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Guaranteed Ride Home

What is a guaranteed ride home programme?

If employees carpool, walk, cycle or catch public transport to work, a guaranteed ride home programme ensures a lift home in the event of an emergency or unexpected event.
Typical circumstances that qualify for a guaranteed ride home include personal or family illness or crisis. It may also include situations such as unscheduled overtime and a carpool driver not being able to take carpoolers home as planned.
In these situations, the employer covers the cost of the employee returning home. This may be by public transport, fleet car, taxi or rental car, depending on the situation and the organisation’s guaranteed ride home programme. 
Guaranteed ride home programmes can significantly increase use of alternative commute modes.

How much will it cost?

Guaranteed Ride Home (GRH) programmes cost less than employers initially expect. Overseas research indicates that between 1-13% of eligible employees take up the offer of a GRH every year. Use is higher where overtime qualifies for a ride home compared to emergency use only.
Anecdotal evidence from medium sized New Zealand organisations currently offering GRH programmes is that the take up rate is less than one ride a month. Employers may also set a cap on the amount of subsidy provided for a single trip and the number of times a year an eligible employee may use the programme.
In one workplace for example, a maximum of $80 per trip is subsidised and employees may use up to four rides a year. If public transport passes and fleet car use are included as preferred options for non-emergency rides the average cost per trip may be significantly lower.
Guaranteed Ride Home programmes can also be trialled for a set period of time such as one year. During this time the organisation can monitor the costs and benefits of the programme more accurately before committing to the programme long term.

Does a Guaranteed Ride Home programme incur Fringe Benefit Tax?

The payment of public transport or taxi fares to travel home is a fringe benefit and would also be subject to GST on the value of the cost provided by the employer. However, an exemption may apply to fringe benefits in this category if the general employee exemption and maximum employer exemption are met.
This exemption may apply when the total taxable value of all unclassified benefits to each employee, including guaranteed ride home payments, is less than $300 in each quarter for each employee with a maximum of $22,500 per annum for all employees.
For more information please see www.ird.govt.nz/fbt/

How effective is a guaranteed ride home programme?

One study found that the existence of a Guaranteed Ride Home programme (GRH) is among the most important factors determining the effectiveness of a Commute Trip Reduction (Comsis, 1994). One survey of commuters found that 59% of carpoolers and public transport users consider a guaranteed ride home important in their decision to use these modes (K.T. Analytics, 1992).
Another survey found that the availability of GRH has a value roughly equivalent to subsidized public transport fares at a fraction of the cost (Hunt and McMillan, 1998).”
In a recent evaluation of the ride matching service, Let’s Carpool, carpoolers from an organisation which also had a Guaranteed Ride Home (GRH) programme, had very positive feedback. 95.2% of people rated the GRH scheme as either ‘very useful’ or ‘useful.’