A darker shade of grey

Date: 26 April 2017   |   Author: Jack Carfrae

Grey fleet is the industry's black dog. Much has been said and written about how it should be wiped off the books or, at the very least, cut right down, but if it's well managed, it can make sense for a lot of businesses.

The public sector is often slated for letting employees loose in their own vehicles. However, if you're managing the fleet for, say, an NHS trust with a four-figure staff count, it's hardly practical to offer each and every individual a company car. Get a proper, watertight system in place, and for employees who make the odd, low-mileage business trip, their own car should be fine - assuming it's roadworthy and everything checks out. 

 Grey fleet seems to go wrong when it's relied upon too heavily. When it becomes the sole method for an employee whose main purpose is driving, it's costly, tricky to manage and a difficult situation in which to remain compliant. It stands to reason, then, that a delivery company wouldn't touch it with a bargepole, but there is a growing trend among big logistics firms to outsource work to short-term grey-fleet drivers, some of which operate on a relatively informal and unmonitored basis.

The run-up to Christmas is a particularly pertinent time, with staff typically drafted in short term, to help soak up the festive burden. We'd stress again that, done properly and in moderation, grey fleet can be fine, but the more casual the operation, the greater the margin for error, and some have identified delivery drivers operating in this fashion as a real problem.

"It's certainly a growing issue in the UK because of the increasing volume of retail activity online," says Duncan Pickering, market development manager at safety charity IAM Roadsmart. "The DHLs and DPDs of this world - very big companies - there's only a certain amount of expansion they can do at any one time in terms of getting in professional drivers. There is a general driver shortage in the light commercial vehicle, and certainly the heavy commercial vehicle, market, so they are having to turn to the likes of the grey fleet driver - somebody with their own vehicle, who is able to deliver however many parcels in a day - to meet the demands of the customer.

"It does raise some issues around driving for work. Primarily, the act of driving is that job, so are all measures regarding health and safety and risk management being taken? I'm not sure they are in all cases." It isn't just individual, self-employed drivers either; agencies have also been caught in the conundrum, with stark reminders that companies retain a level of responsibility for their outsourced activities. In March, the Health and Safety Executive (HSE) announced it had issued the Ministry of Defence (MoD) with a Crown Censure, after Graham Wood, an agency driver working for the MoD, was killed by a reversing vehicle while delivering goods to a holding area in MoD Kineton, Warwickshire, in November 2013.

Following its investigation, the HSE said the MoD had failed to assess the risks of manoeuvring large vehicles in the area; it has since introduced marked parking bays, pedestrian walkways and a one-way system in an attempt to curb such incidents.
In a statement following the ruling, Jane Lassey, deputy director of field operations for the HSE, said: "Like any other employer, the MoD has a responsibility to reduce dangers to agency workers, as well as their own employees, on their sites as far as they properly can, and in this case, they failed Graham Wood."

Amazon and its subcontractors have come under fire on numerous occasions for working practices surrounding delivery drivers. A BBC investigation in November 2016 claimed the internet giant's agency staff regularly worked for more than the legal number of hours and for less than the national minimum wage. An undercover reporter alleged some drivers were issued with targets of up to 200 deliveries a day, which engendered practices such as speeding, flouting breaks and accidents. According to the BBC, Amazon Logistics requires agency drivers to be self-employed.

As part of this article, BusinessCar attempted to secure interviews with six well-known logistics firms to discuss the practice of hiring short-term delivery drivers, five of which refused. Both Amazon and DHL declined an interview; when asked why, neither firm responded. We contacted Hermes twice and both requests were ignored. DX responded to our second request and a press representative said "we'll see what we can do", but we heard nothing more. DPD's press representative said "we really don't do that much with temporary drivers" and declined a further request for comment on the grounds that the issue "isn't that relevant [to the company]".

