Fuel card, or static rate for travel costs that actually covers the cost
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If I were to do it, I'd take the mileage of the drive as the most important factor, as companies in the US know the addresses of employees. Then I'd assume a gas price of $4.5/gallon at all times (Midwest prices aren't like the coasts) and assume a gas mileage of 25mpg. The person is paid this every day of the year without exception
I'll offer Bob a place near the workplace if he's a good employee. If he asks me to pay for his transportation expenses, it won't happen. I think I'd formally invite him to find another job at the end of the contract.
If I am travelling to a location purely to do my job at that location, then travelling to that location is part of my job. I must be reasonably compensated for it either as part of my salary or as an extra (tax adjusted) payment.
Switch the pronouns and such to apply for Bob and Alice both.
No, the one with the longer commute should be taxed extra to account for all the damage caused to the environment, increased traffic, road wear and tear, etc.
Commuting should never be encouraged. Live where you work.
Not everyone has that choice. Living where you live prevents upward mobility.
Offering to finance all or part of the tickets is a good option IMO. My company offers the German "job ticket" or whatever it was called again to a percentage.
If it were me I'd just get an average commute, provide a stipend of gas or transport costs within your city, e.g. 15km distance, or a monthly pass for local area transit. If I'd want to relocate someone I may offer a signing bonus to help with moving and settling costs.
It's a reasonable expectation that if your job is at a workplace in Toronto, being within city limits is not an unreasonable expectation.
The compensation could be capped at 15 miles or 30 minutes or something, which would encourage people to live closer to work.
I would negotiate that with them because maybe Bob doesn't care but Alice does or vice versa. Now if I was either bob or Alice. Yes I'm calculating fuel, maintenance and meal cost into pay.
Employees living far away is not something I would want to incentivize for so many reasons.