Governments Should Start Paying People to Bike to Work

In North America, where cars reign supreme, a powerful idea could gain ground like it is in some areas of Europe — paying people to bike to work. As our cities grapple with traffic congestion, pollution, and sedentary lifestyles, it’s time to consider a new approach.

The next step beyond incentivising the purchase of e-bikes, is to actually pay people to commute to work by bicycle and leave the car at home. Here, we explore why it’s time for North America to follow Europe’s lead in incentivizing cycling to work, uncovering the benefits for both individuals and the environment.

The Rise of the E-Bike

In an era where sustainability is paramount and the need for greener transportation options has never been more pressing, a two-wheeled revolution is taking Europe by storm. While traditional bicycles have long been a favored mode of eco-friendly transport, a new player has electrified the scene – the electric bicycle, or e-bike.

Electric bicycles, affectionately known as e-bikes, have seamlessly blended the convenience of motorized travel with the health benefits of pedaling. These two-wheel wonders come equipped with an electric motor and battery, offering a helping hand to riders as they conquer steep hills and zip through their daily commutes at higher speeds. For many, e-bikes have become the perfect solution, allowing them to arrive at work without breaking a sweat while still enjoying the benefits of moderate physical activity.

Copenhagen

Cash for Commutes

The shift towards e-bikes is not just a personal choice but a societal one, fueled by innovative bike-to-work programs. These initiatives, prevalent across many European countries, take the form of tax incentives that reward employees for cycling to work instead of driving personal cars. The concept is simple – swap your car keys for bike pedals, and your monthly paycheck gets a tax-free bonus.

The trend of paying Belgians to bike to work is not just on the rise; it’s set to become a mandate, revolutionizing how people commute. In recent years, the number of employees receiving a bicycle allowance has surged, and this upward trajectory is expected to continue as Belgium’s bicycle allowance becomes obligatory.

In 2022, nearly one in three employers (29%) in Belgium voluntarily provided their workers with a bicycle allowance. This allowance, calculated based on the distance commuted by bicycle, has become a sought-after perk, with the share of Belgians benefiting from it doubling in just five years, from 7% in 2017 to 14% in 2022, according to HR service provider SD Worx.

The geographical distribution of this benefit varies, with Flanders leading the way, where almost one in five private employees (18%) receive a bicycle allowance, while in Brussels, it’s a modest 6%.

What’s even more exciting is the mandatory bicycle allowance. This shift will undoubtedly boost the number of cyclists on the road. Those who commute by bike but didn’t yet have a specific bicycle allowance through a collective bargaining agreement (CBA) are to receive a tax-free allowance of €0.27 per kilometer from May 1, 2023 up from €0.25 per kilometer in 2022. The agreement between employer and employee representatives within the National Labor Council ensures that this allowance covers a maximum of 40 kilometers per day, equating to a daily maximum of €10.80.

“In 2021, one in seven employees (14%)  received the cycling allowance. That is a decrease of one third: pre-corona it was almost one in four (22%),” said Veerle Michiels, mobility expert at SD Worx, in a press release for light electric vehicle trade association LEVA EU. “The median amount per cyclist per year increased from €73.92 in 2019 to €91.20 in 2020. However, it fell again to €76.80 (for the first 8 months of 2021). The allowance is a great incentive to get employees on their (e)cycles.”

A Continent-Wide Movement

Across Europe, there are hundreds of tax-incentive and purchase-assistance schemes for bike-to-work programs are making an impact. These programs aim to unlock a multitude of benefits by swapping cars for bikes. Fewer cars on the road mean less traffic congestion and reduced emissions, leading to cleaner, more efficient cities.

Moreover, cycling, whether on traditional or electric bikes, brings a wealth of health benefits. Numerous studies have highlighted the advantages of cycling, making it a win-win for individuals and cities alike.

However, financial incentives are just one piece of the puzzle. To truly transform commuting patterns, investments in safer cycling infrastructure are essential. These investments create an environment where cycling is not just encouraged but also safe and convenient.

What about France?

Brussels, Belgium

The UK’s Cycle to Work Scheme

One of the best-known examples of incentivizing bicycle commuting comes from the United Kingdom. Introduced in 1999, the Cycle to Work Scheme is a government-backed initiative designed to encourage employees to purchase bikes and cycling gear through a tax-efficient leasing model. Under the scheme, workers can save between 32% and 47% on the cost of a new bicycle and accessories, depending on their income tax bracket.

Here’s how it works: Employees choose a bike and any necessary gear—helmets, lights, locks, and more—then “hire” it through their employer. Payments are deducted from their gross salary through a salary sacrifice arrangement, meaning they pay no tax or national insurance on the value of the equipment. After the lease period (usually 12 months), they can choose to extend the hire, return the bike, or purchase it at a fair market value.

Since its launch, the scheme has been widely adopted, with over 1.6 million commuters participating through more than 40,000 registered employers. The goals are clear: to promote healthier journeys to work, reduce environmental pollution, and help shift commuting habits toward low-carbon alternatives.

