It can created greater efficiency for both the employee AND the employer beyond saving money.
In the NYC area, it is not unusual for people to spend 3+ hours per day in door to door commuting.
Leave the house at 7:15 am, get to your desk at 9am... leave the office between 5-7pm, get home 8-10pm. Rinse and repeat the next day.
So a 13-15 hour day, of which 8-10 hours are spent actually working at the office.
Remotely, the employee can put in a 10+ hour day.... just by flipping on their computer at 8:30 am and working until 6:30pm. They still get to sleep in longer than they used to, they can "get home" earlier than they used to, all while actually giving their employer more time.
It also cuts down on sick time (as people can continue to work from home when a little under the weather). Cuts down on personal time off (as it becomes easier for the worker to cut out for an hour to take their kid to the dentist as opposed to having to take off an entire day for the errand). etc.