TRN_2008_CIS_Rev4

Executive SummaryRising fuel prices and continued concern about global warming arecreating unprecedented challenges for Americans and their employers.To better understand current perceptions, attitudes, actions andintended actions prompted by these challenges,TransitCenter, Inc.,conducted the third annual Commuter Impact Survey.

First undertaken in 2006, the Commuter Impact Survey is made widelyavailable to employers, human resource professionals, policy makers,transportation organizations and the media.The Survey is intended toprovide insights regarding the financial, economic and related impactscommuting has on America’s workforce and employers, as well asstrategies being utilized to address these impacts.

Survey Expanded in 2008Given the mounting pressure of commuting costs for employees andcompanies, the objectives, scope and response base for the 2008Commuter Impact Survey were expanded compared to previous years.

2008 Survey Expansion Objectives:

• Increase statistical confidence of the Survey results.There were 1,283 respondents compared to 300 from 2007.

• Maximize the reach of the Survey to three key markets:New York City, Chicago and San Francisco. These markets werechosen given their high concentration of commuters and theavailability of mass transit. These cities are referred to in thedetailed Survey findings as “Target Cities.”

Higher commuting costs andclimate change raise challengesfor employers.

| 1 |

The 2008 Commuter Impact Survey

Executive Summary ......................1

Detailed Findings ..........................6

Composition of Sample ............19

About TransitCenter® ............... 21


| 2 |

The 2008 Survey includes many of the same questions as the two previous Surveys,additional questions were included to illuminate recent events — higher gas andcommuting costs, measures proposed for tax credits and legislative initiatives toincrease greater use of commuter benefits.

While the 2006 and 2007 Surveys were administered solely at the annual Society forHuman Resource Management (SHRM) Conference, the 2008 Survey was extendedbeyond SHRM via a national online survey to attain a wider sample.

MethodologyIn June 2008, an online quantitative Survey was fielded by an independent marketresearch organization, Resource Systems Group, Inc. (RSG), with 1,283 individualsresponding.The Survey was fielded among three audiences: 1) human resourceprofessionals attending the 2008 SHRM conference; 2) human resource decision makers contacted using third-party mailing lists; 3) current customers of TransitChek,®

the tax-free commuter benefit program provided by TransitCenter. At the 95%confidence level, the margin of error is +/–2.7%.

Composition of the SampleForty percent of respondents are senior-level executives with titles such as President/CEO/Chairman/Owner/Partner or Principal. Nearly 30% of respondents hold an executive-level Human Resource title.

Nearly two-thirds of respondents (65%) work for companies that employ fewer than100 people. Nineteen percent of respondents’ companies employ between 100 and999 people and 16% employ between 1,000 and 24,999 employees. An additional 4% of respondents work for companies that employ 25,000 or more.

Of note, the three target cities (New York City, Chicago and San Francisco) representedin the sample account for nearly 50% of all transit1 use nationally.

1 Commuting in America,Transportation Research Board, 2006 and US Census


| 3 |

Key Findings

Amid economic and environmental uncertainty, companies acknowledgethe need to act.Findings from the 2006 and 2007 Commuter Impact Surveys revealed strongconcerns among employers regarding the increasing costs of commuting, as wellas the threat of climate change.While the 2008 Survey reinforces these findings,it also suggests that companies today are faced with a number of challenges.

Nearly 90% of respondents state that their companies are very or somewhatconcerned about the impact of fuel and commuting costs on employees.A significant majority of respondents (67%) believe that companies should take an active role easing the difficulties of employees’ commutes.

Respondents balance these sentiments with an acknowledgement of their owneconomic realities. Sixty-two percent of respondents are concerned about havingto raise salaries in order to make up for higher commuting costs. Fifty-ninepercent report not being able to help employees cope with higher fuel andcommuting costs. More than 40% report concerns about recruiting and retainingemployees because of high commuting costs.

Concerns about climate change compound employers’ commuting cost concerns.As was evident in findings from the 2006 and 2007 Commuter Impact Surveys,companies are extremely concerned about climate change. Nearly 90% ofrespondents to the 2008 Survey are either somewhat or very concerned aboutglobal warming and the environment. Just as respondents believe their companiesshould take the lead in helping employees find solutions to high commuting costs,most respondents (70%) also think that companies should step up with viablesolutions that encourage employees to seek more environmentally friendlyalternatives to drive-alone commuting.

