But this is wrong. It's not an externality for the company. Companies often often go out of their way to reduce this cost. Things like:

- Covering the cost of a FastPass

- Deciding where to locate a new office based on where employees live

- Offering a company shuttle from a train station

- "Google Bus" and other similar initiatives

- Offering a potential employee a higher salary because of their long commute time

These things happen all the time, and all bring a portion of the commute cost into the company.

Don't know about the US, but in the UK all those are taxable benefits, so they would reduce employees' take-home pay.

BTW I've never heard of a company moving for its employees' benefit, unless by "employees" you mean "senior management & board members".

Here in Houston most of the major petchems have satellite offices in the suburbs (often multiple) to support their workers.

It is not an externality, as an externality is strictly a cost that is borne primarily by parties outside of the transaction. The cost of a commute is external to the Company, but the labor market is two sided (employee/company) and the costs are therefore priced into the transaction appropriately.