The Netherlands Pays People To Bike To Work

It's one of a handful of places around the world using cash to try to lure people out of their cars and onto their bicycles.

The Netherlands has a pretty good claim to be the world’s foremost cycling nation. The small, flat country has bike shops, parking racks and a tidy network of red asphalt cycle paths everywhere you go. Where just 1 percent of all journeys by U.S. residents are made by bicycle, Dutch residents make more than 25 percent of trips by bike – a higher proportion than any other country.

Yet the government thinks too few citizens are cycling to work. In fact, the infrastructure ministry is so keen to tackle lingering car dependence it is pushing a benefit scheme that allows commuters to get paid by businesses to travel by bike instead. Cyclists can claim €0.19 (around $0.22) from their employer for every kilometer they pedal to the office. It means someone cycling 10 kilometers a day, five days a week, can earn around $500 a year from the tax-free benefit.

Some businesses have been paying the €0.19 per kilometer benefit to commuters getting to work by private transportation since 2006. But the government didn’t think enough employers and employees knew it could be claimed by cyclists as well as car drivers, and is now actively promoting it across the country.

The effort to widen the benefit’s take-up is part of a push to boost commuting by bicycle announced last year, with the Dutch government also committing $390 million to expand the country’s cycling infrastructure.

State secretary for infrastructure Stientje van Veldhoven said the aim is to get 200,000 more people cycling to work. She wants to ease traffic problems, address concerns about the climate from exhaust pollutants, and improve the general fitness of the population.

“Cycling is good for reducing congestion, it’s good for air quality in cities, and it’s good for the health of people themselves,” she told HuffPost. “And it can save money — you can save hundreds of euros a year. So there is a big advantage for your wallet.”

State secretary for infrastructure Stientje van Veldhoven on her bike.
State secretary for infrastructure Stientje van Veldhoven on her bike.
Wiebe Kiestra

Road vehicles are the world’s biggest net contributor of climate change pollution, according to a 2010 NASA study. EU governments — which have agreed to cut CO2 emissions from cars by 35 percent by 2030 — believe cycling can help reduce emissions, smog and traffic congestion while improving health rates.

It’s not just the Netherlands that’s trying to persuade commuters to cycle with cash incentives. Last month the Italian city of Bari announced it would give cyclists $0.23 for every kilometer cycled to work. Although the government-funded benefit is capped at $28 a month, Bari is also offering up to $170 toward the purchase of a new bike or $282 for an e-bike.

“By cycling, you’ll earn, it won’t only benefit your health,” said Bari’s mayor Antonio Decaro, who is keen to encourage more sustainable forms of transport in his car-congested city.

In France, riders can claim $0.28 per kilometer from their employer following a six-month trial project in 2014. Although only up $227 a year is available tax-free, the cyclists’ campaign group Fédération Française des Usagers (FUB) is pushing the government to raise the tax-free cap to $455 a year.

There have been some skeptical voices, however, who question whether these relatively small sums of money are really enough to make people ditch their car.

The results of the six-month trial in France, for example, offered only modest reassurance. While 8,210 commuters were given $0.28 per kilometer to cycle, the number of regular cyclists only grew from 200 at the beginning of the project to 419 at the end. And only 19 percent of the new bike riders switched over from driving a car. The majority of the converts had previously been using public transport.

Belgium perhaps offers a more encouraging example. It has the longest-established financial incentive scheme for cyclists, having introduced a cash incentive way back in 1999.

Holger Haubold, the economist policy officer at the European Cyclists’ Federation (ECF), says Belgium’s $0.26 per kilometer allowance, claimed by cyclists from their employer, has helped boost the popularity of commuting by bike in recent years. According to research by the ECF, the number of workers cycling to work and receiving the allowance increased by 30 percent between 2011 and 2015.

It’s not all about the money though. Making cycle paths more widespread has also been vital, said Haubold. Cycling must feel simple and safe. “Financial reimbursement is an effective measure in increasing the number of people cycling, but of course there does need to be good infrastructure too — they must go hand-in-hand,” he said.

In the Danish capital of Copenhagen — a cycling paradise where there are five times more bikes than cars — a 2017 city survey demonstrates the power of extensive cycling routes alongside the road network. Although 27 percent of riders said they cycled because it was cheap, 50 percent said they cycled because it was easier.

Cyclists cross the street on a dedicated bike line in front of the city hall in Copenhagen, Denmark.
Cyclists cross the street on a dedicated bike line in front of the city hall in Copenhagen, Denmark.
AsianDream via Getty Images

At the moment, cycling campaigners in the U.S. can only look to Europe with envy. Not only does cycling infrastructure lag far behind, but the inadequacy of U.S. mass transit systems make it difficult to encourage the kind of short, last-mile journeys by bike that are commonplace in European cities.

Even the very small amount of money introduced by the U.S. federal government in 2009 to incentivize cycling to work — a $20 a month tax benefit — was suspended by Congress as part of the 2017 Tax Cuts and Jobs Act.

There is also the power of the automobile lobby to contend with. Driving is heavily subsidized through government spending on road infrastructure: Taxation Foundation research shows that drivers’ gas taxes and tolls pay for only half of all state and local road spending, while the rest was financed out of general revenues. Some drivers also get the fringe benefits of a company car and free employee parking.

Ralph Buehler, a transport scholar at Virginia Tech, thinks free parking remains a stubbornly compelling factor when it comes to commuter choices. He co-authored a research study on Washington, D.C., that shows the incentives inducing people to walk or cycle are largely outweighed by the benefits drivers often still enjoy.

“As soon as you have free car parking in the mix of incentives, then the other incentives and benefits are muted — they don’t have a big impact,” Buehler explained.

The League of American Bicyclists would like to see cash incentives to make biking a bigger part of the culture in U.S. cities, along with greater investment in cycling infrastructure.

According to the League’s 2018 report, the IRS forgoes around $7.3 billion in tax revenue each year due to the commuter parking tax benefit for car drivers, which allows businesses to offer tax-free parking. By comparison, the federal government spends only $832 million a year on biking and walking infrastructure.

“In the U.S. we spend far more on subsidized parking than on trying to build places for people to cycle and walk — so that’s frustrating,” said the organization’s policy director, Ken McLeod. “We’re subsidizing higher-income workers to drive alone into urban centers, when we should be expanding healthy and active commute options for people of all incomes.”

Commuting habits are really hard to shift. If you want to tempt people onto bikes, you have to think about the right kind of incentives. The lessons from Europe are clear: Money is a good motivator, but it’s not the only one. Cycling has to be easy and enjoyable enough to get people thinking beyond their bank balance.

CORRECTION: This story has been updated to clarify that the €0.19 per kilometer benefit has been made available by some Dutch businesses to commuters who use private transportation, mostly car drivers, since 2006.

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