Companies use multiple strategies to address concerns.Companies are utilizing (or plan to implement) programs to help employees withrising commuting costs and environmental concerns.Among commuter benefitservices, Flextime (59%),Telecommuting (47%) and Tax-Free Commuter Benefits(37%) lead the way. In addition, purchasing eco-friendly products/services (67%),partnering with/supporting “green” organizations (47%), and running energyconservation programs (44%) also lead the list.


Nearly 90% ofrespondents statethat their companiesare very or somewhatconcerned about theimpact of fuel andcommuting costs on employees.

of respondentsbelieve companiesshould encouragealternatives to driving.

70%


| 4 |

Commuter benefits play a prominent role.As seen in prior Survey findings, commuter benefits have become a core part ofmany companies’ strategies to help employees cope with commuting costs andalleviate the environmental effects of commuting. In fact, 40% of respondents’companies currently offer some form of commuter benefit. (“Commuter benefit”is defined as subsidized carpool/vanpool, flextime, subsidized or pretax transit/parkingprogram or telecommuting.) Twenty-four percent currently offer a tax-freecommuter benefit program either as a salary deduction or tax-free employer subsidy.

Tax-free commuter benefits are perceived to offer multiple advantages. Forcompanies that currently offer or plan to offer tax-free commuter benefits,cost savings for employees, enhancing their overall benefits offering andattracting/retaining employees are the top three advantages cited. In addition,69% of respondents from these companies state that it helps reduce theircorporate carbon footprints.

Employers’ adoption affects the participation rate among employees.Even as more companies offer tax-free commuter benefits, uptake by employeesdepends on how the benefit is offered. Over one-third of companies offeringcommuter benefits have an employee participation rate of 25% or lower, while40% of companies have a participant rate of 51% or higher.To this point, themanner by which an employer offers the benefit — as a pretax benefit (salarydeduction), a tax-free subsidy, or fringe benefit — appears to be a significantdriver of adoption. Specifically, employees who are offered the benefit as asubsidy or fringe benefit are considerably more likely to participate (37% ofcompanies offering the benefit as a subsidy or fringe reach 75% or moreparticipation rate compared to 15% of companies offering it as pretax).

Employers’ interest in adopting tax-free commuter benefits is affected by several factors.A number of key economic factors are seen to drive employer adoption of tax-free commuter benefits, as well as to increase anticipated employeeparticipation. For companies that don’t offer tax-free commuter benefits, themost likely factors to spur the adoption are tax credits that offset the cost ofproviding the benefit, and increasing the monthly amount of tax-free dollars(from $115/month to $200/month) employees can use for transit. For companiesthat do offer tax-free commuter benefits, more than 70% of respondents cite anincrease in the employee pretax cap, the continued steep rise in commuting/fuelcosts, and the ability for employees to share all or part of the benefit with familyor others as the most likely causes for growth in employee adoption of tax-freecommuter benefits.

A significant majorityof respondents (67%)believe that companiesshould take an activerole in easing thedifficulties ofemployees’ commutes.

| 5 |

ImplicationsThe 2008 Commuter Impact Survey provides a number of key insights and implications.

The Survey indicates that employers are profoundly concerned about the impactthat high fuel and commuting costs are having on their employees. Importantly,most employers see a need to help find viable solutions to soften this impact.Yet, while employers see raising salaries as a means of providing relief, they also cite concerns that they may not have the resources to do so in today’seconomic climate.

Survey findings also show that commuter benefit programs, including flextime,telecommuting and tax-free commuter benefits, continue to be a viable solutionfor employers to help employees cope with high commuting expenses. Inparticular offering a tax-free commuter benefits program is viewed as havingthree key impacts: a highly relevant and cost-effective enhancement to acompany’s overall benefits package; an effective way to attract and retainemployees; and an easy solution to help reduce a company’s carbon footprint.

