employer-provided parking. The trial also showed
that usage of employer subsidized passes at MIT was, on average, lower than the face value of the pass,
and a significant portion of this usage was off-peak. The extent to which either of these findings is
replicable beyond the MIT pilot is unknown, and should be the subject of further analysis.
A one-sided hypothesis test shows that the null hypothesis that the relative change is zero can be
rejected with 99% confidence for both Wave 1 (t-statistic = -2.3) and Wave 2 (t-statistic =-3.9).
212
Appendix F
Commuter Rail Average Usage in Days for
April through November 2012
18
0 April Corporate
*
16
April Non-Corporate
14
12
10
8
2 +
0
Zonela
Zone 1
Zone 2
Zone 5
Zone 3 Zone 4
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F. 1: Comparison of Commuter Rail Pass Usage on Bus and Subways - April 2012
213
18
" May Corporate
16
" May Non-Corporate
14
12
0
a 10
4
2
0
Zone la
Zone 1
Zone 2
Zone 3 Zone4 Zone 5
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.2: Comparison of Commuter Rail Pass Usage on Bus and Subways - May 2012
18
N June Corporate
16
E June Non-Corporate
14
12
10
86
4
2
0
Zone la
Zone 1
Zone 2
Zone 3 Zone 4 Zone 5
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.3: Comparison of Commuter Rail Pass Usage on Bus and Subways - June 2012
214
18
m July Corporate
MJuly Non-Corporate
16
14
12
IA
10
8
0
Zone la
Zone 1
Zone 2
Zone 3 Zone 4 Zone 5
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.4: Comparison of Commuter Rail Pass Usage on Bus and Subways - July 2012
18
MAugust Corporate
16
14
N August Non-Corporate
-
12
o 10
8
6
4
2 1
0
m
Zone la
Zone 1
Zone 2
M
-
Zone 5
Zone 4
Zone 3
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.5: Comparison of Commuter Rail Pass Usage on Bus and Subways - August 2012
215
18
" September Corporate
16
" September Non-Corporate
14
to12
10
8
6
4
2
0
Zonela
Zone 1
Zone 2
Zone 5
Zone 3 Zone4
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.6: Comparison of Commuter Rail Pass Usage on Bus and Subways - September 2012
18
" October Corporate
16
" October Non-Corporate
14
12
10
*8
6
2
0
Zonela
Zone 1
Zone 2
Zone 3
Zone4
Zone5
Commuter Rail Zone
Zone 6
Zone 7
Zone 8
Figure F.7: Comparison of Commuter Rail Pass Usage on Bus and Subways - October 2012
216
18
m November Corporate
16
MNovember Non-Corporate
14
12
* 10
1
6
4
2
0
Zonela
Zone 1
Zone 2
Zone 3 Zone4 Zone 5
Commuter Rail Zone
Zone6
Zone 7
Zone8
Figure F.8: Comparison of Commuter Rail Pass Usage on Bus and Subways - November 2012
217
218
Appendix G
Participation Regression Analysis Iterations
[Tables begin on next page]
219
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Estimate
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50% and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBID
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50%Aand <=75%
Subsidy > 75% and <100%
100%/ Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Estimate
Std. Error
0.262
0.176
0.120
Significance
0.061 *
0.027 *
0.032 *
0.039 **
0.046
0.046
0.057
0.068
0.076
0.026 **
0.069
0.039 -
0.084
0.038 *
0.025
0.002
0.052
0.028
0.047
0.051
0.032 *
0.049 ***
0.097
0.022 *
0.022 *
0.020*
0.022
0.050
0.388
0.053
0.029
0.047
0.051
0.032
0.049
0.097
0.022
0.022
0.020
0.022
0.050
0.391
Estimate
Std. Error
0.252
0.189
0.133
0.089
0.048
0.080
0.030
0.003
0.091
0.056
0.162
0.166
0.165
0.127
-0.149
-0.069.
