With greater scrutiny on costs and emissions targets, grey fleet has risen to the top of the fleet agenda in a public sector looking for an alternative to costly and hard-to-control mileage reimbursement.
The public sector is key and still just the tip of the iceberg. The BVRLA’s Getting to Grips with Grey Fleet report found that public sector grey fleet vehicles cost taxpayers £786m per year, but the cost to the private sector could be seven times as much – almost £5bn.
The grey fleet is just as endemic in corporate mobility. Increasingly private sector travel policies now mandate that employees drive vehicles of a certain standard.
There can be a temptation for corporates to let employees drive their own cars for work. It may seem easier, especially for occasional use and when compared to the logistics of alternatives like pool cars. In a world with more and more people working virtually or from home, it’s easy to see how the grey fleet might make sense.
However, there are a number of factors that should be encouraging businesses to rethink grey fleet as a viable option for employee mobility.
Driver and vehicle safety is one. Many organisations now require the use of cars and vans with a certain NCAP rating. These policies also usually cover standards for employees’ vehicle emissions and sustainability, not least because a company’s annual reports may well detail its overall CO2 footprint.
And CO2 is again only the tip of the iceberg. The past few years have seen increasing focus on nitrogen oxide (NOx) emissions, with the Euro 6 standard now applying to both cars and vans and applying ever more stringent requirements for vehicles that run on diesel – with significant fines for non-compliance.
Overlaying the need for better, more modern vehicles to meet travel policy requirements, mileage reimbursement often remains a largely unmanaged cost. Expense claims might be handled by a different team to those responsible for other forms of business mobility, leading to far less clarity on what the company is actually spending to move its employees around.
In fact, we find one of the issues many customers face when they start to address grey fleet is they have absolutely no idea how much they’re spending on it in the first place – or why.
Viable alternatives are also making it increasingly unnecessary for employees to rely on mileage reimbursement. A car club vehicle might be parked just down the road, or a rental branch could be located a couple of miles away – and technology can let businesses instantly see what’s available. Even those pool cars for people working on-site can be managed by an external partner.
The first step is to understand how employees are currently travelling. Only then can they do it more effectively.
Adrian Bewley is assistant vice president of business rental in the UK and Ireland for Enterprise Rent-A-Car
