Parking Cash Out Program

A parking cash out program can offer commuters the option to receive a cash benefit in exchange for giving up a parking space.¹ This option has been favored by employers who normally offer free or subsidized parking for their employees and instead provide employees its equivalent cash value if they do not drive to work. This service can also help company’s reach their sustainability goals by reducing their carbon footprint if fewer employees drive alone to work.

How it Helps

Offering a parking cash out option incentives employees to find alternative forms of transportation, such as carpooling, biking, walking, or using public transit. By discouraging solo driving, this can produce social benefits by indirectly lowering vehicle emissions and noise pollution. Additionally, a parking cash out program will likely save employers money in the long-term by reducing the need for companies to rent parking spaces which is a costly fee in many urban areas.²

Implementing

Incentives:

Providing financial incentives, such as providing bicycles or cash bonuses for not driving to work, can result in more employees choosing to participate in the program. Companies may choose to offer reduced price transit passes for employees to encourage the use of public transportation services. State governments can also provide tax benefits for companies who adopt this sustainable parking policy.

Equity Concerns:

There are some concerns that employer-paid parking and cash out options can result in wage discrimination by resulting in a higher total compensation for employees who drive to work.³ In addition, certain individuals may be more likely to afford living closer to work and are able to utilize pedestrian and bicycle infrastructure or public transit. Lower-income individuals might live too far from work and rely on parking availability.

Examples

1) California’s Parking Cash Out Law

California’s state law requires companies with 50 or more employees who provide subsidized parking to offer a cash allowance option for employees who give up their parking space. The goal of this law is to reduce both commute trips and vehicle emissions.

https://ww2.arb.ca.gov/resources/documents/californias-parking-cash-out-law

2) Seattle Children’s Hospital’s Transportation Plan

Seattle Children’s Hospital devised a comprehensive transportation plan with the goal of reducing the number of commuters who drive alone to work. The hospital offers free transit passes to all employees, provides free bikes to employees who bike to work at least two days per week, and provide paycheck bonuses to employees for every day they do not drive to work.

https://usa.streetsblog.org/2015/05/08/how-seattle-childrens-hospital-took-the-lead-on-healthy-transportation/

3) RideAmigos

RideAmigos offers mobile and web-based commuter engagement solutions with the primary goals of reducing traffic congestion, environmental impact, and parking demand while making the community healthier and safer. RideAmigos provides incentives to road users to encourage them to utilize public transportation. They offer various transportation demand management programs for employers, universities, and agencies to find more sustainable transportation options.

https://rideamigos.com/

1. Shaheen, S. A., et al. (2007). Reducing Greenhouse Gas Emissions and Fuel Consumption: Sustainable Approaches for Surface Transportation. IATSS Research, 31¹, 6-20. https://doi.org/10.1016/S0386-1112(14)60179-5

2. Actionfigure. (2019). Offering a parking cash-out program. https://actionfigure.ai/blog/commuting-cash-out-programs-parking-public-transit-employee-incentives-decrease-traffic-how-to-create-effective-transit-programs-in-the-office/

3. Shoup, D. C. (2005). Parking Cash Out. http://shoup.bol.ucla.edu/Parking%20Cash%20Out%20Report.pdf