Mobility Budget: Benefits for Employees and Companies

For a long time, having a company car was considered a status symbol and a prestige item. However, the needs of employees are changing, and the desire for flexible, personalized, and more sustainable mobility solutions is growing. Instead of the traditional company car, the focus is shifting towards the mobility budget. According to a survey conducted by mobility provider Free Now and market research institute Kantar, approximately every other Germanopen_in_new with access to a company car would be willing to forgo it if the employer offered alternatives like a mobility budget. In this article, we take a closer look at the concept and present the benefits for both employees and employers.

What is a mobility budget and how does it work?

A mobility budget is a modern and sustainable concept in the field of corporate mobility. Employees receive a specific budget from their employer, which they can utilize for various mobility services. They have the flexibility to choose the transportation modes that align with their current needs and cover their daily commuting and business trips. The amount allocated can be determined on a monthly or annual basis, depending on the company and individual agreements. For example, software company SAP is among the employers that have successfully implemented open_in_new
a mobility budget.

Typically, employees with a mobility budget can use the following modes of transportation:

Public transportation (local and long-distance)
Carsharing
Bike or scooter sharing
Rental cars
Taxis and Uber

The Benefits of a Mobility Budget in Fleet Management

The concept behind the mobility budget is to provide employees with greater flexibility and promote the use of environmentally friendly modes of transportation. This not only offers advantages to employees but also benefits companies through an appealing mobility offering.

Benefits for Employees

Flexibility: Different modes of transportation can be combined flexibly and chosen according to personal needs.
Time Savings: Instead of being stuck in traffic with a company car, transportation modes can be used efficiently to save time and reach the destination more quickly.
Health: Health-promoting mobility solutions like cycling can have a positive impact on health and well-being.
Environmental Protection: Climate conservation is important to many employees, and a mobility budget promotes sustainable transportation options such as electric scooters, trains, or buses.
Equality: While company cars are often reserved for specific groups or management levels within the company, a mobility budget can be extended to all employees equally.

Benefits for Companies

Employer Attractiveness: An innovative mobility concept enhances the employer brand and increases employee satisfaction.
Cost Reduction: Reducing the fleet size results in cost savings in procurement, maintenance, and administration.
Cost Control: A mobility budget provides transparent and predictable cost calculations.
Environmental Protection: Promoting eco-friendly modes of transportation contributes to environmental conservation and reinforces the image as a responsible employeropen_in_new
.

Mobility Budget Instead of Company Car?

Despite all the advantages, it is evident that the mobility budget does not function equally well in all regions. While numerous mobility alternatives are available in large cities and urban centers, the situation is quite different in rural areasopen_in_new
. Sharing models are often not widespread or even absent, and the public transportation network is not always adequately developed. Additionally, even in large cities, many fleets cannot completely do away with the traditional company car model, especially since field employees often rely on company vehicles.

Instead, the mobility budget serves as a complement to the company car and is part of the overall corporate mobility strategy tailored to the needs and requirements of employees. The goal is to offer employees attractive alternatives and provide them with maximum flexibility.

Defining Mobility Budget Utilization Through a Mobility Policy

Similar to a company car policy that governs the use of company vehicles, companies establish a Mobility Policy to define all the rules and conditions associated with employees using the mobility budget. A Mobility Policy provides detailed guidance on how the mobility budget can be utilized, which modes of transportation or mobility services are included, and the terms and conditions of use. A well-thought-out Mobility Policy helps maximize the benefits of the mobility budget while efficiently and sustainably managing corporate mobility. Moreover, it helps prevent misunderstandings and conflicts through clear guidelines. Such a guide should include the following points:

Budget Framework: The policy defines the allocated amount for each employee’s mobility budget. This may vary depending on the employee’s position or hierarchy within the company.
Accepted Modes of Transportation: Within the scope of a Mobility Policy, specify which modes of transportation or mobility services are permissible under the mobility budget. Employees may also have some flexibility in how they use the budget.
Expense Reimbursement: Clarify how the mobility budget will be reimbursed. For instance, as an employer, you may enter into a contract with a transportation provider and provide tickets to employees as a benefit. Alternatively, various providers offer mobility cards in the form of prepaid cards. Employees can also submit receipts for expenses incurred, such as train tickets or car-sharing rides. There is also the option to provide tax-free vouchers from mobility providers to employees.
Handling Unused Budget: Not all employees may fully utilize their budget. Therefore, the Mobility Policy should outline how remaining funds will be managed. Will they expire, carry over to the next month, or be paid out with the salary?
Scope of Use: Determine whether the mobility budget can be used exclusively for business trips, commuting to work, or also for personal purposes.
Penalties: The policy should also include clear rules and potential penalties for employees who violate the established guidelines.

Key Points on Mobility Budget at a Glance

With a mobility budget, companies provide their employees with a predetermined amount of money that they can use for the use of various modes of transportation.

As an innovative and sustainable mobility solution, a mobility budget has a positive impact on the company's image, employee satisfaction, and environmental conservation.

In a Mobility Policy, all rules and conditions for the use of the mobility budget should be defined.