How Much Companies Gain if Employees Commute by Bike

More and more companies take their social responsibility seriously, and even more so they are aware of the importance of the wellbeing of their employees – not only because it is their responsibility as employers but also because of the higher labour productivity of healthy employees, and therefore the company profits. One way to increase said productivity is to help employees be fit, for example by encouraging them to commute by bike to work. This can be done through various company policies and schemes, all of which are cheap and straightforward to organize. Still, companies hesitate to invest in cycling facilities or give a financial reward to cycling employees.

Together with the Dutch Embassy in Lima, Peru, Decisio developed a model that calculates the financial effects and other impacts of how employees commute to work. The model was based on extensive scientific research on the social effects of cycling and the economic value of such effects (bikenomics). In particular, the impacts on travel time, health and the so-called “externalities” (for example environmental impacts) were investigated.

The model was applied to several companies that were thinking of stimulating cycling in San Isidro, the business district of Lima. One of these organisations was the Pontificia Universidad Católica del Perú.

The example below shows the benefits to the employees, the University and the whole society if only 10% of the employees would decide to commute by bike instead of driving or using public transport.

It turns out that employees of the university save both money (because they do not burn gasoline, mainly) and travel time, as well as improve their health by cycling to work. The university itself saves quite some money on car parking and less sick leaves thanks to the increase fitness of employees. Finally, the whole society gains by a reduction of congestion and emissions of local pollutants and greenhouse gases.

We also advised the University a list with concrete measures to stimulate cycling, ranging from financial incentives (bike financing package, or a kilometre allowance), facilities the company can provide (the bike itself, if wished for with company logo, premium bike parking spots, changing/shower facilities etc.) to soft measures (like giving the good example by management, friendly competition/loyalty apps, safe routing advice, practicing safe cycling etc.).

Blog originally posted on the Dutch Cycling Embassy website.