Expert Panel: SME fleet management challenges
To help SMEs challenged by fleet management, our expert panelists Sam Sterry, Duncan Chumley and Stuart Thomas share advice on duty of care, vehicle downtime, data utilisation, and adopting new mobility models
Employers have responsibility under Health and Safety legislation to ensure the safety of their employees, and this includes the activity of driving for work purposes, whether that is in a company vehicle or an employee’s own vehicle – the so-called ‘grey fleet’.
Duncan Chumley from Daimler Fleet Management explains: “A company vehicle is considered a place of work and UK companies have a legal and moral obligation to ensure that duty of care needs are met.
“When you consider official statistics point to over 25 per cent of all road accidents involving someone driving on company business, it shows how important getting duty of care right can be for both the safety of your employees but also the continuity of your business.
“All fleet operators, irrespective of size must have a structured fleet policy in place that covers duty of care to their drivers, their property and the safety of other road users.”
Giving reassurance to hard-pressed SMEs daunted by duty of care, Stuart Thomas from the AA says: “It is understandable that some SMEs might find themselves challenged to fit in the administration around people and vehicle management. Done correctly, however, employment law protects both employer and employee, helping to keep businesses operating at the top of their game.
“The good news is that keeping your people safe isn’t complicated or onerous. A solid understanding of the legal requirements, coupled with suppliers and partners who believe in keeping it simple yet compliant, is all a small business needs to maintain best practice behaviours.”
Ensuring drivers are properly trained is a vital step to ensuring their safety, as Duncan explains: “Drivers should pay attention to vehicles checks (tyres and oil), the correct seating position within their vehicle to reduce strains and injury, and fully understand the vehicle controls before setting off on any journey.”
Duncan adds: “Fleet management providers have the necessary experience and knowledge to ensure that your fleet policy is fit for purpose and covers all salient points of best practice. It is also key to ensure that all employees have easy access to the fleet policy and that mandated familiarisation with it is rolled out.”
It is estimated that there are 14 million grey fleet cars on the UK’s roads, which drive around 12 billion business miles each year.
Looking at the reliance on grey fleet vehicles, recent research commissioned by Europcar Mobility Group UK found that over a quarter (28 per cent) of companies with 10-25 staff rely on grey fleet vehicles, rising to 40 per cent for firms with 26-50 employees. And nearly a third of companies with 10-25 employees said that up to a quarter of their staff chose cash-for-car.
Company-owned vehicles are more difficult to manage from a health and safety perspective. Europcar’s Sam Sterry explains why: “Unfortunately, when employees drive their own vehicles for business, there is no easy way to collect data about their driving behaviour, leaving employers unclear whether a vehicle has a valid MOT, tax, insurance or when it was last serviced.
“If a grey fleet driver is at fault for an accident while driving for work and they don’t have adequate insurance or a valid MOT, the employer could be held responsible. Where there is evidence of failings under the Duty of Care Act or the Corporate Manslaughter Act, employers (including senior employees) could find themselves facing prosecution which may result in hefty fines or even prison sentences.
“In addition, there is the burdensome administration and expenses associated with claiming fuel costs for business mileage.
“One answer to tackle the risks of grey fleet, without having to commit to the acquisition of company vehicles, is to use rental and car share. These are good solutions not only for the smallest SMEs, but also for public sector organisations with stretched budgets.”
Keeping up to date
It is important to understand duty of care requirements and understand what is needed to be compliant, including keeping up to date with industry news incase regulations change. Stuart advises: “Review the requirements, outline what’s needed to be compliant, put in place the processes and policies and then set aside some time regularly to review whether anything has changed. Keep an eye on industry news, as you will often hear about any policy updates and legislation overhauls through sector‑specific channels long before you must act.”
SMEs can get support on managing their duty of care from various places, if it becomes too burdensome, advises Stuart. He says: “Most industries will have representative bodies whose role it is to support their members, including providing guides to fleet management and duty of care, while suppliers will often provide cost-effective consultancy and templates to help SMEs meet their obligations.
“For SMEs that feel they want a helping hand in understanding their obligations and navigating the policy and process requirements, organisations like DriveTech offer comprehensive duty of care packages and training. Likewise, SMEs should also push their suppliers for guidance on ensuring vehicles are properly maintained, servicing schedules are adhered to, a preventative approach is taken to vehicle downtime and drivers are supported while on the road with appropriate breakdown and accident management solutions.”
Breakdowns and maintenance
Breakdowns mean less time businesses can spend on the road, getting the job done, which can be harmful from a cost and reputation point of view.
Sam Sterry explains: “Breakdowns can have a serious impact on employees’ productivity, as it means they are unable to reach vital appointments, as well as putting pressure on budgets with the cost of additional transport to get them to their next meeting.”
So how can SMEs ensure their vehicles are kept in a roadworthy condition?
“The old cliché ‘prevention is better than the cure’ stands true here,” says Duncan Chumley. “Regular checks on consumables should be included in weekly safety checks which are validated by a monthly declaration typically as part of the business mileage submission process will focus driver’s attention on the importance of regular maintenance.
“Consider a manufacturer who offers a robust roadside assistance programme. For example all new Mercedes-Benz Vans come with MobiloVan cover, reducing the aggravation of being off road for long periods. Does your cover offer like for like replacement vehicles? Can they repair roadside? And what will happen to your business if your vehicles are taken off the road?”
Duncan adds that the inclusion of service and maintenance within your funding arrangement with your fleet management provider will take away the burden of unplanned repair costs and help you budget effectively.
Stuart Thomas believes that managing downtime, or “optimising uptime”, is about having robust schedules in place which make the most of the natural breaks in vehicle usage to deliver the necessary services, repairs and upgrades.
