Lyft Expands Tax-Saving Commuter Benefit to More U.S. Cities

Employers offering commuter benefits to their employees have another option other than traditional commuter transportation like biking, buses and trains.

Ride-hailing service Lyft is expanding its pretax commuter benefits to Lyft Line users in 13 new cities and across much of New Jersey.

Lyft commuter transportation

The benefit lets employees to use pre-tax commuter benefit dollars to pay for all Lyft Line rides once they add their commuter benefits card to their Lyft account, allowing them to save 35 percent on rides. “This provides employers with a competitive advantage, by offering an affordable and efficient transit option for their employees,” said Amit Patel, director of business development at Lyft Business, in an email interview.

Lyft Line, Patel explained, is what passengers use to share a ride with other people going in the same direction. It “helps to reduce the number of vehicles on the road, ultimately reducing pollution and freeing up more space on the streets,” he said.

Lyft ride-hailing service

Amit Patel, director of business development at Lyft Business.

The transit benefit, announced Feb. 5, was extended to Atlanta; Austin, Texas; Chicago; Denver; Las Vegas; Los Angeles; Nashville; New Jersey; Philadelphia; Portland, Oregon; San Diego; San Francisco; San Jose/Silicon Valley; and Washington, D.C. The benefit previously was available in Boston, Miami, New York and Seattle.

Employers can contact their benefits providers for next steps, said Patel. The providers partnering with Lyft are WageWorks, Benefit Resource, Commuter Benefits Solutions, Navia, Zenefits and Ameriflex, according to a Lyft blog.

Ridesharing companies partnering with benefits providers to offer transit benefits isn’t new. Lyft Line began offering the benefit to its initial four cities in 2017, and ride-hailing company Uber partnered with WageWorks, a provider of consumer-directed benefits, in December 2016 to offer a pretax transit benefit. It’s one of many ways people may commute now along with traditional modes of transportation like driving, biking and public transportation.

Even though the recently passed tax reform bill has eliminated the tax deduction that businesses get for providing employees transit benefits, Patel believes that won’t affect an employer’s willingness to offer these benefits significantly.

“Many organizations see commuter benefits as a competitive advantage to attract top talent and will continue to offer commuter benefits,” he said.

Some analysts agree, although they acknowledge that some organizations might deem transit benefits as expendable.

“We anticipate there may be some impact as employers analyze how many employees use the benefit,” said Lydia Jilek, a senior consultant on voluntary benefits for Willis Towers Watson. “That said, we doubt the change will be immediate.”

Many employers “are dealing with much bigger line items in their budgets than” transportation benefits, she added, and they would likely find them worth keeping if many employees use them.

Andie Burjek is a Workforce associate editor. Comment below or email editors@workforce.com.