Factors that may prompt more companies to offer commuter benefits — andmore employees to use them — include tax credits and increases to the IRS cap on monthly pretax salary deductions for commuter benefits.


Detailed FindingsRespondent ClassificationNew York City, Chicago and San Francisco were targeted cities for this survey.

Mass Transit in Targeted CitiesOf the 5.8 million transit riders in the country, over 2 million are in New York City and underone-half million are in both Chicago and San Francisco.*

| 6 |

34%New York Cityonly

28%Chicago only

26%San Francisco only

9%Multipletarget cities

3%No target city

36%New York City

7%Chicago

5%San Francisco

Question: Which of the following metropolitan areas do you have offices in?

*Number of transit commuters: NYC 2,065,120; Chicago 420,975; San Francisco 273,430(Source: Commuting in America,Transportation Research Board, 2006 and US Census)

Chart 1

Chart 2


| 7 |


Employees Rising Commuting Costs and Global Warming Are ofConsiderable Concern for EmployersCompanies in all target cities evidence significant concerns about the impact offuel/commuting costs on employees and about the environment and global warming.

44% 43% 11% 3%

Very concerned Somewhat concerned

Not at all concerned Don’t know

Fuel/CommutingCosts Concern

Question: How concerned is your company about the impact of fuel and commutingcosts on your employees?

42% 46% 9% 3%

Very concerned Somewhat concerned

Not at all concerned Don’t know

Global WarmingConcern

Question: How concerned is your company about the environment and global warming?

Chart 3

Chart 4

Companies Agree on Need to LeadA sizable majority of respondents agree that their companies should play a lead role in helping toease employees’ commuting burdens and in addressing environmental concerns.


| 8 |

Strongly/somewhat agree Neutral Strongly/somewhat disagree

70%

22%Companies should encourage

alternatives to employees drivingthrough various incentives

8%

67%

23%Companies should take the leadin helping to ease the difficulties

of their employees’ commutes10%

62%

27%It is important that the

environmental values ofemployers match those

of their employees 11%

51%

29%Companies should take

the lead in helping employeespay for commuting costs

20%

Question: How much do you agree or disagree with each of the following statements?

Chart 5

| 9 |


Companies’ Key Concerns Regarding Rising Commuting CostsOver 60% of respondents are concerned that they will have to increase employees’ salaries tomake up for increased commuting costs, while 59% are concerned that they are not able to helptheir employees.

Ranked #1 Ranked #2 Ranked #3

29% 16% 17% = 62%

27% 16% 16% = 59%

12% 20% 14% = 46%

11% 16% 19% = 46%

10% 16% 17% = 43%

9% 16% 17% = 42%

We will have to increase employee salaries to makeup for the increased cost of commuting to work

We are not able to help employees with theadditional commuting expenses

We will have to add incentives that encourageemployees to use alternatives to driving to work

We will have greater difficulty retaining employees

We will have greater difficulty recruiting employees

We will have to add programs that help employeesfind alternatives to driving to work

Question: Please rank your top three concerns with respect to the effect of continued high gasprocess on your workforce.

Chart 6


| 10 |

Primary Strategies to Address Rising Commuting Costs and ConcernsAbout the EnvironmentFlextime and eco-friendly purchasing policies lead list of approaches/strategies cited by respondents.Telecommuting programs, developing “green” production/services, supporting/partnering with“green” organizations, and offering tax-free commuter benefits also scored relatively highly.

Currently Plan to Used to do this, Never do this do this but no longer did this

We offer flextime 51% 8% 2% 39%

We purchase products/services 51% 16% 1% 32%that are eco-friendly

We offer a telecommuting program 37% 10% 2% 51%

We focus on developing products/services 32% 12% 1% 55%that are not harmful to the environment

We support or partner with 31% 16% 1% 51%“green” organizations

We run an energy conservation program 30% 14% 1% 54%

We offer tax-free commuter benefits to 27% 10% 2% 61%encourage use of mass transit

We target green initiatives for our 25% 15% 1% 59%customers

We provide employee education on how 22% 15% 1% 62%to use less energy

We offer facilitated ridesharing 10% 8% 2% 80%or vanpooling

We have preferential parking for carpools 10% 6% 2% 82%or vanpools

We provide carbon offsets for 6% 8% 1% 85%business travel

We provide incentives for employees to 7% 8% 1% 84%commute by bicycles

Question: For each of the following benefits/services, what is your company’s position?

