Commuters Find an Alternative in Uber-WageWorks Pact

Ride-sharing services aren’t only changing how 2 a.m. bar-hoppers travel. Commuters, too, are utilizing them to conveniently get to work.

WageWorks Inc., which provides consumer-directed benefits such as commuter benefits and flexible spending accounts, announced a partnership Dec. 13 with Uber Technologies Inc. to provide pre-tax benefits to commuters who use UberPool. WageWorks users who already save 40 percent on public transit via pre-tax funds can now do the same with the ride-hailing service.

“The mode of transportation used by commuters has changed dramatically in recent years,” said Dan Neuburger, president of commuter service at WageWorks. “As we continued to look for ways to make commuting less costly and more convenient for people, we thought it would make sense to explore whether ride-sharing would be compliant with the section of the IRS that covers commuter benefits.”

WageWorks and Uber could not partner using normal Uber services, just UberPool, according to IRS rules. Uber could only be included in the transit pass definition — and therefore could only partner with WageWorks to offer transit benefits — if the car can fit six adults plus the driver. There don’t necessarily have to be six passengers at a given time, but the capacity has to be there.

Once the companies figured out how to be compliant, they successfully launched the service in New York in August.

Whether the cost of commuting with the WageWorks-Uber partnership is comparable to public transportation will vary by user. Mostly, it depends on where the commuter is coming from, said Neuburger.

He added, “We believe car-sharing services complement the use of public transportation. They don’t necessarily compete directly with one another, even if at times they do.” For example, this partnership may be a way to solve the “first mile, last mile” problem. Even if a commuter uses public transportation to get part of the way home, they can use UberPool on the first or last stretch for convenience.

WageWorks has almost 60,000 companies of various sizes and industries that use its products across the country, and a good portion of these take advantage of the commuter benefits, including UberPool, said Neuburger, although he could not disclose the exact number.

To utilize this benefit, commuters access UberPool using the Uber app. First they must register their WageWorks Transit benefit card with the app, and then they can pay for the pre-tax-deducted ride.

The benefit will continue to expand to Boston, Washington, D.C., San Francisco, Philadelphia, Las Vegas, Denver, Atlanta, Miami and New Jersey, with other cities in the pipeline for the near future, said Neuburger.

Andie Burjek is a Workforce associate editor. Comment below, or email at aburjek@humancapitalmedia.com. Follow Workforce on Twitter at @workforcenews.