-0.129
-0.2081
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Significance
0.064 ***
0.040 *
0.043 *
0.116
0.075
0.059
-0.030
0.100
0.014
0.002
0.086
0.050
0.161
0.155
0.168
0.125
-0.151
-0.067
-0.127
-0.208
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50%/ and <=75%
Subsidy > 75% and <100%
100%ASubsidy
On-Site Parking
26-75 Employees
Std. Error
0.241
0.216
0.160
Estimate
-
_0.090
0.056
0.160
0.169
***
**
._0.162
*
*
Significance
0.062
0.029
0.033 *
0.028
0.038
0.127
-0.149
-0.068
-0.128
-0.209
0.243
0.208
0.152
0.109
0.069
0.053
0.038 *
0.052
0.028
0.047 0.051
0.032 **0.161
0.049 **0.161
0.097 .0.170
0.022 **0.127
0.022 **-0.150
0.020 **-0.067
0.022 ***
0.0501*
0.389
Std. Error
0.255
0.191
0.135
0.093
0.053
0.036
-0.055
0.063
0.036
0.040
0.036
0.044
0.043
0.055
0.078
0.031
0.001
0.088
0.055
0.165
0.160
0.166
0.125
-0.153
-0.066
-0.130
-0.215,
0.038
0.052
0.029
0.047
0.051
0.032
0.049
0.097
0.022
0.022
0.020
0.022
0.050
0.390
-
Significance
**0.241
**0.216
**0.160
**0.116
|Std. Error
Estimate
0.073
0.030
-0.004
0.087
0.057
-0.131
-0.214
Estimate
*0.069
0.014
-0.086
0.050
**0.161
**0.155
.0.169
**0.126
**-0.150
**-0.067
**-0.127
*
0.038 .
0.052
0.029
0.047 .
0.051
0.032**
0.049 *
0.097.
0.022**
0.022**
0.020 *
0.022 *
0.0501*
0.390
,Std. Error
0.076
0.059.
-0.029
0.100
-0.2091
Significance
0.062
0.032
0.036 **
0.032
0.041 .
0.040
Significance
0.064**
0.040**
0.043**
0.039 *
0.046
0.045
0.057
0.068
0.038.
0.053
0.047.
0.051
0.032**
0.049 *
0.096.
0.022**
0.022**
0.020 *
0.022**
0. 050 **
0O.393
Variables
Intercept
Within0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50% and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.25 Miles of Subway
Within 0.25 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50% and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Any Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
ADJUSTED R-SQUARED
Significance
Std. Error
Estimate
0.323
0.217
0.161
0.116
0.077
0.064
-0.028
0.102
0.068
0.046
0.040
0.043
0.039
0.046
0.046
0.058
0.068
0.039
-0.002
0.053
0.000
0.029
0.054
0.160
0.148
0.172
0.129
-0.150
-0.065
-0.125
-0.206
0.051
0.032
0.049
0.097
0.022
0.022
0.020
0.022
0.050
0.389
0.247
0.230
0.177
0.129
0.083
0.063
-0.026
0.097
0.044
0.024
0.010
0.096
0.048
0.165
0.158
0.169
0.126
-0.152
-0.066
-0.129
-0.211
0.059
0.038
0.041
0.038
0.046
0.046
0.057
0.067
0.023
0.036
0.030
0.047
0.051
0.032
0.050
0.097
0.022
0.022
0.020
0.022
0.050
0.391
Std. Error
Estimate
**
***
**
.
*
**
0.248
0.218
0.160
0.117
0.079
0.065
-0.018
0.102
0.066
0.006
-0.001
0.064
0.040
0.043
0.039
0.046
0.046
0.057
0.068
0.039
0.053
0.029
0.079
0.047
0.130
-0.147
-0.064
-0.128
-0.209
0.019
0.022
0.020
0.022
0.047
0.391
Std. Error
Estimate
0.323
0.217
0.161
0.116
0.077
0.064
-0.028
0.102
0.068
0.045
0.040
0.043
0.039
0.046
0.045
0.057
0.068
0.038
-0.002
0.052
0.054
0.160
0.148
0.051
0.032
0.049
0.097
0.022
0.022
0.020
0.022
0.050
0.390
._0.172
***
**
**
*
**
Significance
Std. Error
Estimate
***
*
*
*
**
.
*
**
***
**
*
*
Significance
***
*
***
**
.
.
-
***
*
**
***
***
0.129
-0.150
-0.065
-0.125
-0.206
Significance
*
***
**
**
**
*
*
**
***
*
Iterations Including Parking Subsidy
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy>50%and<=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
Estimate
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50% and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
Estimate
Std. Error
0.322
0.191
0.141
0.101
0.049
0.064
-0.069
0.111
0.042
-0.045
0.024
0.048
0.040
0.170
0.071
0.154
0.118
-0.124
-0.063
-0.119
-0.228
-0.062
-0.026
Signifiance
0.078 ***
0.046
0.049 **
0.043 *
0.051
0.051
0.069
0.076
0.042
0.060
0.032
0.060
0.070
0.040*
0.063
0.101
0.026
0.027 **-0.125
0.025 *
0.026 ***
0.061***
0.028 *
0.035
0.355
Std. Error
0.315
0.191
Significance
0.076 ***
0.039 ***
0.141
0.102
0.051
0.064
0.042 ***
0.036
0.045
0.045
Estimate
Std. Error
0.339
0.166
0.116
0.078
0.027
0.040
-0.094
0.052
-0.028
0.023
0.047
0.048
0.175
0.079
0.153
0.119
-0.061
-0.122
-0.234
-0.062
-0.028
Estimate
Signifiance
0.077
0.042
0.046 *
0.040 .