He says: “Although famous for our breakdown service, we do so much more. Rather than providing a purely reactive service, we aim to stop the breakdown from happening in the first place via prediction and prevention. Our continued investment in technology and data services to support fleets, via connected solutions, means we can offer guidance on the best time to bring vehicles back to base, when to schedule essential maintenance and how to fit ongoing servicing checks into daily routines.
“In addition, our recent acquisition of Prestige Fleet Servicing (Prestige), a technology-led supplier of Service, Maintenance and Repair (SMR) services to fleet and leasing companies, is helping us to address a driver’s planned and unplanning needs.”
Stuart offers further advice to keep businesses productive when vehicles are off the road: “Having breakdown cover in place is recommended to deal with the unexpected, while some SMEs may also plan their fleets around spare capacity. We have worked with organisations who have invested in their own additional vehicles, as well as those which have taken advantage of pool vehicles via an ongoing subscription service to manage when their vehicles are unexpectedly off the road. We’re also helping SMEs to take advantage of overnight MOT and servicing solutions.”
Another potential solution to the burden of managing vehicle maintenance and downtime is to use rental vehicles, believes Sam Sterry.
She explains: “By using car hire from Europcar, staff can get on the road in a car that generally is going to be less than eight months old and fully maintained, thereby reducing the risk of breakdown in the first place. Plus, they feature the latest motoring technology, are fuel efficient, there’s a wide choice available, and they are accessible from a nationwide network. This means employee productivity can be maintained, as well as delivering real cost savings for the business which can ultimately make a real impact – all without any direct intervention needed from the employer.”
“For longer-term van rental, we also have a partnership with BT Fleet to provide service, maintenance and repair, ensuring that vehicles are kept in tip-top condition throughout a contract, giving firms even more certainty,” Sam adds.
Telematics, connectivity and fleet technology is a great way to give fleets insight into their fleet operations. But it is only effective if companies use the data to make changes. Some small companies however can feel burdened by data, so what advice would our panelists give?
Duncan Chumley said: “The availability of data within the industry is increasing. Seemingly all aspects of business can now be reported on in some way. But it is important to remember that having ‘sight of data’ is not the same as having ‘data insight’. Leasing companies can provide assistance by aligning the insight to the SME’s key objectives, applying appropriate filtration to the data in order to make recommendations.
“The insight can then be used to create an action plan with workable timescales to implement effective resolutions and improvements. Having the knowledge is important but unless you are using it to improve it serves little purpose other than to populate PowerPoint slides.”
Stuart Thomas believes that understanding and deploying data in a business should be kept simple. He says: “While they can be exceptionally useful for monitoring and planning, connected services are not a cure-all solution to business woes. Used effectively, however, as part of the right overall mix of technology, they can help to improve efficiency and contribute to business decision-making.
“Any supplier of tools and systems which embrace connectivity should be working with SMEs as more than a transactional data handler. SMEs should be receiving consultancy to help them understand and interpret the data, selecting the information which is most relevant and updating processes accordingly.”
It also pays to think about how the data can best support each individual business, not just relying on the ‘out of the box’ solutions. Giving an example, Stuart says: “We worked with one organisation that saw huge benefits from connected solutions when it came to paying congestion charges. Vans were constantly travelling in and out of central London, and the drivers were too busy to keep the fleet manager E
F informed of their movements. Often, the first the business knew of the congestion zone charges was the penalty fines which came through the post. Using connected services, the fleet manager was able to see which vehicles had been into the zone each day and pay the charges there and then, saving the business significant sums.”
Future of mobility
The government has shown considerable interest in investigating new models of mobility, which it believes can address air pollution, ease congestion, and make the country more productive. Vehicle ownership is being questioned, and new sustainable ways of travelling such as car sharing and public transport is being looked into – including whether it is feasible to be billed for one journey even if multiple modes of transport are used.
Can this way of thinking help SMEs? Sam Sterry believes it can: “The big question is ‘what is fit for purpose’ for today’s businesses? And more often than not the answer is not outright acquisition or long-term lease.
“Similar to other industries, such as the housing and holiday sectors, the sharing economy has paved the way for a new wave of transport options. As decreased parking spaces, higher insurance costs and strict emission standards drive SMEs away from traditional vehicle sourcing, car clubs and pay-by-the-hour vehicle use have sparked a revolution which only looks to get bigger. This is good news for SMEs who can match flexible mobility services to their company needs.”
Sam adds: “Europcar Advantage provides access to brand new cars and vans – for three months or more – which means firms don’t need to make commitments for the long-term. It’s a flexible solution to business mobility. Without the pressure of upfront costs and a choice of contract lengths, ranging from a minimum of three to 12 months plus, firms get all the benefits they need to offer staff access to the latest models and stay in control of their costs.”
Duncan agrees that journeys should be investigated in more depth before deciding on the mode of transport. He says: “The first change I’d recommend is to start by considering the purpose of the journey first rather than starting with the medium – a car or van for example.
“By focusing on the ‘why’ first it becomes easier to decide on the most appropriate ‘how’. Are you moving people, or things? Is your journey short or long? Are there any alternative ways to remove or reduce the journey?
“The second thought is then a focus and understanding of costs vs obligation. For example, an SME might encourage employees to uses their own car for occasional company use, claiming back a mileage allowance. But the same duty of care requirements apply as they would to a company car driver but you have no control over the roadworthiness of that vehicle and therefore the drivers safety? A mobility alternative such as an on-demand car share scheme or a daily rental might not work out that much more expensive but would give you full control over your duty of care responsibilities.” L