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Workplace

Travel Planning

Your bottom line, one commute at a time

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Workplace Travel Planning

Your bottom line, one commute at a time

EXECUTIVE SUMMARY

The more your employees drive to work, the greater the hidden, long-term costs

that are passed on to your organization:

• Stressed out, sedentary employees increase health insurance claims and premiums

• Lateness and absenteeism due to health issues or traffic congestion

drag down productivity

• Corporate social responsibility claims can ring hollow

• Free parking is in reality a much larger expense than the organization accounts for,

since it induces people to drive to work when they might otherwise choose

healthier and more efficient options for commuting

Travel planning—policies that encourage and reward your people to leave their

cars at home—can save your organization substantial money and significantly

increase productivity. A travel plan employs such tactics as pre-tax transit

benefits, carpooling, leveraging the value of parking, and incentivizing active

transportation—biking and walking—into a strategy that fits your organization’s

specific needs.

WHY SHOULD WE CARE IF OUR PEOPLE DRIVE?

While it is a personal choice to drive, it is your organization’s business how

your people get to work because the more your employees drive, the more

you pay. In fact, the entire enterprise’s profitability is integrally connected

to employee travel habits—from healthcare costs to absenteeism, real estate

management to parking maintenance, not to mention a growing awareness of

corporate social responsibility.

You only need to look at the size of the subsidy of free parking to see how the

organizations that offer it affect the choices made by individual commuters.

Free parking is essentially a large cash benefit, often equaling more than

$1,000 per year—large enough that employees will accept the stress of

a difficult commute just to take advantage of it.

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HOW DO WE DEVELOP A TRAVEL PLAN?

A workplace travel plan is defined as a package of measures that an

employer puts in place to encourage and enable staff to travel to work more

sustainably and cost-effectively. Workplace travel plans may also address

other travel affecting the worksite, including business, visitor, customer

or patient travel, etc.

An organization looking to lower the amount of people driving to its physical

location must therefore enable and reward the following other modes of travel:

• Carpooling/vanpooling

• Public transit

• Bicycling and walking

• Telecommuting

• Flexible scheduling

Therefore, tactics may include:

• Progressively priced parking to encourage carpooling

• Parking space cash-outs (trading parking rights for cash value of the space)

• Pre-tax transit deductions and/or free, timely, and convenient shuttles to transit

• Convenient bike parking and/or changing facilities

• Flexible work schedules and telecommuting policies

• Tracking trips and rewarding miles not driven alone to work

Workplaces implement travel plans for many reasons: to have healthier

employees, to mitigate congestion, to make better use of their real estate, to be

leaders in sustainability or social responsibility, or even to lower attrition. All

of these reasons are borne of the desire to stay competitive and have a stronger

bottom line.

By making it convenient, practical, and even rewarding for employees to leave

their car at home, organizations can help employees save thousands of dollars

per year on automobile-related costs and experience a vastly improved work/

life balance, while the organization can save millions of dollars each year.

A glowing commuter-benefits program can be a boon for recruitment and

retention.

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HAVE A GOAL

All successful plans start with a goal, which reveals the strategy needed to

get there, and finally the tactics that need to be implemented. There are four

reasons why car-dependence increases enterprise costs:

1. Travel planning as workplace wellness

2. Reducing the impact of traffic congestion

3. Make parking work for you

4. Meaningful corporate social responsibility

This discussion explores the strategies and tactics necessary to achieve the goal

of mitigating each of these cost drivers and productivity drains. We will also

look at each of them from a cost-benefit analysis and the return on investment

of the strategy.

It is important to recognize that one strategy will have a positive impact on

the other strategies, as well. For this reason, travel planning can be seen as a

holistic productivity initiative; for example, a congestion mitigation plan that

uses active transportation tactics—such as cycling encouragement—will also

realize health and wellness benefits.

1) TRAVEL PLANNING AS WORKPLACE WELLNESS

A large amount of data make the compelling argument that driving less leads

to improved health. Healthier employees mean happier employees with lower

coverage premiums and more productivity.

The car-centric lifestyle has many negative health impacts, including

cardiovascular disease and stress. However, no single related ailment has

been as quantified and measured, nor has a greater financial impact on your

organization, as obesity and diabetes.