0.048
0.048
0.067
0.042
0.059
0.032
0.060
0.070
0.039 ***
0.063
0.101
0.026 ***
0.027*
0.025 *
0.026 ***
0.061 ***
0.028 *
0.035
0.353
Std. Error
Significance
0.324
0.167
0.075
0.035*
0.117
0.076
0.023
0.039
0.031
0.041
0.047
-0.026
0.018
0.050
0.054
0.167
0.083
0.161
0.121
0.122
-0.063
0.042
0.059
0.032
0.061
0.070
0.039 *
0.063
0.101
0.026 *
0.027
0.025 *
0.056
-0.025
0.026
0.056
0.049
0.168
0.090
0.153
0.121
0.122
-0.064
0.041
0.059
0.032
0.060
0.070
0.039
0.063
0.101
0.026
0.027
0.025 *
-0.123
-0.228
-0.059
-0.030
0.026
0.061
0.028 *
0.035
0.351
-0.120
-0.216
-0.060
-0.028
0.026
0.061
0.028 *
0.035
0.350
Iterations Including Parking Subsidy
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy > 25% and <=50%
Subsidy > 50% and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
Variables
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6Miles from CBD
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0%and <=25%
Subsidy > 25% and <=50%
Subsidy > 50%and <=75%
Subsidy > 75% and <100%
100% Subsidy
On-Site Parking
26-75Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
Estimate
Std. Error
Significance
0.078
0.046
0.049
0.043
0.051
0.051
0.069
0.076
0.042
0.060
0.032
0.060
0.069
0.038
0.062
0.100
0.025
0.026
0.025
0.026
0.061
0.026 *
0.326
0.190
0.139
0.102
0.046
0.063
-0.070
0.113
0.042
-0.046
0.021
0.046
0.034
0.163
0.064
0.144
0.113
-0.129
-0.065
-0.120
-0.230
-0.054
Estimate
0.046
0.041
0.170
0.070
0.159
0.120
-0.122
-0.062
-0.120
-0.231
-0.038
0.022
0.356
Estimate
0.343
0.191
0.140
0.101
0.048
0.066
-0.070
0.110
0.042
-0.052
0.022
0.043
0.169
0.063
0.155
0.120
-0.122
-0.062
-0.118
-0.227
-0.038
0.024
Std. Error
Significance
0.065 ***
0.046
0.049 **
0.043 *
0.051
0.051
0.069
0.076
0.042
0.059
0.032
0.070
0.039 *
0.062
0.101
0.026
0.027
0.025
0.026
0.061 **
0.035
0.035
0.356
Significance
Std.Error
0.088 ***
0.046
0.049
0.043
0.051
0.050
0.069
0.076
0.041
0.058
0.297
0.188
0.137
0.104
0.053
0.072
-0.064
0.110
0.049
-0.035
0.060
0.070
0.040
0.063
0.101
0.026
0.027
0.025
0.026
0.061
0.035
0.035
0.356
Significance
Std. Error
Estimate
0.328
0.166
0.115
0.076
0.020
0.075
0.035
0.039
0.031
0.041
0.056
-0.025
0.023
0.054
0.042
0.160
0.083
0.142
0.115
-0.128
-0.067
-0.121
-0.219
-0.050
0.041
0.059
0.031
0.060
0.069
0.038
0.062
0.100
0.025
0.026
0.025 **
0.026
0.061
0.026 .
