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Mobility budget: an alternative to the company car

Mobility budget: an alternative to the company car

Every employee is as individual as the next and as such, have their own unique needs. One employee, let’s call him Thierry, lives in the city and commutes by public transport. Another, Nora, lives on the outskirts and drives into work and Ava cycles. Their employer is committed to providing a mobility solution that works for each of them, both during the daily commute and on business trips, which is where the mobility budget comes in.

A mobility budget is a set monthly allowance that employees can use to cover their travel costs, independent of the mode of transportation. This all-encompassing solution allows for flexible mobility options under one transparent budget. By combining the main forms of mobility, such as public transport, cycling, rental cars, taxi services and carsharing, employees can meet their mobility needs with their own budget and independently decide what system works best for them.

Switching from a vehicle management to a mobility management approach can result in more efficient mobility, not to mention more cost awareness for both employers and employees, as well as a stronger focus on the company’s ecological footprint.

Benefits for the employer and employee
It’s also an ideal option for employees who require multiple solutions for different days of the week. In good weather conditions, Ava likes to cycle to work, but she will opt for a car on longer business trips and prefers to use public transport for travelling within the city. It is appealing for employees to have the freedom to select the mode of transport that suits their immediate needs and more than ever, the sustainable element plays a vital role when deciding.

This represents a shift in the mentality of how to provide attractive benefits for employees. Company cars have traditionally played a very important role in securing talent for many companies. Nowadays, however, offering a mobility budget is a much more attractive benefit, both on a personal level and as part of a commitment to improving urban environment conditions. Employees who may not have a driver’s licence, or live in an area with no parking have the flexibility to choose options that fit better to their lifestyle. Furthermore, with congestion steadily increasing, sanctions on polluting emissions and the fact that many companies can’t offer sufficient parking, a mobility budget also provides an ideal alternative solution for companies.

The ready-made solution
Alphabet offers companies and employees optimum flexibility in mobility, in addition to comprehensible cost control with AlphaFlex, the mobility budget solution. The methods of transportation can vary from market to market, depending on the individual travel behaviour, and can be customised to best achieve specific company targets in terms of cost reduction and CO2 reduction. Furthermore, this solution provides a complete and current insight into the trips taken and the related expenses incurred.

For employers, the benefit is immediately apparent – all travel is documented under one invoice with no additional administrative burden, due to the smart, fully automated data exchange that can eventually be integrated directly into the company’s own payroll system. The insight over mobility costs allows for more control and increased employee awareness over associated mobility and CO2 emissions. For employees, the same is true. The flexibility in using the mobility of their choice, as well as tailored advice on their individual travel profile and subsequent costs savings results in greater employee satisfaction.

The road to flexible mobility
In Brussels, global management consultancy Korn Ferry, implemented AlphaFlex into their fleet in the summer of 2017. Brussels is notorious for its daily traffic jams, so alternative solutions are very much in demand. Employees can now choose to have their own mobility budget instead of a company car. For the classic company car driver, opting for shared mobility might seem like a big leap, but within the first year of implementation, three out of five company car owners made the switch to the mobility budget.

The mobility budget is already a reality in the Netherlands and Belgium. These two countries have a strong advantage – fewer transport companies mean that it is much easier and more efficient for successful co-operations to take place. Other countries, such as Germany, are still in the early adoption stages, but progress is underway.

Once the mobility budget policy gains ground worldwide, the expectation is that company car users will break their habits and opt for services like AlphaFlex instead of a classic car, marking an important step for the employees themselves, as well as for the company and the environment.

Expert
Twan van den Elsen
Product & Channel Development