Transportation policies have long been a desirable fringe benefit. Benefits like car allowances, public transportation subsidies, commuter benefits and company cars are alluring and can even be a status symbol among employees.

In 2024, the role of transportation policies looks different than it used to. While transportation policies used to be stratified primarily by status or seniority, today they depend more on an employee’s role in the company. Salespeople are more likely than managers or executives to be eligible for a company car, with 95% of companies listing the necessity of a car as the main business need they considered when allocating benefits.

How company roles influence transportation benefits and policies

Transportation benefits accomplish two purposes: they provide an incentive to employees in addition to their salary and they help employees get to work and perform their jobs. Together, those two factors determine who in your organization is eligible for transportation benefits.

Company cars

Company cars are one of the most common types of transportation benefits. These can be company owned but are more commonly leased. In Mercer’s 2024 Transportation Policies survey of U.S. employers, 24% of companies offered company-owned vehicles as transportation benefits, compared to 49% that offered company-leased vehicles.

Sales professionals are the most likely to receive benefits for a company car at 71% for company-leased cars and 57% for company-owned cars. That’s 5% to 9% higher than executives and 14% to 27% higher than managers. Because sales roles frequently involve large amounts of travel, company-owned or company-leased cars are a relatively common fringe benefit.

Executives are most likely to use a company vehicle for both business and personal transportation, although across roles, a majority of employees who receive this benefit can use the vehicle for personal use. The types of vehicles provided also depend on the employee’s role. Executives and organization heads favor SUVs, full-size, and luxury vehicles, while sales professionals and managers more often use standard or midsize vehicles.

Car allowances

While company cars are the original poster child for transportation benefits, car allowances are the most common type of transportation policy. Around 74% of companies surveyed offered car allowances.

Unlike company cars, which favor sales professionals, car allowances favor executives. About 65% of executives are eligible for a car allowance, compared to only 58% of salespeople and 44% of management. Unlike company cars, in which the business use of the vehicle is a primary factor, the most common factor in determining car allowances is the job level/salary band of the employee.

Subsidized parking

In rural and suburban areas, it’s common for businesses to have parking lots. In metropolitan areas, parking is at a premium and can quickly become a major expense. While less common than car allowances, 19% of employers offer parking subsidies.

However, subsidies vary by region because not all areas require paid parking. At least 40% of employers who offer subsidized parking fully cover the cost of parking, but another 40% only cover parking in some parts of the country.

Despite only 5% of employers reporting that parking subsidies depend on job level, 95% of managers are eligible compared to only 65% of salespeople.

Public transportation subsidies

Another way of combating expensive parking is to utilize public transportation. Many employers incentivize their employees to use public transportation by offering subsidies to contribute to the cost of fares. However, only 31% of employers who offer these subsidies cover the entire cost of public transportation.

Around 92% of managers are eligible for public transportation subsidies compared to 74% of salespeople.

Different transportation benefits for different needs

Generally, higher ranking employees are eligible for more transportation benefits. For instance, 100% of executives were eligible for walking/cycling allowances, compared to 80% of professional salespeople. However, sales professionals are most likely to be eligible for both employer-owned and employer-leased company cars and by a significant margin.

This reflects the more general change of transportation policies being needs based in addition to being incentive based. Non-sales professionals have the lowest eligibility for company cars and car allowances but relatively high eligibility for parking and public transportation subsidies. Sales professionals have high eligibility for company cars but only 10% are eligible for a personal driver, compared to 70% of executives and heads of organizations.

Green transportation is slowing down

While many companies have taken tangible steps toward eco-friendly, green transportation, efforts have stagnated or even regressed in recent years.

In 2022, 20% of employers reported limiting vehicle options to those with lower CO2 emissions, with another 21% reporting plans to implement such a limitation. By 2024, only 17% still had such a limitation in place.

Similarly, 30% say they are limiting or reducing their number of company cars in 2024, down 3% from 2022. Although 25% of employers say they’ve added hybrid vehicles to their fleet, up 3% from 2022, 59% of company fleets don’t contain a single hybrid or electric vehicle and only 2% offer monetary incentives to encourage the use of hybrid vehicles.

While many positive changes are happening in the world of green transportation policies, businesses still have a long way to go to meet their environmental goals.

Are transportation policies relevant in 2024?

While the role of transportation benefits is subtly changing, they aren’t going anywhere anytime soon.

Before COVID-19, company fleets accounted for 1 in every 5 cars sold. While post-pandemic recovery has been slow, especially among commercial fleets, total fleet sales grew by 28% from 1,600,000 in 2022 to 2,100,000 in 2023.

Fringe benefits like company cars, car allowances, and public transportation subsidies help employers stay competitive. More than just being a symbolic incentive, transportation benefits also serve a business need by getting employees where they need to go.

Transportation benefits are essential not only for attracting talent but also for facilitating transportation.

Each year, Mercer analyzes data on transportation and policy costs across 12 key topics in 75 markets, including the U.S., Canada, the U.K., China, and others. To learn more, start with our Transportation & Policy Costs, or give us a call at 866-605-1031.