These chronic conditions—the direct result of a lack of exercise—are now

epidemic in the United States. Fully two-thirds of all Americans are considered

obese or overweight, and chronic sufferers are prime candidates for contracting

type 2 diabetes; the longer one is obese, the greater the likelihood of

becoming diabetic. One in three individuals born after the year 2000 will

contract type 2 diabetes—a sign that more Americans are becoming obese

at a younger age.

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The added healthcare dollars spent in treating this very preventable disease

are exorbitant:

• Each individual sufferer incurs an average of $6,600 in additional healthcare costs,

annually, or over $400,000 in a lifetime

• Approximately 1 in every 5 healthcare dollars is spent on the care of diabetes

• The total excess annual costs of diabetes are $174 billion, including $56 billion

in lost productivity

These two charts show the American obesity rate and the driving

rate by county:

(Source: www.planetizen.com)

This relationship was not formed overnight. The following graph tells a

compelling story by comparing the national driving rate against the national

obesity rate over the last 30 years:

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The less people drive, the healthier they are:

• Cities with the highest rates of biking, walking, and public transit use also have

the lowest rates of diabetes and obesity by as much as 20%.

• Public transit can leave users an average of 6.5 pounds lighter and over time are

81% less likely to become obese.

• Public transit users get an average of 19 minutes of walking per day, nearly two-thirds

the weekly amount of exercise recommended by the CDC.

• A sustained $1 increase in the national price of a gallon of gasoline equals a

10% dip in the nation’s obesity rate—or 9 million fewer obese people.

Preventative care—focusing on lifestyle changes rather than symptomatic

treatments or medication—is proven to have a positive impact:

• Workers who adjust their lifestyle to control diabetes rather than treat it

symptomatically reduce their lost workdays by 64%.

• Type 2 diabetes sufferers in one study were able to completely reverse their

symptoms and return to normal blood sugar levels without medication.

Encouraging active transportation

A health-and-wellness-based travel plan can include cycling, transit, and

walking-based tactics. While transit and walking go hand-in-hand and benefits,

such as pre-tax deductions for fares, are readily available in most areas,

organizations will need to get creative while thinking practically when it comes

to cycling encouragement.

Employers based in a dense, urban environment will find this strategy more

practical than suburban locations with higher traffic speeds and farther

distances between work and home. Those implementing a wellness-based travel

plan should anticipate the reasons people don’t ride their bicycle to work and

meet them head on:

• Parking: Bikeracks orasecure bikeroom can be provided

• Storage lockers and showers provide bike commuters a place to change following

a sweaty ride—many larger employers find that the corporate gym fills this role in

addition to serving all other employees

• Safety and awareness: Provide maps (free from many sources) with which to find safe

routes and communicate available resources safe cycling

• Create a bike-challenge program within the organization

• Implementing the IRS Bike Commuting Benefit

Since it’s clear that free parking amounts to an incentive for driving, cycling

needs a similar reward. Christopher Burke Engineering of Rosemont,

Ill., recently implemented a cycling incentive program that has earned it

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recognition by “Best Workplaces for Commuters.” In 2006, after deciding to

pay all employees $0.75 per mile biked, as well as adding indoor bike parking

and changing facilities, CBE has seen its bike commuter ranks increase

sevenfold and now over one-third of their employees bike to work in some

fashion, logging over 25,000 miles in 2011.

Another company, Quality Bike Parts of Minneapolis, has recently quantified

the healthcare benefits of their own cycling-based wellness program. Employees

who bike to work enjoy secure parking and shower facilities, are paid $3 each

day they ride, totalling about $45,000 annually. The program played a definite

role in reducing QBP’s healthcare spending by 4.4% between 2009 and 2011,

according their insurance provider, HealthPartners. While the savings couldn’t

be entirely attributed to the commuting program, HealthPartners’ study found

that those enrolled cost $200,000 less in healthcare claims over the three year

study vs. those who weren’t, and a positive impact to productivity of $900,000

was attributed to the bike-to-work program, too. Not including the capital costs

of the bike facilities, the program realized a return on investment of 8 to 1.

Short of commissioning a similar study in order to realize the returns of a

transportation-based wellness strategy, employers would need to measure

success by tracking the established metrics used by traditional corporate

wellness programs. A company that implemented a travel plan to lower

healthcare costs would need to track such things as activity times (bike

commutes, walking to transit), blood pressure, blood sugar, cholesterol,

and even including seemingly unrelated tactics such as smoking cessation

and follow-up counseling. These measurements provide quantifiable data

on whether the tactics implemented are providing the desired return on

investment.

