Transportation, Distribution & Logistics

Employers, workers dip toes in vanpool concept: Commuter service pushes cost savings, tax breaks to lure first riders

June 13, 2005

Six months after launching a carpooling and bus-riding effort, Central Indiana Commuter Services is still trying to convince the city's car-cozy commuters to get aboard its vanpooling program.

The first CICS van has yet to roll people to and from work, even as 553 people have begun to carpool and 1,251 others wait to be matched with other carpoolers.

Instead, the vans have been motoring to office parks as part of a road show to win over employers and workers.

The metro area's unfamiliarity with vanpooling is making it a tough sell.

"This is a totally new concept to this region," said CICS Director Ruth Reiman. "Quite often, they think it's a shuttle, a little jitney thing that picks them up."

CICS has contracted to use a fleet of vans ranging from seven to 15 passengers, one of whom is responsible for driving. The vans are provided by Troy, Mich.-based vanpooling firm VPSI, which operates in about 30 cities, including Birmingham, Ala., and Cincinnati.

CICS was created last fall by Indianapolis Public Transportation Corp.- IndyGo-using $2.1 million in federal grants. The money is aimed at promoting bus service and car- and vanpooling to reduce traffic congestion and pollution.

Generally, vanpooling is for commuters who work regular, predictable hours. It's more economical the longer the trip-at least 15 miles-and with more people on board.

Unfortunately for CICS, the closest many Indianapolis residents have come to vanpooling is when they huddle awkwardly with strangers aboard an auto repair shop's shuttle van.

"There is a fear of riding with strangers that I haven't seen in other communities," said Reiman, who regularly vanpooled when she lived in Austin, Texas.

The CICS program will match riders who live in the same area and possibly even the same neighborhood. Also, unlike an auto shop's shuttle van, those in a vanpool get to know one another, easing the discomfort.

"There were van pools in St. Louis that had pizza parties," Reiman said. "They're buds for life."

The vanpooling program provides a degree of autonomy not found in public transportation. The members of a van group decide pick-up and drop-off locations. They set their own schedule. One member volunteers to drive and take care of the vehicle-receiving a discount in return. Riders pay a fee each month depending on the miles traveled and number of riders on board.

For new vanpools traveling 500 miles or less, the monthly fare is $29 per person on a 15-passenger van. It rises to $99 for a seven-passenger model, the smallest van in the fleet.

Fares can be offset by federal tax subsidies. One provision allows an employer who elects to subsidize a worker's transit pass or vanpooling to deduct up to $105 a month for each employee. The portion of the fare up to that amount is not counted as income for the employee. The employer doesn't pay FICA taxes on the benefit.

Another approach is deducting a vanpool fare from a worker's pay as a pretax benefit so employer and employee pay less in payroll-related taxes, according to CICS.

Large employers with experience in vanpooling in other cities may be first to sign up. CICS is in discussions with the federal Defense Finance and Accounting Service, at the former Fort Benjamin Harrison.

The center is likely to run out of parking spaces with a planned hiring increase, making vanpooling a more attractive alternative to laying asphalt.

DFAS already has about 80 employees taking IndyGo buses.

Reiman also sees potential interest from employers that are relocating or adding operations outside the city, especially outside of Marion County where IndyGo buses don't operate.

Clearly, there is interest among commuters in alternatives to driving personal vehicles. Gas prices remain high. Downtown parking can be expensive. Nearly 1,600 commuters have registered with CICS-though most are interested in carpooling.

"There definitely is an interest here in our office," said Laura Miller, personnel administrator at Indianapolis law firm Barnes & Thornburg, where CICS recently made a presentation. Miller said her employees thought carpooling might be the most convenient option.

Reiman remains as zealous as an evangelist about the van program. She expects to have at least five vans running by year-end.

"It's just about converting people," she said.


Andrew McGee of the Central Indiana Commuter Service explains vanpooling to Patie Ecksstein, center, and Kathy Hedges, of the Indiana Department of Revenue Processing Center.
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