Yodel was the only major delivery company we approached that agreed to comment; it declined an interview, but issued written statements in response to pre-prepared questions via email, over a period of 20 days. In its initial statement, it said: "We operate a mixed workforce model, which allows us to be flexible during busy periods, such as in the run-up to Christmas. Outside of this period, our total workforce is 10,300 and we create an additional 3,500 roles in the run-up to the seasonal period. These jobs are a mix of employed (approx. 40%), self-employed (approx. 40%) and agency (approx. 20%) workers.

"Self-employed drivers supply their own vehicles, and all driver documents, including insurance, are checked before they are hired. Our couriers deliver smaller parcels within their own neighbourhood, using their own cars." We quizzed Yodel about its policies for self-employed drivers and what it describes as "couriers". In its second statement, the company said it conducts a "one-day requirement check" on self-employed van drivers (but not couriers), which includes a physical inspection of the vehicle. It added that, in each instance, it checks all relevant documents and carries out "regular compliance checks in relation to insurance and MoT".

It said couriers are automatically signed up to a "third-party insurance top-up scheme" that covers "third-party accident damage only, whilst performing services on behalf of Yodel". Employees pay £3 per week for this cover, but the company said it is trialling a new model that would see it provide complimentary insurance for couriers.  

However, Yodel admitted that it never physically sees, nor does it check, couriers' vehicles: "Compared to our van drivers, couriers carry a much smaller number of lightweight parcels. therefore we do not carry out individual vehicle checks."

BusinessCar asked fleet authorities if the practice of checking documents but not vehicles is sufficient for grey delivery fleets. "Absolutely not," says Mark Cartwright, head of vans at the Freight Transport Association. "I know from conversations we have had with various police forces that they have recognised that self-employed courier fleets are probably not a bad place to start looking for unroadworthy vehicles."

"It's the grey ones where it's a case of 'just take those parcels round locally' and they're driving a 25-year-old Nissan Sunny," adds John Pryor, chairman of the Association of Car Fleet Operators (ACFO). "That's where the problem is. "They are delivering to home addresses, where there will be children and pedestrians. It's not up and down motorways; this is local stuff, on local roads. Then you might be looking at older vehicles with Euro2 or Euro3 diesel engines; you are putting that in a urban environment, and we now see low-emission zones [imminent in five UK cities outside London].

"Some older cars won't meet those standards, so additional costs will appear in time. I don't think vehicles must be a certain age, but you would look at your environmental and safety policies and ask 'why would we want a 25-year-old car?'" It's almost impossible to put a number to the total of short-term, grey fleet delivery vehicles on UK roads, but given that Yodel creates an additional 3,500 roles for the festive period, an overall parc of five figures seems likely during peak times. Anecdotally, IAM Roadsmart's Pickering estimates it to be "in the tens of thousands, certainly pre-Christmas, but there are probably peaks and troughs".

He continues: "Some companies operate a piece wage, so for every parcel you deliver, you get quite a small amount of money, and the more you do, the more realistic a wage you take home. Some of these delivery companies are under so much pressure that, really, is there somebody able to check a grey fleet vehicle thoroughly? That it's fit for the load, that the driver is healthy?

"It sounds sensationalist, but there are checks that should be carried out by any company that's operating a fleet of vehicles, and this is why grey fleet has to be treated in the same way that company vehicles are treated; health and safety dictates that. The issue is that companies are either ignorant and not realising that, or they do realise and think, 'we simply don't have the capacity to deal with it, we're just going to take the risk and hope nothing happens'."

The practice of outsourcing logistics to agencies, self-employed drivers or otherwise is part of the issue, as ACFO's Pryor explains: "It's to do with how many lines the delivery goes down. This one's outsourced to that one, who's outsourced it to somebody else, and the line gets very, very thin."

Either way, the company dishing out the orders retains a degree of responsibility, so while the work may have been handled by a subcontractor, there is still an onus on the original firm. Julie Docherty, external training manager at the Advisory, Conciliation and Arbitration Service (Acas), explains the relationship between the original company, agency workers and the self-employed: "If you are employing staff through an agency then different rights apply [to conventional employment] and they are set out in the Agency Worker Regulations.