0.350
***
***
**
*
Iterations Including Parking Subsidy
Variable
Estimate
Std. Error
Significance
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
0.323
0.169
0.121
0.074
0.021
0.075 ***
0.035
0.039 **
0.031 *
0.041
Within 0.5 Miles of Subway
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <100%
0.054
0.033
0.027
0.055
0.134
0.041
0.058
0.032
0.060
0.033 *
100% Subsidy
On-Site Parking
0.119
0.118
0.026 *
0.027
26-75Employees
76-1,000Employees
0.062
0.119
0.025
0.026
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
0.217
0.057
0.026
Variable
Intercept
Within 0.5 Miles of CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Estimate
0.060
0.028 *
0.035
0.349
Std. Error
Significance
0.316
0.168
0.119
0.077
0.022
0.075
0.035
0.039
0.031
0.041
0.055
0.041
Within 0.5 Miles of Bus (not Subway)
Cambridge
Pretax
Subsidy > 0% and <=25%
Subsidy >25% and <100%A
-0.024
0.027
0.063
0.048
0.149
100%Subsidy
On-Site Parking
26-75 Employees
76-1,000 Employees
>1,000 Employees
Free Parking
Partial Parking Subsidy
ADJUSTEDR-SQUARED
0.121
-0.122
-0.064
-0.119
-0.211
-0.058
-0.027
0.059
0.032
0.060
0.0701
0.034**
0.026**
0.0271**
0.0251*
0.026**
-0.061**
0.028*
0.035
0.351
Appendix H
Usage Regression Analysis Iterations
[Tables begin on next page]
225
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy Level
On-Site Parking
Size
Adjusted R-Squared
Estimate
Std. Error
Significance
49.415
4.346 *
-4.175
3.002
-1.931
3.197
-3.635
2.951
-1.793
3.476
3.305
3.513
7.072
4.256
3.329
4.840
-1.382
1.155
-3.147
2.106
-3.002
3.359
-2.679
1.575
0.244
1.582
0.000
0.000
0.016
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy Level
On-Site Parking
Size
Adjusted R-Squared
Estimate
Std. Error
Significance
52.58
3.748 *
-7.222
2.072 *
-4.898
2.386 *
-6.611
2.023 **
-4.718
2.746 .
-1.924
1.076 .
-2.51
2.051
-2.99
3.351
-2.801
1.571.
-0.146
1.564
0.000
0.000
0.0166
Adjusted R-Squared
Significance
Std. Error
Estimate
49.380
4.356 *
-4.048
3.006
-1.758
3.202
-3.429
2.952
-1.717
3.482
3.392
3.522
4.258
7.378
3.501
4.853
-1.428
1.157
2.109
-3.350
3.359
-3.252
1.379
-1.504
1.581
0.036
0.000
0.000
0.013
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
SubLevel
On-Site Parking
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Significance
Std. Error
Estimate
3.7921 *
51.8915
2.0806 **
-6.7104
2.3903
-4.4717
2.0248 **
-6.1608
2.7427
-4.6518
1.076 .
-1.9846
2.0564
-2.3057
3.3574
-3.2431
1.5842
-2.5823
1.5912
-0.6537
1.4978
0.3369
1.6056
1.5826
3.4326
3.5771
0.016
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy Existance
On-Site Parking
Size
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
Size
Adjusted R-Squared
Estimate
Std. Error
Significance
49.820
4.356 ***
-4.473
3.011
-2.204
3.202
-3.918
2.957
-1.981
3.496
2.727
3.544
5.972
4.295
2.687
4.866
-1.470
1.155
-3.146
2.108
-3.172
3.377
0.425
3.613
2.542
2.377
-4.887
3.616
-11.550
7.055
-2.302
1.610
-0.158
1.590
0.000
0.0001
0.019
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Cambridge
Pretax
SubLevel
On-Site Parking
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Estimate
Std. Error
Significance
51.092
3.869 *
-4.995
2.129 *
-2.844
2.440
-4.816
2.036 *
-3.539
2.749
-1.578
2.196
-1.379
2.074
-2.622
3.386
-2.843
1.588 .
-1.047
1.602
0.035
1.500
1.332
1.612
3.180
3.438
0.010
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy >0% and <100%
100% Subsidy
On-Site Parking
Size
Adjusted R-Squared
Significance
Estimate
Std. Error
49.167
4.361 *
-4.087
3.006
-1.996
3.210
-3.604
2.957
-1.878
3.485
3.120
3.532
4.271
7.036
4.868
3.098
1.158
-1.384
2.111
-3.240
3.372
-2.938
-0.213
1.859
1.614
-2.373
1.585
0.155
0.000
0.000
0.013
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
3-4 Miles from CBD
4-5 Miles from CBD
5-6 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
LN(Size)
Adjusted R-Squared
Std. Error
Estimate
0.099
3.736
0.065
-0.021
0.069
0.003
0.064
-0.044
0.078
0.010
0.079
0.110
0.097
0.172
0.112
0.054
0.015
-0.010
0.048
-0.058
0.078
-0.071
0.084
0.012
0.054
0.053
0.084
-0.085
0.163
-0.253
0.038
-0.067
0.038
-0.021
0.011
0.013
0.023
Significance
*
.