Johnson & Johnson has saved $250 million from 2002 to 2008 in healthcare

costs by cutting employee smoking by two-thirds and the number of physically

inactive by half. Their enterprise-wide wellness strategy has paid dividends of

$2.71 for every $1 invested.

Absenteeism is greatly affected as well: MD Anderson Cancer Center of

Houston lowered lost work days by 80% in six years, saving over $1.5 million

(calculated by multiplying the number of sick days by average salary) through

its wellness program.

Finally, healthy employees stay with the company. Organizations with highly

effective wellness programs enjoy far lower attrition (9% vs. 15%): Business

software giant SAS has a voluntary turnover rate of just 4%. Biltmore tourism

of Asheville, N.C., lowered theirs to 9% from 19% in just four years.

Workplace travel planning—through enablement and rewards—provides a

bigger carrot to the stick of traditional wellness programs. A well-executed

strategy subtly encourages the combination of commute and exercise, saving

people valuable time by simply getting them out of their cars and moving more.

The actual return on investment of a wellness-based travel plan will take longer

to realize, but over time it will increase productivity as the incentives and

benefits attract and retain healthier and more sustainably-minded employees.

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2) REDUCING THE IMPACT OF TRAFFIC CONGESTION

Chicago employees endure one of the worst rush hour commutes in the

country: 71 hours and 36 gallons of fuel were wasted in traffic per capita in

2010, at a cost of over $1,500 for every driver, totaling over $8 billion. The 25%

of Chicago commuters riding the bus or train to work prevented an additional

$2 billion from being added to region’s total congestion costs, including

additional 23 hours wasted per capita.

According to the National Complete Streets Coalition “shifting even a small

portion of travelers out of single occupancy vehicles can have a big effect on

congestion.” When record high gas prices in 2008 caused national driving

rates to decline by 3.6%, traffic congestion plunged 30% in the nation’s 100 most

congested areas.

With modest increases in walking and biking—so integral to maximizing public

transportation’s effectiveness—Americans could avoid 69 billion miles driven.

More substantial increases in travel by walking and biking could avoid nearly

200 billion miles driven.

Within the dense urban core of Chicago’s Loop, employers minimally need

only to provide to their people a pre-tax transit benefit, which is readily

available; or a few bike racks to take advantage of the city’s growing world- class cycling network. However, much of Chicago’s suburban developments are

almost entirely car-dependent. The distances between work and home become

much harder to bridge with sparse and infrequent transit access and a lack of

safe cycling routes. Here, a more proactive approach is needed for employees

who might otherwise find driving easier.

Pace—the suburban bus and vanpool provider—provides crucial connections

for both Metra commuter-rail and rideshare users. Pace offers a free

ridematch service (www.pacerideshare.com) to connect carpoolers, gives away

gas subsidies and vehicle-use perks to carpool and vanpool drivers, plus bus

shuttles and feeder vans at a cost to employers.

At a minimum, organizations can easily offer the tax-free transit deduction and

distribute free marketing materials available from these service providers to

their employees. Or they can invest more by actively promoting and subsidizing

transit and ridesharing access. Employers could use tactics like providing

shuttles and feeder vans to trains, installing carpool-priority parking and

pricing incentives, or offering gas cards to car- and vanpool drivers.

Mercy General Hospital of Sacramento, Calif., boasts that nearly 25% of its

1,800 employees leave their car at home. They accomplish this by offering

substantial perks. Tactics include free transit, cash and lunch incentives (for

biking, carsharing, and vanpools), plus a guaranteed ride home benefit and

even a referral bonus. All told, a Mercy employee taking full advantage of the

system can bring in more than $1,000 in commuter benefits a month.

However, the return on investment to the hospital is even greater: $96,000

saved on parking costs annually is just the beginning. We’ll look at Mercy

Hospital again later on.

TELECOMMUTING can

provide an extremely high

return. Workers who drove

to work every day reported

work/life stress after an

average of 38 hours worked

per week. Conversely,

those that telecommute at

least three times per week

reported up to 57 hours

per week towards their

job before reporting work/

life stress. This is highly

correlated to the finding

that workers give back to

their employer an average

of 60% of the time saved by

telecommuting or working

from home.

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3) MAKE PARKING WORK FOR YOU

Each parking space provided by a private employer can cost as much as

$10,000 to $45,000 in capital to construct, with a monthly cost of $100 to $200

or even more in amortization and land value. It’s easy to see why free parking

is such a strong incentive to drive to work. The corporate office building sitting

amid a sea of cars is testament to this relationship.

