Firm’s efficiency and the feasibility of incentives for flextime adoption: a preliminary analysis of Chilean employer’s response

Flextime is a Travel Demand Management policy that allows workers to arrive/leave within a certain threshold of time but staying on duty during a period of the day (core hours). Such flexibility in arrival time can have an impact on relieving traffic congestion as it can shift demand to non-peak periods. However, in several countries, companies are usually reluctant to provide flexibility arguing possible loss in their productivity and efficiency. This paper discusses a preliminary study on perceptions of challenges, and the potential of flextime in congested urban areas. In doing so, we present the information gathered through in-depth-interviews and subsequent questionnaires applied to managers of cars dealers in Santiago, Chile, obtaining both qualitative and quantitative information. The quantitative information obtained was used to develop (1) a data envelopment analysis to investigate whether firms’ productivity is affected by flextime or not, and (2) a binary logit model to evaluate financial and non-financial incentives that can allow firms to adopt flextime or change work arrival times. The results obtained from the sample show that, for this particular industry, flextime might not have a significant impact on firms’ productivity. Additionally, we found that financial incentives and competitors’ work starting times have a significant impact on accepting flextime or relaxing arrival constraints. We also found that if arrangements with the whole industry to change work starting times are made, the effect of this change can be as effective as the provision of financial incentives.