Getting a grip on grey fleets
When businesses require employees to be on the roads in order to conduct their work, there is a chance that they will be responsible for grey fleet drivers. Here, van lease specialists Northgate, outlines everything you need to know about the grey fleet and some alternatives which you may benefit from looking into at your business:
What are grey fleet?
When vehicles are used for business travel but are not owned by the company that uses them, the fleet is referred to as a grey fleet. As a result, a grey fleet driver may be someone who uses a vehicle that was purchased via an employee ownership scheme, gets behind the wheel of a privately rented vehicle or simple uses a vehicle that is privately owned by the employee themselves.
Vehicles are driven for a company’s business purposes – whereby, in most cases, fuel expenses will be covered or a cash allowance paid in return, to which the employer has that responsibility.
An employer’s legal duty
The Health and Safety at Work etc Act 1974 is something all employers operating with grey fleet drivers must be aware of. This is because the act underlines that it is the requirement of employers to ensure the health and safety of all employees while at work, so far as is reasonably practicable. It also stresses that employers and employees have a responsibility whenever they are engaging in work-related driving activities to ensure they are never putting others at risk.
The Act outlines that an employer will have the same legal duty of care to be aware of for grey fleet drivers as they do for anyone who is behind the wheel of a work supplied vehicle.
British charity the Royal Society for the Prevention of Accidents (RoSPA) has this online service available which helps employers to ensure they are managing all of their legal grey fleet duties. Not only does the system enable organisations to record details like driving licence validity, insurance details including business use, MOT certification and road tax validity, but once recorded it can alert each relevant individual driver and line manager of dates when any of these items are up for renewal.
The facts
It was estimated that there was close to 14 million grey fleet vehicles on the road across the UK, according to Lex Autolease’s annual Report on Motoring for 2016. A report commissioned by the British Vehicle Rental and Leasing Association (BVRLA) titled Getting to grips with Grey Fleet has also suggested that employers across the nation are racking up a bill of around £5.5 billion each year to cover the grey fleet.
Research by the Energy Saving Trust has highlighted that these vehicles are driven for a total of 12 billion miles a year — emitting 3.5 million tonnes of CO2 in the process.
John Webb, who is the principal consultant at Lex Autolease, was also keen to point out: “Worryingly, 22 per cent of fleet managers think there are no serious risks to the company from employees using their own cars for work. But driving is the most dangerous activity for most employees while at work and 62 per cent of private car use is for work-related activity, so duty of care, regardless of the vehicle’s ownership, should be a top priority.”
The BVRLA are calling for bosses and policymakers to rein in the grey fleet, as the trade body has set a target for these two parties to achieve a 50 per cent reduction in mileage and costs by 2020.
What alternatives are available?
If you are looking to reduce the number of grey fleet vehicles within your business, you’ll be please to know there are a number of alternatives available for you and your employees that you could consider…
Salary sacrifice schemes
Some employers could introduce a salary sacrifice scheme amongst the workforce, for those who use vehicles for business travel. This would work in that businesses would give employees the chance to relinquish a part of their salary and in return receive the non-cash benefit of a new lease vehicle.
Whilst this alternative replaces older models with newer models which are less polluting and better maintained, David Hosking, the CEO of salary sacrifice market leaders Tusker, commented: “They … meet duty of care concerns and, by introducing mandatory licence checking and automatically providing business insurance, the schemes ensure that the company and its employees are fully covered.”
Vehicle rental services
You can rent brand-new vehicles on a flexible basis with vehicle rental services. Vehicles can be delivered for the company to use for as little as an hour at a time or for a month or more.
Usage can be monitored once an agreement is worked out, as employers will be able to receive in-depth management reporting information, as well as keep on top of vehicle emissions and any associated costs.
Company vehicles
Lowering the business mileage threshold will result in your employees being eligible to get behind the wheel of a company vehicle.
Lex Autolease’s principal consultant John Webb acknowledged: “This means that the business has more control, or at least some say, over the car that drivers have.”
However, Jon Burdekin, the head of consultancy services at business mobility provider Alphabet, was also keen to point out: “I wouldn’t say it is necessarily the most strategic way to manage your grey fleet.
“If you’ve got somebody who’s doing 10,000 business miles a year in their own car, then there is an argument to say they should have a company car because they are more than an occasional user. However, I wouldn’t say increasing the company car fleet is right. It is an option, of course. You can give every single employee a car, but it’s using a sledgehammer to crack a nut.”