Further, free parking amounts to an expensive benefit to your employees that

rewards behavior that is an even greater drag on productivity. Recognizing

your existing parking as the valuable asset it is can lead to the discovery of a

powerful tool in your workplace travel plan.

The following table (inspired by the Seattle Transit Department’s Managing

Employee Parking in a Changing Market, 1993) assumes a company that offers

free parking—at a cost of $100 per space, per month—to its 500 employees.

Conservatively, we can expect a breakdown of employee travel as follows:

Mode of Travel Parking Charge Share

Employees who drive alone $0 75%

Employees who carpool $0 20%

Transit, vanpool, bike, walk, other N/A 5%

This employer pays for 425 parking spaces at a cost of $42,500 monthly or

$510,000 annually.

By viewing the spaces as an asset and rewarding those who use them more

efficiently (carpoolers) or not at all (non-drivers), the employer can leverage the

land value of the parking to fund subsidized transit and cycling amenities for

its employees.

The following table reflects the employer charging the full value of each

parking space to drive-alone commuters while giving a discount to carpoolers.

The make-up of parking users shifts away from drive-alone to carpoolers:

Mode Parking Charge Share

Drive alone $100 50%

Carpool $50 42%

Transit, vanpool, bike, walk, other N/A 8%

Now the employer is getting a return of $363,000 annually and cutting onsite

parking usage by 16%.

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Consider that a contracted Pace shuttle-bus connection to the nearest Metra

station—hired for two hours in the morning and two hours in the afternoon—

would cost the organization around $75,000 per year. With an estimated load

of 60 passengers each, two round trips per hour eliminate demand for

240 parking spaces daily, saving a net of $213,000 per year. However, it’s not

likely that the transit-to-shuttle option would regularly run at capacity in

competition with free parking, especially if the riders themselves pay for their

seat on the shuttle.

By reallocating the parking funds into tactics that further reduce parking

demand, the organization can save even more money. The goal is now to grow

the “Transit, bike, walk, other” segment out of the “drive-alone segment.” The

shuttle would need to average just 30 passengers per trip—about half full, 60 car

trips per day—to operate at breakeven.

Mater Hospital of Dublin, Ireland—through car-sharing, transit benefits, and

cycling encouragement—realized a 16% reduction in on-site traffic in Year One

of a five-year plan with a 20% goal. This was a huge success for a company

dealing with a recent merger that resulted in a 60% loss in total parking spaces.

Vipre, Ltd—the transportation management firm that implemented the

plan—saved €125,000 in parking overhead costs and was recognized through

the Living Dublin 2007 award from the Irish Times in recognition of their

contribution to improving quality of life in Dublin City.

Elmhurst College in Wheaton, Ill., has given away over 400 bicycles to

students and faculty as part of its unique parking cash-out program since it was

implemented in 2008:

• Provides a free bicycle, helmet, and bike lock ($500 value) to students, faculty,

and staff who agree not to bring a motorized vehicle to campus for one year

• Re-up second year with a bike shop gift certificate

• Map of bike racks/facilities

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4) MEANINGFUL CORPORATE SOCIAL

RESPONSIBILITY (CSR)

Organizations have recently sharpened their focus on sustainability and CSR,

primarily in response to consumer and stakeholder expectations:

• Sixty-eight percent of Fortune 250 companies now publicly report on their social

and environmental initiatives as well as their financial performance.

• Over 90% of chief executives are doing more now than they did five years ago

to incorporate environmental, social, and governance issues into their companies’

strategies and operations.

• Among the leading global drivers of corporate sustainability is brand reputation.

Travel metrics an employer can track for a stronger CSR effort include

congestion and pollution reduction, energy and fuel savings, and adding to

demand for more cycling and walking.

Of these, reducing pollution is an easily understood and oft-communicated

goal for many businesses. Particulate pollution is blamed for as much as $50

to $80 billion in annual healthcare costs. Its effects are well documented:

decreased heart and lung function, worsening of existing heart and lung

conditions, plus increased risk of chronic bronchitis, emphysema, and some

forms of asthma, especially in children. Heavy smog days in urban areas lead

directly to increased hospital and ER visits and even death among those most

susceptible.