There's a three-way agreement between the temporary work agency, the employer - known as the hirer - and the individual. The hirer has a relationship with the agency and the agency has a contract with the worker, but obviously, while the individual is working for the hirer, it is, to a certain extent, dictating what work they do."

The Acas website says the regulations offer agency workers "the entitlement to the same or no less favourable treatment as comparable employees with respect to basic employment and working conditions", though Docherty claims the rules do not apply to "the genuinely self-employed" - i.e. those dictating their own hours and rates.

However, the categories into which employees are lumped are grey areas in themselves, and sometimes only truly defined during legal action. "As with a lot of things in employment law, it's never completely straightforward," says Docherty. "Recently, there was the Uber case where, ostensibly, Uber was using self-employed drivers to do taxiing work, but the tribunal decided that, in fact, they weren't self-employed, they were actually workers, which meant they had certain employment rights like national minimum wage, holiday pay and things like that.

So even if the employer says the relationship is self-employed, sometimes, when the courts look at the actual relationship, they might decide that it's something else. "It would be up to a court to decide where the responsibility lies with delivery companies and drivers. They would look at the documentation, but they may well also look at the general duty of care an employer has, and whether or not the waiver that the individual has signed is enough for the company no longer to have responsibility."  

If we're to see an improvement, the companies outsourcing their deliveries need to be more clued up and keep a closer eye on external operations. ACFO's Pryor explains: "It's getting companies to realise that, although they can outsource their parcel delivery, they still have a moral responsibility and a liability for what is being done in their name. We saw this with Sports Direct, where supposedly their systems and warehouses were outsourced - and it's the same thing - people need to sit up. The outsourcers: have they got a process in place and can they monitor the companies they are paying to manage their processes for them?"
"I get the dilemma the delivery companies find themselves in," says the FTA's Cartwright. "They privately recognise that they've got a challenge because, during the slower periods, they can't sustain the fleet size they need to meet the peak periods. That means that they have to use grey fleets to meet those requirements.

"Sooner or later, somebody is going to have to bite the bullet, whether that means turning work down or investing in a larger, managed fleet. Bottom line is, we would remind grey fleet operators of their legal and ethical responsibilities; they do and should have a strong corporate responsibility. They shouldn't be hiding, deliberately or not deliberately, behind the arm's length of the 'they were a contractor working for a contractor' routine, because they are in a very unique and privileged position of being able to influence the behaviours of these drivers, and of these contracting firms. The law of the land still applies."

Despite pointing out that grey fleet delivery vans can be obvious culprits for being poorly maintained or unroadworthy, Cartwright believes the authorities are not clamping down hard enough. "There are lots of laws about the way vans are operated. Sadly, we don't see them being enforced as strongly and as vigorously as they should be, and we would challenge the enforcement agencies to step up. That's the only thing, really, that will get the message home to the more dubious operators of grey fleets. If they knew there was a fair chance they were going to get pulled over, they'd buck the standards up."

Certain firms' alleged malpractice isn't likely to disappear overnight, but it is coming under closer scrutiny. The Government launched the six-month Taylor review on modern employment practices in November 2016. Headed by chief executive of the Royal Society of Arts, Matthew Taylor, it is an examination of recent business models and how associated processes may need to change.

According to the Government, the review will, among other areas, target the 'gig' industry: "short-term, casual work that is increasingly sought by people through mobile phone apps when they want to work. These roles can include driving, delivering items and DIY tasks."

However, working practices aren't the only thing that needs to change if ambiguous grey fleet deliveries are to improve. "I do think there is a kind of socioeconomic thing with this," says Cartwright. "Frankly, as members of the public, if we're expecting stuff to be delivered immediately, for next to nothing, then we shouldn't be at all surprised that we get the standard we pay for."

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