.
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
LN(Size)
Adjusted R-Squared
Estimate
Std. Error
3.810
0.094
-0.085
0.049
-0.063
0.056
-0.112
0.047
-0.059
0.064
0.002
0.051
-0.033
0.048
-0.061
0.079
0.008
0.084
0.067
0.054
-0.077
0.083
-0.278
0.163
-0.073
0.038
-0.036
0.038
0.013
0.010
0.019
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Estimate
Std. Error
Significance
3.813
0.088 *
-0.094
0.048 *
-0.066
0.054
-0.117
0.046 *
-0.065
0.063
-0.016
0.014
-0.035
0.047
-0.061
0.078
0.003
0.085
0.069
0.054
-0.081
0.083
-0.276
0.163
-0.071
0.038 .
-0.030
0.037
0.021
0.035
0.050
0.038
0.090
0.083
0.019
Significance
***
.
*
.
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <100%
100% Subsidy
On-Site Parking
LN(Size)
Adjusted R-Squared
Estimate Std. Error Significance
0.092 *
3.785
-0.098
0.047 *
-0.076
0.054
0.046 **
-0.122
0.063
-0.073
0.014
-0.015
0.047
-0.037
-0.063
0.078
0.043
0.007
0.038 .
-0.072
0.037
-0.025
0.010
0.016
0.0161
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Distance to Subway (Miles)
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
FreeParking
Partial Parking Subsidy
26-75 Employees
76-1000 Employees
>1000 Employees
Estimate Std. Error Significance
5.018 *
51.490
2.596 *
-6.521
2.937
-2.787
2.391 *
-5.124
3.099
-4.214
1.219
-1.854
2.374
-1.408
4.490
-2.843
5.246
-1.083
2.985
3.457
4.738
-4.378
7.644
-11.892
2.032
-1.535
2.053
-1.429
2.171
-1.756
2.688 .
-5.134
0.541
1.939
1.049
1.133
2.004
2.271
0.914
4.598
4.204
0.018
Adjusted R-Squared
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
FreeParking
Partial Parking Subsidy
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Estimate Standard Error Significance
3.828
0.113 ***
-0.109
0.058 .
-0.051
0.065
-0.106
0.053 *
-0.072
0.070
-0.020
0.017
-0.020
0.053
-0.067
0.102
-0.023
0.119
0.093
0.067
-0.076
0.107
0.173
-0.267
0.046
-0.055
0.047
-0.029
0.049
-0.066
0.061
-0.098
0.044
0.034
0.065
0.045
0.103
0.110
0.022
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
Within 0.5 Miles of Subway
Cambridge
Pretax
Subsidy >0% and <=25%
Subsidy >25% and <=50%
Subsidy >50% and <=75%
Subsidy >75% and <100%
100% Subsidy
On-Site Parking
FreeParking
Partial Parking Subsidy
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Estimate Standard Error Significance
0.114 *
3.845
-0.097
0.060
0.068
-0.046
0.054 .
-0.100
0.070
-0.064
0.010
0.057
0.054
-0.019
-0.057
0.103
-0.024
0.119
0.093
0.068
-0.070
0.108
-0.273
0.174
-0.061
0.046
-0.036
0.047
-0.069
0.049
-0.094
0.061
0.028
0.044
0.063
0.046
0.100
0.103
0.018
Variable
Intercept
Within 0.5 Miles from CBD
0.5-1 Miles from CBD
1-2 Miles from CBD
2-3 Miles from CBD
LN(Distance to Subway (Miles))
Cambridge
Pretax
Subsidy >0% and <100%
100% Subsidy
On-Site Parking
FreeParking
Partial Parking Subsidy
26-75 Employees
76-1000 Employees
>1000 Employees
Adjusted R-Squared
Significance
Estimate
Standard Error
3.819
0.112 *
-0.104
0.058
-0.052
0.065
-0.107
0.053 *
-0.071
0.070
-0.021
0.017
0.053
-0.021
-0.066
0.101
0.056
0.017
0.046
-0.057
0.047
-0.020
0.049
-0.060
0.061
-0.099
0.044
0.035
0.045
0.064
0.1031
0.130
0.015
234
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241