Carbon dioxide is the primary component of auto exhaust and is a major

greenhouse gas (GHG) that contributes to climate change. Chicago, in

partnership with other regional governments, is calling for significant

reductions in area GHG emissions: 25% by 2020 and 80% by 2050. Regional

leadership has a number of transportation-related goals in support, including:

• Improve air quality through reducing ground-level ozone precursor emissions

of pollutants from vehicles and other sources

• The city’s Bike 2015 Plan will add nearly 200 miles of bikeways and 11,000 racks

towards realizing a goal of 5% of all trips less than five miles are taken by bicycle

The strategies and tactics outlined in this discussion will help companies

contribute meaningfully towards achieving these aggressive benchmarks.

Recall the strong travel planning program of Mercy Hospital in Sacramento,

Calif., mentioned earlier. The program, which earned the hospital recognition

as one of America’s most bike-friendly companies, has prevented 35,000

automobile trips since being implemented in 2006, which equates to more than

250 tons of carbon dioxide.

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The Mercy Cycling Club has grown into a social responsibility program in

its own right. To date they have logged over 140,000 commuting miles and

were awarded stewardship of Mile 5 of the nearby American River Parkway,

volunteering 20 hours a week in clean up labor, and sponsoring events and

rides to raise awareness of bike commuting.

Next, recall CBE’s cycling program, and the 25,000 vehicle miles eliminated

in 2011—preventing nearly 10 tons of carbon dioxide from being emitted by car

trips that never happened.

And what of the 240 car trips eliminated each workday by the hypothetical

Pace shuttle bus round trip between an employer and a Metra station?

Assuming an average 15 mile commute for each drive-alone trip replaced,

multiplied by 254 workdays, this proposed public transit benefit prevents over

700 tons of carbon dioxide and several hundred pounds of nitrogen oxides and

particulate matter emitted annually.

Implement a travel plan to lower costs and increase productivity

Each of the four strategies outlined in this discussion will positively impact

your organization’s bottom line. While all are somewhat interdependent,

focusing on one will help you to identify the travel opportunities awaiting your

organization, and to choose the tactics needed to capitalize on them.

Identifying the most effective strategy first requires an analysis of the

productivity challenges your organization faces: high healthcare costs, crushing

traffic congestion, wasted value on free parking, or a poor brand reputation

from an equally poor social responsibility effort. Once this is established and

it’s clear that action is needed, a baseline survey of your people will identify the

opportunities for travel change and the tactics that will best achieve them.

For example, if a health-and-wellness driven travel plan is the revealed

strategy, your tactics must promote active travel to your people. But, if the work

destination is accessible only by high-speed roads or most of your people drive

longer distances, a cycling program is likely to fail. A better option would be

to encourage transit use (and more walking and biking to and from transit

stations) by providing pre-tax fare deductions and shuttle service between work

and the nearest stations, if direct service isn’t available.

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Join drivelesslivemore.com and

begin travel planning today

A joint partnership between the Regional Transportation Authority and

Active Transportation Alliance has launched a web-based tool for encouraging

healthier, greener commutes in Chicagoland: drivelesslivemore.com. Here are the

main features of the program:

• It’s free and easy to use.

• Users – youremployees – sign up and start tracking trips on afun, interactivecalendar.

• Each non-drive-alone trip (bike, transit, carpool, etc) is awarded a point in the system.

• These points can be used to enter monthly prize drawings.

• Companies can compete in team-based employer challenges.

Any organization can create a customized homepage within the website:

• Add your brand and messaging for employees.

• Measure the travel data of your participating employees.

• Add your own incentives and rewards – available only to your own employees

who qualify.

Active Transportation Alliance will assist in setting up your page and

analyzing your organization’s baseline data in order to help customize a

workplace travel planning strategy that fits your organizational needs. The

website will allow you to see your people’s travel data shift over time, allowing

success-measurement of your travel plan.

Don’t wait: your workplace can take advantage of this free and useful tool

right now. Go to drivelesslivemore.com and join today. The Active Transportation

Alliance will provide the tools you need create your workplace travel plan and

get your office moving again.

Stop driving, start commuting.

Build a travel plan today.

BRIAN MORRISSEY

Program Coordinator,

drivelesslivemore.com

Active Transportation

Alliance

312-427-3325 x243

brian@activetrans.org

Active Transportation Alliance

is Chicagoland’s voice for

better biking, walking and

transit. Active Trans’ goal

is to achieve a significant

shift from environmentally

harmful, sedentary travel to

clean, active travel by making

active transportation

convenient and fun.

.

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