The way I read the link, it's basically a tax-free reimbursement for the money you spend in the mode the employee has chosen to use as alternate transportation.

With bike commuting, the reimbursement is not clearly defined, though. It just states "reasonable expenses". I imagine if I was part of the program and needed to replace a blown tube, I would be reimbursed for the $6 or so I spent on it. Tax free, of course.