While the scheme doesn’t offer direct per-kilometer payments like Belgium or the Netherlands, it represents a significant upfront financial incentive that lowers the barrier to entry for new cyclists. Particularly as bike prices—especially e-bikes—can be a major hurdle, this type of support makes sustainable commuting more accessible.

Importantly, the UK government has updated the scheme in recent years to allow for higher-value bike packages, including e-bikes, which were once restricted by outdated price caps. This change acknowledges the growing role of electric bicycles in extending commute distances and flattening hilly terrain—critical for making cycling viable for more people across a variety of geographies.

While the UK still faces challenges in terms of cycling infrastructure and road safety compared to its European neighbors, the Cycle to Work Scheme continues to be a key pillar in the country’s sustainable transport strategy—a practical, popular program that shows how financial incentives can catalyze change, even in car-centric cultures.

The Netherlands: A Blueprint for Success

The Netherlands is globally renowned for its deep-rooted cycling culture, where bikes outnumber people and dedicated cycling lanes stretch across the entire country. But beyond infrastructure and cultural habits, the Dutch have implemented smart financial policies that make biking to work not only easy—but economically rewarding.

At the heart of the Dutch incentive system is the fietsvergoeding, or bicycle allowance. Dutch employees who commute by bike can receive a tax-free reimbursement of up to €0.21 per kilometer from their employers. This allowance is typically arranged through employer payroll systems, making it seamless and automatic for workers. For a commuter cycling 10 kilometers each way, this can add up to over €80 per month, entirely tax-free.

This model benefits both employers and employees. For employers, supporting cycling helps reduce parking costs, promote healthier staff, and cut down on carbon footprints—important metrics in ESG (Environmental, Social, and Governance) reporting. For employees, it turns a daily habit into a direct financial gain. Notably, the Netherlands has also encouraged employers to lease bikes to employees tax-free, similar to a company car but with fewer emissions and costs.

The Dutch approach doesn’t stop at subsidies. It’s backed by over 35,000 kilometers of protected bike paths, bike parking facilities at nearly every train station, and policies that treat cyclists as a first-class mode of transport.

Bike commuting in the rain in Amsterdam

A Global Bike to Work Impact

France has also joined the movement, offering up to €0.25 per kilometer cycled to work, resulting in a 50 percent increase in active cyclists during the pilot phase.

In Italy, incentives vary by location, with some regions offering as much as €0.21 per kilometer for bike commuters. The government also provides mobility vouchers toward the purchase of a new bike.

Spain’s Got Next?

And the revolution continues to spread. Spain’s Comunidad Valenciana has introduced a grant for bike and personal mobility vehicle (PMV) purchases. There is also a proposal submitted to the Valencian parliament proposing a nonbinding incentive of up to €360 for employees who choose to cycle to work. The group responsible is also advocating for deductions in personal income tax and repairs, encouraging more people to embrace cycling.

This European trend of paying citizens to cycle is a relationship of trust, relying on users to manually upload their traveled kilometers through mobile apps. This approach could soon become a staple in Spain, marking another stride toward a more sustainable future.

North America: E-Bike Incentives Gaining Momentum

While North America has been slower to adopt direct bike-to-work financial policies and incentives, e-bike subsidies have been very popular.

In the United States, several local and state-level programs have stepped in where federal policy lags. Colorado, for example, has launched one of the most ambitious e-bike incentive programs in the country and it sells out almost immediately. Residents in Denver can receive rebates of up to $1,400 toward the purchase of a new e-bike, with additional support for income-qualified individuals.

California finally came forward with a e-bike incentive of its own offering 1,500 vouchers for a $2,000 e-bike rebate, which sold out immediately. Round two was increased to 2,000 vouchers, but has been marred by technical issues with the roll-out and is currently on pause.

Certainly in cities like Los Angeles, which have been choked by traffic congestion for decades, getting more people on e-bikes in a climate that offers ideal bike commuting weather year-round is a no-brainer. Of course, more infrastructure is needed as well, not just more bikes, or it will be a wasted effort.

Other cities like San Francisco, Austin, and Portland have piloted or proposed similar rebate schemes, while states such as Vermont and California are exploring statewide programs that prioritize both sustainability and equity. These initiatives typically offer point-of-sale discounts, making it easier for lower-income households to access e-bike transportation without large upfront costs.

In Canada, provinces like British Columbia have also introduced rebate programs, with incentives ranging from CAD $350 to $2,000, depending on income and bike type. Additionally, national advocacy is growing for a federal e-bike incentive, similar to existing electric vehicle credits.

In our global society, incentives have been used to get things done across the board. Businesses and people have long benefited while governments use incentives to encourage investment and behaviour that benefits society as a whole. Usually, it’s an economic benefit, but the good thing about bicycles is that there is an economic benefit, but also a slew of other benefits including cleaner air, and lower health care costs. And, let’s be honest, when you have someone like Premier Doug Ford in Ontario, Canada thinking seriously about spending a $100 billion on a tunnel under a highway to build another highway, it might actually be more financially prudent to build a good cycling network and pay people to bike to work a certain number of days per year.