How to Improve Employee Parking Programs and Reduce Parking Demand—Without the Stress

Despite its prevalence, employee parking may be the most overlooked aspect of the commute. After all, it’s an inevitable need: people drive; people need to park. Is there anything more to think about? Actually, the answer is a resounding yes.

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There are several approaches employers can take to save money and reduce parking demand—and none of them require administrators to put in extra hours long-term to make them happen. In fact, many strategies can actually reduce the amount of time and energy your team spends managing parking programs. Here’s how.

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Which employers are best positioned to reduce parking demand?

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Not all parking predicaments are created equal. Employers in the best starting spot usually have some combination of the following:

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• An office well-connected to non-driving alternatives.
  Naturally, the best way to get people out of cars is to get them into another mode, whether that be a bus or a bike lane. 
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• Control (in one way or another) over parking spaces.
  In some cases, this may mean that you pay a parking operator for the spaces your employees use. Or, you may just own the lot. Either way, organizations with an existing stake and involvement in their parking set-up will have the best vantage point from which to manage change.
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• Struggle with demand or supply.
  Too many people want to drive? Not enough spaces for everyone to park? It’s time to think beyond the lot.
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• Hybrid work scheduling.
  Organizations that don’t require every employee to come in every day can often make big improvements to their parking programs.
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Now that we have conditions in place (again, note that most employers won’t fit all of these traits, and that’s okay) it’s time to look at the specific ways employers can upgrade their approach to parking.

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Employer-managed parking: Daily rates and better data

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For employers that own or manage their own lots, parking can quickly become an afterthought. Parking lots are often open to anyone, or employees pay on a monthly basis, if at all, to access them. This set-up can result in a demand for spaces that threatens to outstrip supply. Luckily, a few tweaks can make a major difference in employee behavior:

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• Smart infrastructure.
  Parking gates and license plate readers allow you to oversee access to your lot so that only approved employees are granted access. (Bonus: In addition to improved security, these measures will earn points toward green building certifications.)
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• Daily parking.
  Rather than letting anyone who shows up take a spot, consider requiring employees to reserve parking spaces ahead of time for each day they wish to park and charge them a small fee. By requiring an extra step, you’ll nudge employees to consider alternatives to driving, unlock a new revenue stream, and ensure people who do decide to drive are known that there’s a space reserved for them. This update is especially useful for employers who use hybrid work schedules. If different groups of employees come in on different days, you can reduce the total number of spaces you provide without forcing anyone to abandon their car. 
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• Data collection.
  Between smart infrastructure and parking reservations, you’ll have a nuanced view into how your parking is used and by whom, which will allow you to make evidence-based policy updates moving forward. 

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Externally managed parking: Spending cards and daily rates

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If you’re like most employers who cover the cost of employee parking, you purchase monthly passes for each individual who drives to work. This system works well enough, but it may leave you footing a bigger bill than you need to, especially if you operate a hybrid working model. (Not to mention, this system can also leave you manually managing reimbursement claims from one-off drivers.) Instead, try implementing:

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• Spending cards.
  Rather than giving money to the third-party operator, give it to employees via spending cards. By providing funds directly to employees, you won’t have to coordinate with parking providers for each new pass and you’ll make your parking policies more equitable by ensuring everyone has equal access. 
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• Daily rates.
  If your lot supports daily parking, allow your employees to purchase daily passes with their spending cards each time they drive in. This way, you’ll only pay when employees actually park. Plus you’ll see less unnecessary admin work from occasional drivers, who themselves won’t have to front the cost of the space and file a reimbursement claim. 
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• Data collection.
  With trackable cards, you’ll get better insights into when (and how often) people park, creating a knowledge base from which to build your parking policies.
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Parking cashouts: Exchange a pass for cash (or perks!)

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For employers that provide free spaces for employees, don’t pay for spaces they don’t use, or don’t have enough spaces to meet demand, parking cashouts are emerging as a popular strategy. Parking cashouts—which essentially let employees trade in a parking pass for a monetary reward—save employers money while also being a popular employee perk. 

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In Washington, D.C., offering a parking cashout is now required by law!

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Legal mandate or no, here’s how to cash-in on cash-outs:

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• Value modeling.
  Using data about employee commutes, administrators can model potential cashout values to determine the optimal cashout amount to offer. The perfect number encourages high adoption rates without exceeding the amount that would have gone toward buying the parking passes. 
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• Perks that work.
  Traditionally, employees in cashout programs have simply received extra money in their paycheck. A better way? Offer employees money (which doesn’t roll over month-to-month) on spending cards specifically earmarked for alternative commutes and other benefits. This streamlined process eliminates payroll while giving administrators more oversight of. Plus, with funds that expire monthly, you’ll only pay for the expenses employees actually incur. 
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• Data and oversight.
  With flexible spending cards, admins can specify where cashout money can be spent. For example, you might authorize its use only for wellness or food purchases, in addition to public transit, ride-, and bikeshare trips. By reviewing data on how that money is actually used, you can simplify your reporting, budget better, and tailor your rewards to match the things employees actually want. 
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Takeaways

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Driving may dominate the commuting landscape, but that doesn’t mean driving behavior can’t be changed. With new approaches to parking policy that lean on data and incentivise non-driving alternatives, administrators can reduce their parking demand and give employees programs and perks they’ll like even better. 

Learn how employers use Commutifi to provide better employer-managed parking programs by talking to a Commutifi Expert today.

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