Why companies are going the extra mile to beat congestion

Americans are no strangers to spending hours of their lives stuck in traffic jams as they make their way to and from work.

November 28, 2016

Congestion has become so bad in many U.S cities that commuters lose 42 hours a year – around a full week’s work, up from 18 hours in 1982, according to the 2015 Urban Mobility Scorecard.

The worst places for gridlock include Los Angeles, San Francisco, Seattle and New York City. Figures from navigation services firm TomTom show they all suffered from rising levels of congestion over the past year. Yet there’s a good reason for having so much traffic on the roads. “We noticed that cities that went up significantly are also employment hot spots,” Nick Cohn, a senior traffic expert at TomTom tells USA Today.

Companies tackle congestion

Now companies are fighting back against the issues caused by congestion whether laying on transit buses from public transport hubs or introducing car-pooling schemes.

“With ease of commute considered a key job perk today, I see many more firms using transit-related incentives to attract and retain talent,” says Tom Poser, a JLL executive vice president representing tenants throughout the Bay Area. “Many companies offer pre-tax ticket purchase programs for parking and various modes of public transport like train, subway and water taxi. Some building owners even install bike storage areas and locker rooms in buildings to help tenants attract employees in crowded cities where driving is not a viable option.”

Corporate buses taking employees to the office may not be a new idea but they are a popular one, especially between San Francisco and Silicon Valley. When Google launched its shuttle service for its Bay Area employees back in 2004, it served about 150 employees at the time. Today, Alphabet – Google’s parent company – operates a fleet of more than a hundred biodiesel buses and estimates that more than half the company’s 11,000 Bay Area employees use the service on a daily basis. Amazon recently joined the club with its Amazon Ride service shuttling employees to its two Seattle office locations.

There are also greener options around. Google also offers an electric car sharing program and like many of its fellow tech firms, supports bike-to-work programs.

Growth in public transport

While cars remain the preferred mode of transport by far in the U.S., public transport is gradually becoming a more popular option. In the first quarter of this year, U.S. commuters took nearly 2.6 billion trips using public transit, according to the American Public Transportation Association (APTA). While this represents only a 0.3 percent increase over the same quarter in 2015 during the same period, gas prices also became around 20 percent cheaper during the same period.

Many cities are making significant improvements to their public transport networks. In Seattle, for example, the public transit agency completed the expansion of its Link light rail system earlier this year, connecting Seattle-Tacoma International Airport, downtown, and the University of Washington main campus in the city’s northerly University District. In San Francisco, bigger and better regional transit options are coming to the Bay Area. BART and Caltrain are expanding and, in the next decade, Caltrain may provide the tracks for a High Speed rail service linking San Francisco to San Jose.

And as public transport improves, more companies are choosing to base themselves near transit stations. JLL research of office buildings located more than 30 metro stations in the San Francisco Bay area located in the found that those within a ten-minute walk – about a half a mile – from many of those stations command a 30 percent rent premium over buildings that were further away. On average, those same close-in buildings tend to have vacancy rates about three percentage points lower than buildings further away.

“Bay Area employers want to be located next to BART or Caltrain stations to ease their employees’ commutes,” says Chris Roeder, international director at JLL. “With the Bay Area near the very top of the list of most traffic congested areas in the country, employers realize that removing the need to drive from the live-work equation means happier and more productive employees. Office buildings within an easy walk of train stations and amenities such as restaurants, cafes and parks, are among the most appealing in the market.”

A U.S.-wide impact

It’s equally having an impact in other U.S. cities. In Atlanta, a number of big name companies including NCR, Worldpay, State Farm, athenahealth and PulteGroup all made the decision to locate their headquarters or regional hubs close to sizeable public transport hubs including Metro Atlanta Rapid Transit (MARTA) stations to help reduce commute times for employees.

Meanwhile, when gas station retailer Sunoco was scouting a new HQ location in Dallas, one of the reasons it selected 8020 Park Lane was its proximity to Dallas Area Rapid Transit (DART). And in Chicago, McDonald’s decision to move its headquarters from suburban Oak Brook to the city’s West Loop neighborhood will put its employees one block from the Chicago Transit Authority (CTA) station at Morgan/Lake. “McDonald’s has identified the keys to success to today’s global market as talent, technology, and access to transportation networks,” explains Chicago Mayor Rahm Emanuel.

It’s a good point to note: spending hours sitting in traffic each day does little to benefit companies or their employees.