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The impact of employer-provided car coverage policies on urban spatial structure and commuting behavior

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  • Güven, Gökhan

Abstract

Employer-provided cars have become a standard mode of transportation worldwide, particularly for commuting. In most cases, company cars are considered fringe benefits, with a full package covering all internal travel costs (fuel, tolls, parking, etc.) paid by the employer. However, employers increasingly exclude these nonessential costs and offer only limited coverage packages to employees as a cost-cutting measure. This study analyzes the effects of different coverage policies on urban spatial structure, travel behavior, and residential location preferences under two different congestion management technologies (standard and bottleneck) and labor market structures (locally efficient and inefficient). Limited coverage with standard congestion tolling results in clustered economic activities and populations for both labor market structures. However, limited coverage with bottleneck congestion tolling can cause urban sprawl and more dispersed home locations, mainly due to constant trip costs, given that employers redistribute the surplus in the mobility budget (income effect). This study highlights the policy implications of urban fringe growth and downtown decline.

Suggested Citation

  • Güven, Gökhan, 2025. "The impact of employer-provided car coverage policies on urban spatial structure and commuting behavior," Research in Transportation Economics, Elsevier, vol. 114(C).
    • Handle: RePEc:eee:retrec:v:114:y:2025:i:c:s0739885925001428
    DOI: 10.1016/j.retrec.2025.101659
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    Keywords

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    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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