Chart 7

| 11 |


Commuter Benefits:A Strategy of Choice

Types of Employee Benefits Offered40% of companies offer some type of commuter benefit:

• Subsidized carpool/vanpool

• Flextime

• Subsidized or pretax transit/parking program

• Telecommuting

Health

86%

Retirement

67%

Disability

52%

Commuter

40%

Lifestyle*

29%

* For this question, gym membership and sabbaticals were provided as examples of “lifestyle benefit”

Question: What kinds of benefits does your company offer?

Chart 8


| 12 |

Awareness of Tax-Free Commuter BenefitsOver half (53%) of respondents are aware of tax-free commuter benefits for employees to use for their commuting expenses.

• Respondents with offices in multiple targeted cities or with offices only in New York City are significantly more likely to have heard of these benefits

• Chicago-only and San Francisco-only based companies, as well as smaller companies in general, are less likely to be aware of commuter benefits

71%Multiple target cities

68%New York City-only

42%San Francisco-only

41%Chicago-only

35%No target city

Awareness by Targeted Cities

Fewer than 100

Awareness by Company Size

100 – 999

46%

62%

69%1,000 or more

Question: Are you aware of tax-free commuter benefits for employees to use forcommuting expenses?

Chart 9

Chart 10

| 13 |


Awareness of Tax-Free Commuter Benefits (continued)

46% 37% 14% 3

Currently offer Have never offered Plan to add Used to offer

Overall

Offering/Adding Tax-free Commuter Benefits(of those aware)

24%

20%

8%

2%

Yes - currently offer

No - do not offer

Yes - plan to add

No -used to offer,but no longer

OfferingTax-free Commuter Benefits(of Total Sample)

Question: Do you currently offer or plan to add a tax-free commuter benefits program?

Question: Do you currently offer or plan to add a tax-free commuter benefits program?

Chart 11

Chart 12


| 14 |

Top 3 Reasons Offer/Plan to Offer Tax-Free Commuter BenefitsOverall, “cost savings for employees” was ranked in respondents’ Top 3 reasons for offering or planning to offer the benefit about 70% of the time.

Ranked #1 Ranked #2 Ranked #3

34% 21% 16% = 71%

20% 17% 22% = 59%

14% 15% 16% = 45%

6% 13% 13% = 32%

12% 11% 8% = 31%

9% 10% 8% = 27%

Cost-savings for employee

Enhance the overall benefits offering

Attract and retain employees

Employees are asking for it

Cost-savings for employer

3 5 12 = 20%

= 8%

Low administrative cost for employer

1 4 3Company concernover traffic congestion

= 7%2 3 2Employee concernover traffic congestion

Good for the environment

Question: (If you currently offer or plan to add a tax-free commuter benefits program)Please rank the top three reasons you plan to offer or plan to add a tax-free commuterbenefits program?

Chart 13

| 15 |


Tax Credit Most Likely to Drive Adoption of Tax-Free Commuter BenefitsRespondents who do not currently offer tax-free commuter benefits would be more likely to doso if a tax credit was offered.

43% 35% 22%

30%

28% 49% 23%

25%

23% 55% 22%

24%54%22%

51% 24%

44% 26%

Very/somewhat likely Very/somewhat unlikely Unsure

A tax credit that wouldhelp cover the cost

of providing the benefits

Likelihood of the Company Offering the Benefit If...

The individual monthly amountallowed by the IRS increased from

$115/month to $200/month

The cost of gas increased by 20%

The cost of commuting increased by 20%

The benefit also includeda financial incentive

to commute by bicycle

Employees could shareall or part of their benefit

with family or others

Question: (If you do not currently offer or plan to add a tax-free commuter benefits program) Would you be more likely to offer tax-free commuter benefits under the following conditions?

Chart 14


| 16 |

Employee Participation MixedForty percent of companies that offer tax-free commuter benefits cite 51% or higher employeeparticipation, while over one-third have an employee participation rate of only 25% or less.

