Why commuting is travel management's next frontier

When Germany’s leading drugstore retailer, dm-drogerie markt, commissioned an audit of the CO2 emissions caused by its employees’ commuter travel, the company received an almighty shock. “We found out our commuting was about ten times as high as our emissions from business travel,” says travel management implementation project manager Richard Thompson III. “That figure will probably be corrected slightly since there is still some data missing on business travel, but the fact commuting travel was ten times as high was a bit astounding.”

The exponential difference is not uncommon. Yet all too often the environmental impact of the daily commute is overlooked and management of it non-existent, according to Sam Ryan, co-founder and CEO of Zeelo, a UK-based provider of employee bus shuttle services.

The reason scant attention has been paid to commuting is obvious. “The cost of commuter transportation has not been borne by companies in the past. It’s the responsibility of employees to figure out how to get to work every day,” Ryan says.

However, that attitude is changing fast. Commuting “has become a C-suite problem”, says Ryan. Consequently, he adds, it “becomes a significant cost for companies if they start to assume in some way the cost of the commute.” And once commuting becomes a cost to a company, it needs to be managed actively. Facilities and human resources are often involved but, says Ryan, “Increasingly we’re seeing that responsibility starting to reach out to travel managers and procurement teams.”

There are two major reasons commuting now earns C-suite attention, according to Ryan. The first is the environmental harm. Like business travel, commuter travel appears as a separate line item in the environmental, social and governance reporting that around 50,000 companies must submit from next year to comply with the European Union’s Corporate Sustainability Reporting Directive.

“Commuter travel is already on the radar of the very largest companies and with the incoming legislation we will see a trickle-down effect to smaller businesses,” says Ami Taylor, an associate consultant with travel management consultancy Festive Road.

Under the directive, companies will have to report not only their current emissions caused by commuter travel but their targets for the following and future years. Those figures will often make grim reading. In 2021, a UK government report stated that commuting in 2019 accounted for one in five car journeys in the UK, with vehicle occupancy 26 per cent lower than for car journeys as a whole. “If we could reduce single occupancy commuting journeys by 10 per cent, this could… save 500,000 tonnes of CO2 a year,” the report concluded.

Changing habits

Yet important as sustainability is, what has really accelerated C-suite attention “is the labour shortage, where companies are struggling to attract and retain talent,” Ryan says. “Depending on which study you look at, commuting is 30-60 per cent of the barrier discouraging people from returning to the office.”

Like business travel therefore, commuter travel has become a complex, multidisciplinary issue requiring a sophisticated wide-thinking response. In Germany in particular, travel managers are evolving into mobility managers, for whom commuter travel is a natural responsibility to assume.

Thompson is a case in point. His role now ranges far beyond business travel procurement to embrace helping employees thinking harder about why they should travel, and then, if they do, what mode of transport they should use. That could be trains but also cars. Thompson looks at everything from car pool vehicles to car rental, car share, taxis and even e-scooters. “All these mobility matters we’re trying to combine into one because you need everything to come together to find the best way to be more sustainable,” he says.

The other widening of boundaries is driven by the major Covid-induced rethink companies had about where their people work, especially at home. Like business travel, the best way to reduce commuting emissions is not to commute at all.

dm started encouraging home working some years before Covid for environmental reasons, yet still has heavy commuter-related emissions. Thompson and colleagues are therefore intensifying their efforts to find smarter solutions. For example, the dm head office is in Karlsruhe but some employees live in Frankfurt, 138km away. “Instead of having them come to Karlsruhe, why not rent an office in Frankfurt once or twice a week and they can work from there?” he says.

For commuter travel that cannot be eliminated, the process of formally managing the category is developing similar characteristics to business travel management. As always, data comes first. “Establishing the picture of what’s going on is really important,” says mobility consultant Mike Galvin. Taylor agrees. The most frequent method she encounters is measuring how far employees travel on different modes of transport with their attendant rates of CO2 emission.

The carrot and the stick

Next comes policy. Broadly speaking, says Galvin, companies need to deploy both carrots and sticks with their workforce. The same approach is already evident in government policy. For example, one stick introduced by local authorities, including Nottingham in the UK, is a levy per parking space on company premises. On the other hand, the UK government offers tax incentives on bicycles bought or hired by employees through salary sacrifice schemes.

At company level, sticks can include restricting the number of parking spaces offered to employees. Carrots can take on many forms. These include bike loans and shower facilities for cyclists, rail season ticket loans, priority parking spaces for commuters who share vehicles, and assistance with electric vehicle subscriptions. “In Germany,” says Taylor, “we have seen an increase in mobility budgets which give employees a pot of money they can use for public transport.”

Perhaps most ambitious of all is a private bus service, as offered by companies like Zeelo which, Ryan says, has 150 corporate customers in the UK. The average seat capacity of a Zeelo bus is 40 and average number of people on board is 32. “We are taking about 25 cars off the road for every bus,” he says.

Some employers offer free bus rides; others at a subsidised price. Experience has taught Ryan that the bus option needs to be at least 20 per cent cheaper to persuade employees to forsake the convenience of self-driving.

Zeelo is also further evidence of why commuter travel is becoming a manageable category: there is an emerging group of suppliers available to be managed. Another example is Kinto Join, a multimodal commuting app. Kinto Join connects and organises car pooling for employees who live near each other. It also verifies the journeys of “active” commuters (those who cycle or walk), potentially allowing them, and indeed car sharers, to be rewarded with, for example, gift vouchers.

All these ideas, says Taylor, “are about making it easier for individuals, both from a financial and convenience perspective, to travel more sustainably”. Those three priorities of price, planet and people are also the guiding principles of modern managed business travel. Commuter travel is a category ripe for travel managers to take under their control.