Point of View

Mobility Budgets – A Sustainable Version of the Company Car?

A Mobility Budget refers to a sum given to employees by their employer, which employees can spend on commuting to work and on private travel. There are multiple active providers, whose platforms allow employers to adopt their brand logo onto the platforms and, most importantly, display multiple forms of transport in their offering.

As already mentioned, there are three factors that have been the driving forces behind mobility budget adaption:

  • Public Discourse
  • Legislation/Regulatory Pressure
  • Convenience

On that note, we can almost certainly state that mobility budgets can be environmentally sustainable, as compared to stand-alone conventional car ownership. Hence, they should become an interesting topic for fleet managers, as providing up-to-date solutions for their employees and, subsequently, for their companies, is of great importance in today’s society.

Let’s dive deeper into the above-mentioned driving forces: Public Discourse is at the top of the list, mostly due to environmental concerns in urban areas. 94% of EU citizens are aware of how important protecting the environment is. In spite of the fact that battery electric vehicles have emerged as a solution, they fail to solve a major problem: congestion.  Thus, there is still room for improvement, and a recourse would be resorting to mobility budgets.

The second driver, Legislation, ensures the divergence of jurisdictional commitment from private car ownership to more environmentally sustainable modes of transportation. In an effort to do so, the EU has started prescribing countries to reduce emissions by 30%, from sectors not covered by mission trades, until 2030. There are further mechanisms that aim at curbing private internal combustion engine car use, such as  The European Green Deal, or the EU Clean Vehicles Directive.

Convenience, the third and last driver, is based on the fact that in urban areas, conventional car ownership is not as appealing as it used to be. This has happened due to a number of reasons, such as: parking spots regulation has become stricter, there is little to no flexibility and, last but not least, commuting seems to be associated with stress. Adopting mobility budgets, nonetheless, would ensure convenience.

Having said all of the above, we have to assess what mobility budgets mean to employers – first and foremost, they bring tax optimization along, as well as the possibility of bettering the firm-wide environmental footprint. Secondly, the company’s car fleet would be reduced, along with the adoption of a mobility budget, meaning more environmentally sustainable modes of transportation could be freely chosen as alternatives.

Truth be told, there is still resistance to mobility budget adoption, especially in rural, less densely populated areas. Why is that? Well, rural and suburban areas lack alternate modes of transportation due to a number of reasons: locals do not live within walking distance from bus stops, transport schedules are irregular or there is sparse bus provision. In this scenario, mobility offerings should be expanded, hence leading to a spur in mobility budget adoption.

Still, given all into account, the adoption of mobility budgets seems to be the correct option for both employers and employees, as the advantages outweigh the disadvantages.

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