• Companies that offer it as a tax-free subsidy have the highest participation rates

% of companies with > 75% participation rate

Pretax Benefit paid by employee (n=269) 15%

Tax-free Subsidy or fringe paid by employer (n=54) 37%

Combination of subsidy and pretax benefit (n=89) 19%

Question: (If you currently offer or plan to add a tax-free commuter benefits program) Whatproportion of your employees use the benefit? If you plan to add the benefit, please give yourbest estimate of how many employees will use it.

Chart 15

| 17 |


Conditions Seen as Likely to Increase Employee Participation Respondents state they believe employee participation would increase based on these conditions:

76% 18% 6%

75%

73% 19% 8%

72%

38% 49% 13%

20% 8%

19% 7%

Very/somewhat likely Very/somewhat unlikely Unsure

The cost of commutingincreased by 20%

Likelihood of the More Employees Using the Benefit If...

The individual monthly amountallowed by the IRS increased from

$115/month to $200/month

Employees could share all or part oftheir benefit with family or others

The cost of gas increased by 20%

The benefit also included a financialincentive to commute by bicycle

Question: (If you currently offer or plan to add a tax-free commuter benefits program) Howlikely is it that more of your employees would use the benefit under the following conditions?

Chart 16


| 18 |

Composition of Sample

26%

28%Chicago only

Respondents by Market

34%New York City only

San Francisco only

3%No target city

9%Multiple target cities

Question: Which of the following metropolitan areas do you have offices in?

40%

15%

13%

12%

5%

5%

4%

3%

2%

President/CEO/Chairman/Owner/Partner/Principal

Titles/Function

Manager Human Resources/Personnel/HR Generalist or other Manager

Director/Human Resources/Personnel or other Director

Vice President/Human Resources/Personnel or other Vice President

Other

Supervisor

Assistant or Associate Director

Administrator

Specialist

Question: What is your title?

Chart 17

Chart 18

| 19 |


Company Size % Represented

Fewer than 100 65%

100 – 999 20%

1,000 – 24,999 11%

25,000+ 4%

Company/Organization Size

Question: How many individuals are employed by your company?

51%

29%

6%

5%

3%

2%

4%

1

Number of Locations

2-5

6-10

11-20

21-50

51-100

More than 100

Question: How many different US locations does your company have?

Chart 19

Chart 20


| 20 |

25%

15%

9%

11%

10%

13%

17%

None

Companies with Employees Who Use Mass Transit, Carpools or Vanpools

1-5%

6-10%

11-25%

26-50%

51-75%

76-100%

Question: What proportion of your employees commute to work using mass transit, carpool,or vanpool?

Chart 21

Over 20 years ago,TransitCenter was created to develop innovative ways to encourage greateruse of mass transit in order to reduce trafficcongestion and improve air quality.Today,TransitCenter continues to be focused on theseobjectives, along with helping employers andemployees cope with rising gas and commutingcosts by providing transit incentives, informationand assistance.TransitCenter also works closelywith businesses, transit operators, commutergroups, regional development agencies andgovernment agencies to improve their understandingof the importance of transit in making communitiesbetter places to work and live.

As part of this mission, in 1987 TransitCenterlaunched TransitChek,® the first commuter benefitsprogram in the nation, which has made commuting a more affordable option for commuters acrossthe country.

About TransitCenter, Inc.TransitChek was created to encourage more people to use mass transit in order toreduce traffic congestion and protect theenvironment.Through TransitChek, employersallow their employees to pay for all or part oftheir commute tax-free.TransitChek programshave helped hundreds of thousands ofemployees save more than $110 million in taxes, while employers have saved over $35 million in payroll taxes.Today, more than11,000 employers with over 500,000 employeesparticipate in the program as a convenient,money-saving way to pay for their commute and other transit travel.

About TransitChek®

| 21 |

1065 Avenue of the Americas, 16th FloorNew York, NY 10018

1.888.343.CHEK (2435)

www.transitcenter.com

Copyright ©2008 TransitCenter, Inc. All rights reserved.

Documents

TRN_2008_CIS_Rev4