The MBTA, Boston’s regional transit agency, launched contactless payments in August 2024. Now anyone riding the bus or train can simply tap their bank card directly at the fare gate or onboard the vehicle to pay their fare (also known as open loop “Pay As You Go”). This is great news for people who don’t want to deal with the hassle of a separate CharlieCard. It’s even better news for employers who subsidize commuter benefits.

Commuter Benefits in Boston

Historically, Boston employers have had limited options they could offer employees for pre-tax commuter benefits. Most participate in the MBTA’s Corporate Perq program, which allows employers to distribute monthly and some weekly passes. Because Perq originated well before the pandemic, it was designed for employees commuting five days a week, and the lack of non-pass options wasn’t much of an issue.

Now, with so many hybrid commuters, these fixed passes are less often seen as a good deal. Even employers that want to support transit, but require less than five days a week in-office, are concerned about buying passes that won’t be used. The fact that many employers still manage and even subsidize Perq monthly passes for their hybrid employees demonstrates how much value both employers and employees derive from any kind of commuter benefit program. But it’s also safe to say that since the pandemic, monthly passes no longer work as a default for every Boston employer.

Modern Technology and Benefits

In August 2024, the MBTA launched a brand new fare payment system called Charlie, accepting “contactless payments” on all buses, trolleys, trains, and subways. This new open loop system allows any rider to pay their fare simply by tapping their existing bank card on board or at the fare gate. The CharlieCard and legacy Perq cards are still accepted on the old card readers, but this new option opens up a world of opportunities for the MBTA and its riders. No need to fuss at a fare machine while your train is pulling up – simply pay with the card that’s already in your wallet. Read more about contactless and open loop transit fare technology on Jawnt’s blog.

This new launch is particularly exciting for commuter benefits. The Jawnt Pass, a dedicated commuter debit card already in use in several other cities, now offers a new and distinct solution for Boston employers. Employers can put any amount of stored cash value on each Jawnt Pass, and their employees simply tap on when they’re ready to ride. The Jawnt Pass offers a true usage-based commuter benefits solution.

Instead of subsidizing a monthly pass for every employee, whether they’re going to use it or not, employers can now tailor their contributions to each employee’s actual commute. Read on for some examples of where this can result in significant savings to the employer.

Cost Savings Example

Consider this example below of a Boston employer who subsidizes their commuter benefit programs.

Somerville College has 1000 employees that receive transit commuter benefits. Most take the bus and subway, and some take either just a local bus or commuter rail. Somerville College has been providing a 50% subsidy for monthly passes, and its employees all commute two days a week. There are 12 different pass products that employees are enrolled in, with half of employees enrolled in the popular LinkPass.

For each of the 500 employees who receive an unlimited monthly $90 LinkPass, the College is spending $45 on their subsidy each month. If each of those employees paid with Jawnt Pass, they would only need $38.40 worth of transit a month (eight trips per month @ $2.40 per trip), which would only cost the College $19.20 a month. 

Adding up these savings across all 1000 employees, even with their different starting commute locations, the College could reduce their spending by $44,000 a month (52%). 

Put Those Savings to Work

When an employer is able to save money on commuter benefits like this, there are several ways they can reinvest those savings to support their commuter benefit programs, including:

• Increase the subsidy amount, helping convince more people to try the MBTA.
• Offer different subsidies to different teams based on the number of days at their work location.
• Introduce subsidies to new teams and departments, expanding opportunities and choices.
• Offer post-tax benefits, such as bikeshare memberships, cash for purchasing ones’ own bike, and even membership in mobile bike repair service.

Employees save money with tailored contributions, too. 

Calculate your Savings

Is your commute scenario a bit more complicated? Do some employees commute more days than others, or are you balancing multiple locations? Get in touch and we’ll analyze your potential cost savings with Jawnt Pass. Schedule a call with our Boston account manager today.