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Is the Company Car on the Way Out?

February 17, 2021
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10 min read
Mobility Budget, Mobility
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Koen

Is the Company Car on the Way Out?

For years, many workers have relied on the company car. But times are changing and more sustainable alternatives are gaining traction.

Is the Company Car on the Way Out?

Statistics show that company cars remain in heavy use in Europe. However, a 2020 report by the Brussels-based Transport & Environment explains how these vehicles contribute to pollution and climate change. 

The report goes on to explain that vehicle taxation is the main reason behind the company car market. It suggests the EU could reform “benefit in kind” taxations, VAT, and depreciation write-offs to encourage workers and corporate fleets to switch to electric-powered vehicles.

As the stats show, the company car isn’t on its way out quite yet. However, the work commute is showing signs of evolving. Let’s explore how.

How the commute is evolving

For a long time now, employees have thought of their company cars as a perk, and employers often use them as an incentive. Nevertheless, business owners and commuters alike are realizing the need for a different approach. 

With this realization, we’re seeing three distinct trends in commuting:

Telecommuting/remote working

Telecommuting is becoming more popular as commuters tire of the daily traffic jams or the long train journeys to work. Research from the European Commission shows the numbers of those working from home have increased steadily over the years—yes, even pre-pandemic—and there’s no sign of this trend abating.

The research also indicates the number of employees who work from home occasionally has seen an increase. According to the stats, more women stay at home than men, and remote working is common among older workers.

The super-commuters

Another trend we’re noticing is the so-called super-commuters.  According to research, an increasing number of workers live in one European country and commute to another. These commuters will often catch a flight or a Eurostar train to get to their destination.

Although this approach may seem time-consuming and exhausting to some, super-commuters cite quality of life, family life, and affordable housing as some of the many reasons they choose to travel this way.

Cycling

A further upward swing among commuters is cycling. It’s becoming increasingly popular in a number of countries, and a quarter of Europeans say they’d commute on an e-bike.

There have been several European initiatives to get workers out of the company car and onto bicycles. For instance, governments in France are investing in cycling infrastructure. Italy is subsidising bicycle purchases, and Germany is seeking federal support. These efforts should further encourage bicycle use.

Reducing commuting and dependence on the company car

As research demonstrates, one of the biggest issues in reducing commuting is changing workers’ behaviour. For example, while employees say they’d use a carpool, only a few of them sign up to take part, even when offered incentives.

Reasons are numerous but employees mainly had difficulties stepping away from commuting because of:

  • Subsidies and parking spots
  • The organizational aspect that comes with carpooling, even though it’s beneficial

Changing habitual behaviour is more than tricky but not impossible. In order to get workers to change to a non-car solution, we have to lead them to a smooth transition into sustainable modes of mobility.

The answer might not be as difficult as suggested. Skipr aspires to offer employees more options and the imminent freedom of choice to go for whatever solution is handy at the time.

The mobility budget: A flexible choice for commuters

If we’re encouraging more commuters to switch away from the company car, initiatives need greater flexibility. That’s now possible with the mobility budget.

Rather than giving commuters one choice, the mobility budget offers employees greater flexibility, meaning they don’t need to change their existing habits, per se. For example, if a worker has a company car, they can use the budget to switch to an electric vehicle.

Workers can also use budgets for:

  • Getting a transport pass
  • Contributing to housing costs - more info on our blog:
  • Covering the costs of greener forms of transport (ebike and electric steps)
  • Paying for shared bike subscriptions

This way, the budget considers personal preferences and lifestyle, giving employees an advantage over earlier the Cash for Cars scheme.

The mobility budget and the future of the company car

It’s still early days for the mobility budget, so it’s difficult to say how well it will catch on. However, early signs are good—it’s gaining popularity in Belgium. 

As more employers and workers realise the benefits of this approach, it’s likely that the concept will gain more momentum and catch on worldwide.

Also feel like a new time has come for corporate mobility? Want to be a part of it?

Do your free mobility assessment online or check our website for more info

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