Hey Commuters: Take the Money and Walk

Bosses are offering employees cold, hard cash to give up their “free” parking space at work. And it may be a win-win for everybody—including Mother Earth.

June 23, 2017


Does your employer offer free parking to you and your coworkers?

If so, it’s probably not billed as a fringe benefit, at least not in the same category as medical or dental coverage, vacation pay, or a gym membership allowance. But that’s exactly what it is. Free parking, of course, isn’t really free: All those parking spaces constitute real estate, and as everybody knows, real estate costs money. Employers have to either buy or lease the land on which their workers park; if they lease it, they pay rent on each space, and if they own it, they still pay construction, maintenance, and security fees.

Still, most companies and organizations that offer free employee parking are willing to cover the costs, since they believe that it’s key to getting their employees to the workplace—which is key to productivity. And also because, let’s be frank, most workers have come to expect it.

But the promise of free parking significantly affects our transportation choices. Studies have shown that it actually encourages people to choose driving over walking, biking, or using public transportation; one survey of 5,000 commuters and employers in Los Angeles found that free workplace parking increased the vehicle miles driven per employee by 33 percent. And since most drivers don’t carpool, the so-called “free” parking your boss subsidizes also subsidizes your personal contribution to greenhouse gas emissions, air pollution, and traffic congestion.

As for those of you who opt for other, perhaps greener forms of transportation? Well, your boss is essentially rewarding your driving colleagues with a generous bonus every day, even though a fair number of them would drive no matter what. And your reward? Virtue.

It’s a pretty messed-up system, when you stop and think about it. And some folks have been thinking about it a lot. One of them is Donald Shoup, a city-planning professor at the University of California, Los Angeles, who studies the economics, both macro- and micro-, of urban parking. Shoup has looked at the parking issue from every conceivable angle, but many of his theories and ideas stem from the basic observation that since “free” parking isn’t really free, we can (and should) experiment with shifting the externalized costs of urban parking. Doing so, he maintains, could help us achieve a number of desirable ends: less traffic, less pollution, invigorated urban cores, and replenished city coffers, to name just a few.

One of Shoup’s ideas is called—illustratively if inelegantly—“parking cash out,” and lately it’s been gaining quite a bit of traction. In a parking cash out program, employers give their workers a choice to keep their allotted parking spot or to trade it for, well, cash. (Modified versions might have employees receiving a public transit voucher or a bicycle maintenance allowance.) And wherever this program is enacted, an interesting thing tends to happen: Not only do the non-drivers happily reap their reward, but a fair number of drivers actually choose to ditch their parking spots—and their daily car commutes—in favor of an alternative.

In Washington, D.C., District council members have recently put forth a bill that would make parking cash out the norm rather than the exception. If the Transportation Benefits Equity Amendment Act becomes law, D.C. would become the first major American city to compel employers to give non-driving employees a benefit that’s considered of equal value to a free parking space.

Companies trying out the idea have already reported successful results. When Spectrum Health, a Michigan health-care provider, offered nearly 400 employees working out of its downtown Grand Rapids office the choice between a parking spot and a $75 monthly stipend to offset alternative commuting costs, more than a quarter of its workforce opted for the cash. One Grand Rapids city official estimates that if other employers followed suit and a quarter of the city’s downtown commuters ditched driving, more than 2,000 parking spaces would free up—and local workers would collectively receive more than $67 million to be used toward bikes, bus fares, or a better pair of sneakers.

That’s a lot of money for a city the size of Grand Rapids. But on the larger scale, let’s consider the huge emissions savings. A study commissioned by the California legislature concluded that a parking cash out rule, instituted and enforced statewide, would lower the number of car trips by up to 43,500—and greenhouse gas emissions by 0.8 tons—every single day. In recognition of this, California actually passed its own parking cash out law, although it applies only to businesses with more than 50 employees operating in certain zones.

Typically, our debates over whether and how to reduce carbon emissions are framed in antagonistic, zero-sum terms: If this side wins, then which side loses? If this group benefits, then who pays?

But parking cash out is in a different category and may be genuinely described as win-win across the board. It addresses the problem of too-scarce parking directly and efficiently. It cuts down on urban congestion and emissions, and through purely voluntary means. It expands choice rather than limits it. Employers like it, workers like it, and cities like it. So, would you like it?

onEarth provides reporting and analysis about environmental science, policy, and culture. All opinions expressed are those of the authors and do not necessarily reflect the policies or positions of NRDC. Learn more or follow us on Facebook and Twitter.

Midwest Dispatch

A surcharge on trips taken with ride-hailing services could reduce traffic, cut emissions, and help fund much-needed public transit improvements on the South and West Sides of the city.

Rockies Dispatch

City officials see dedicated bus corridors, scooter-share programs, and protected bike lanes as key to greening their transportation network.

Southeast Dispatch

The North Carolina city knows that as it grows, its residents will need (and want) to get out of their cars and catch the nearest bus, train, or streetcar.

Western Dispatch

In this sprawling Bay Area city, more than half the carbon footprint comes from cars and trucks. So the city is focusing on growing its network of safe bike paths—and fast.

Southwest Dispatch

By tackling transit, ride sharing, and more, the Texas capital hopes to embrace its big-city identity.

Policy Primer

In New York, a tax on driving downtown would also generate sorely needed funding for the transit system that most residents rely on for their daily commutes.

Western Dispatch

In addition to cutting carbon pollution, Mayor Kevin Faulconer’s climate initiatives could give a boost to public transit and affordable housing options.

onEarth Story

California’s proposed bullet train is in trouble, while a Texas project is meeting resistance. What’s going on?

Western Dispatch

The Rose City, a winner of the American Cities Climate Challenge, will reduce emissions as it revamps its transportation system—part of a new strategic plan called Central City in Motion.

onEarth Story

More and more European cities are effectively banning automobiles from their city centers—and it seems to be working out just fine for local businesses.

Personal Action

Everything you need to know to switch to an electric car today.

onEarth Story

In his new book, urban planner Jeff Speck equips citizens with the tools they need to make their cities healthier—by making them more walkable.

Mike Mozart/Flickr
onEarth Story

Gas is crazy cheap. Car sales are through the roof. So why isn’t taxpayer support for mass transit tanking?

Cupola Media
onEarth Story

Putting roadways on “diets” can make biking and driving safer at the same time.

Image courtesy of Tesla Motors
onEarth Story

It appears that 325,000 revved-up Tesla fans did—and they may represent just the tip of the iceberg.

Richard Yeh/WNYC via Flickr
onEarth Story

Millennials don’t just communicate differently from their baby boomer parents—they commute differently, too.

Rockies Dispatch

Governor Hickenlooper wants to rev up the transition away from gas power, but there are a few roadblocks to clear.

Join Us

When you sign up you'll become a member of NRDC's Activist Network. We will keep you informed with the latest alerts and progress reports.