Employer Perceptions of Introducing Dynamic Pricing for Urban Rail: Evidence from Tokyo during Work Style Changes

Abstract

In Tokyo, there is growing interest in the introduction of dynamic pricing for urban rail or a congestion measure that distributes rail demand through an additional charge during peak hours. Employee commuting costs in Japan are often borne by employers. In this study, we analyze employers’ perceptions of and potential responses to the introduction of peak-load pricing in the urban rail network based on a survey of 215 major companies with headquarters in Tokyo Metropolis. The results show that the median value of “intention to pay the additional charge during peak hours” 20% to 30% of each company’s commuter pass expenditure per month, per employee. Furthermore, companies can also consider diversified responses that may facilitate congestion easing. The results show that 70% of the sampled companies are likely to promote varied work styles if peak-load pricing is introduced. We confirm that this response could be stronger for companies with more employees. Companies with larger profit margins per employee and/or those providing professional and business services are likely to review their payroll systems and benefits. In cases where the additional charge is set above the payable amount, companies with more employees can promote varied work styles, require employees to pay part of the commuting costs, and consider relocating employees or offices away from Tokyo Metropolis. Companies in the hospitality, lifestyle-related, and entertainment industries are unable to change the way employees work and would review their payroll systems and benefits.