Carpooling apps 'lyfting' commuting burdens for employers

One of the biggest problems Hugh Thomas deals with every day is getting employees to work.

Thomas, managing partner of Onin Staffing, an Alabama-based industrial staffing company, is not alone. A surge of new transportation apps aims to address a modern workplace conundrum: longer and more expensive commutes.

As commuting costs rise, companies are making it a priority to offer more money-saving benefits, such as carpooling or telecommuting. Many of these transportation benefits are not new, but they are being rebranded in a way that draws talent from outside of major urban areas. Experts say these benefits can be attractive to candidates who may live far away from the office or in places where there is little, if any, public transportation.

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The Uber Technologies Inc. application icon seen in an arranged photograph taken in Bangkok, Thailand, on Friday, March 9, 2018. Grab, the dominant ride-hailing service in Southeast Asia, is close to finalizing a deal to acquire Uber's business in the region and may sign a deal this week or next, according to people familiar with the matter. Photographer: Brent Lewin/Bloomberg

Three months ago, Onin began offering Hytch, a smart phone application that pays employees several cents per mile to carpool, to workers at a Nissan manufacturing plant in Smyrna, Tennessee. Thomas is hoping that Hytch will become a way to reduce the cost of transportation, and make sure employees keep showing up for work.

“I’m hoping that it will open up a world for people who are on the outskirts of where my clients have locations, so they can better justify the price value of the travel versus their pay rate,” Thomas says.

Now, a variety of tech companies are developing smartphone applications and other technologies to meet these needs. These platforms incentivize employees to commute via Uber-style ride requesting or organized carpools, while others reward employees who drive in groups or take public transportation.

David Straus, executive director of the Association for Commuter Transportation, says more companies are implementing cloud-based technologies and smartphone applications that are appealing to younger workers. They’re also marketing themselves as environmentally friendly, touting carpooling as method for limiting carbon emissions.

“A lot of these new companies that are coming into the fold, are putting a new spin on it, they’re bringing in a kind of innovative, cool feel, which makes it a bit more attractive to individuals,” he says.

Hytch allows employers to allocate funds to pay employees a few cents every time they carpool. Employers can put a virtual geographic boundary around a certain location, like their parking lot. Every time someone “hytches” a ride to that area, says Mark Cleveland, CEO and co-founder of Hytch, they get a small payout from their employer.

“We put a system in place so people have an incentive for discovering and creating smarter ways to move,” Cleveland says.

But Hytch is not the only app available that helps employers better manage their commuter benefits. There are a number of technological solutions that help employers incentivize different kinds of commuting.

Rob Sadow, chief executive and co-founder of Scoop, a Bay Area company that organizes carpools for employers, says their average user travels around 18 miles to work. The company currently works with employers including LinkedIn and Expedia. Usually, he says, commuters are coming from places that do not have solid public transportation.

“They don’t have the ability to take the train and are stuck,” Sadow says.

Cloud-based commuter management platform, RideAmigos says employees can use their technologies to organize carpools and earn rewards for ride sharing, teleworking or taking public transportation. The company also helps employees plan their trips and provides opportunities for alternative commute options, like van pools, biking or walking. Kathryn Hagerman, director of marketing at RideAmigos, says these rewards span anywhere from small amounts of cash to gift cards to big name retailers. People with longer commutes typically earn more points, says Hagerman.

“More recently we’ve been seeing that many employers want to do more with commuter benefits,” she says. LinkedIn, Patagonia and Google are just a few of the companies currently using RideAmigos.

Luum is another commuter management platform that customizes commuter benefits for employers. Kelly Hostetler, customer success manager at Luum, says the company works with employers to help manage their benefits in a way that is both flexible, and meets employee’s needs.

Employees can sign in to the Luum web portal or their mobile app to apply for transit cards and parking, locate rideshares, earn rewards and log how they got to work. Then, she says, Luum uses enterprise and third party integrations to aggregate data from the platform and provide it to the company, so they can better understand how their commuter benefits are working.

“It’s giving them that flexibility in their daily commute, I mean that’s something that we do every day, twice a day, it’s a big impact on our life,” Hostetler says. “Having an employer that includes that in their benefits package, and includes an easy tool like Luum that aggregates all of that for you is, I think, a really powerful message the employer can send.”

But it’s not just about attracting employees. Outsourcing commuter benefits could also save companies money, Straus says. For example, an employer would have to hire several full-time staff members to organize carpools, but using an outside service saves time and makes it more likely that employees will actually use the benefit. Many ride shares match individuals across a geographic area, instead of just within a single company, making it more likely that employees will find a carpool and return to the app next time, Straus says.

But these types of commuter benefits may not be for everyone. Carpooling and rideshares are very geographically dependent, Straus says. In the Bay area, where there is a lot of traffic, employees expect companies to offer carpools and shuttles. By comparison, however, in a city like Boston where there is a robust public transportation system, he says, carpools aren’t as popular.

But for Thomas, commuter benefits aren’t just a nice addition to the benefits package, they are a necessity. Thomas says Onin will expand Hytch to other clients in the coming months and he hopes it will make it easier for employees to get to work. For Thomas, the app is answering a very simple yet crucial question for his employees: How do I get to work?

“When I first heard about Hytch “I thought wow, this is a good answer if we can make this work,” and I know we can,” he says.

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