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

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.