Going grey early - addressing grey fleet
21 September 2020
Author: Jack Carfrae
The spike in grey fleet could be the industry's biggest long-term issue resulting from the pandemic. Jack Carfrae asks why it is so rampant and how businesses should handle it.
You do not have to look far to see that grey fleet is on the rise. Our recent story which detailed Licence Check's 60% increase this year is one pretty glaring indicator - and that was before the pandemic.
Another barometer, albeit slightly less direct, is the DfT's figures on transport use during Covid-19. As of 10 August, private car usage was 90% of a normal week, while National Rail was 25% (provisional) after a confirmed high of 31% a week earlier, the London Underground was 28%, TfL buses 53% and other buses 39%.
Auction companies universally reported a surge in demand for older, cheaper cars shortly after lockdown. Valuation specialist CDL increased its prices of five-to-ten-year-old models by 5% in June, such was their popularity, and the move was widely credited to Joe Public seeking cheap and cheerful cars to dodge public transport.
Coronavirus has definitely been a catalyst for personal car use, but the first of those examples proves it is not single-handedly responsible for grey fleet's ubiquity. Electric vehicles aside, the government's still questionable stance on proportionately greater tax relief for cash allowance renders employee-owned vehicles a lucrative bypass for traditional company cars, so it is no wonder there are more of them.
We have often said that grey fleet is absolutely fine when it is well managed, and we stand by that, but the biggest problem is that standards are, to put it bluntly, frequently in the gutter, and much of the industry was starting from an extremely low base long before Covid-19 arrived.
A 2019 survey by Driving for Better Business (DfBB) quizzed 1,006 UK employees and 255 executive directors about their driving for work policies. Three quarters of the latter group said they ensured employees were aware of their legal obligations around driving for work - which means 25% didn't bother - and 60% of the same group were unsure if or how many employees used their own vehicle for business trips. DfBB says 90% of drivers do and one in three are not insured to. As for licences, 44% of the same execs said their organisations did not check that workers who use their personal car for business journeys had valid documentation.
Those things are even more likely to go unnoticed and unchecked this side of the pandemic. Overall business mileage may have dropped due to widespread home working and fewer physical interactions, but those exact aspects have created conditions in which grey fleet can thrive, leaving companies wide open to non-compliance.
"Let us say youhave got everybody working remotely and somebody's laptop fails," says Martin Evans, AFP board member and managing director of Jaama. "Somebody in the IT department needs to take round a new laptop. Historically, that character wouldn't need a company vehicle or wouldn't even have thought about driving their own.
"The IT director, or somebody who is ultimately responsible for that team, has never really thought about any of his employees needing to drive for business, and all of a sudden, they are."
Changes to contracts that define employees as based from home are an even bigger potential open goal, as DfBB campaign manager Simon Turner explains.
"If somebody suddenly has their contract changed so they are now classed as being based at home, any journey is a business journey," he says.
"Even if they are driving into the office, even if it us one or two days a week, that is now a business journey, so they are now grey fleet. That is not covered by private insurance and. the employer has got to make sure their staff are aware, because it is not always fair to assume they would even think about it."
Businesses often struggle to define exactly what constitutes grey fleet, and if that sounds like you then the Health and Safety Executive's Driving at Work document should clear it up.
Responsibility can be just as much, if not more, of an issue. Even if you know exactly what grey fleet is and that it exists in your organisation, it can really live up to its name when you try to pin its administration to an individual or a department.
"For a lot of fleet managers, grey fleet doesn't necessarily come under their remit," says Evans. "It comes under HR and other departments, so it is a bit flaky as to who is actually in charge of it."
The other big problem is the cost. Finance directors may well be consoling themselves with a reduction in claims for train tickets, but a study by fleet management firm Romex, which collated figures from The Miles Consultancy and Fleet Innovations, suggests around 25% of business mileage claims made against employees' own vehicles are either exaggerated or journeys are just flagrantly made up. Say the driver claims for 1,250 business miles in a month when they have actually covered 1,000; that means the business shells out an extra £112.50, which chalks up to £1,350 a year.
Despite its foibles, grey fleet is not difficult to expose, and according to Licence Check's general manager Terry Hiles, a straightforward audit is a good place to start.
"Carrying out an audit on their driver pool does two things: it tells them [the operator] whether they indeed have a problem. but also the size of it.
"You can just send out a questionnaire that you put together yourself and manage the results when they come back. Do you drive for business? - explain what driving for business means, because I don't think a lot of drivers actually have that explained to them - what are you driving? How often are you driving? Have you got business insurance? Do you carry out regular checks on the roadworthiness of the vehicle? You can either do that with something like an online questionnaire or, if you have got an intranet, you can do it that way."
If you lack the time to knock up an audit, there is no shortage of companies offering just such a service and other facilities to speed up the compliance process, and not all of them have a price tag. Most heavy-hitting leasing companies supply accompanying management systems, and the better ones - Ogilvie Fleet's Mifleet, a multiple Business Car Awards winner, is a good example - extend their reach to the likes of licence checking and risk, and grey fleet services. Look there first if any portion of your fleet is contract hire, as you may well have such functions at your fingertips for no extra cost. They will likely come with an invoice, but consultancy services from your existing leasing company may also be worth a look.
Still on the free side of things, we reported in our July issue that software and management specialist Fleetcheck added a 'back to work' section to its smartphone app, designed to ensure vehicles and drivers are fit for the road in the wake of extended spells of working from home. Existing users will already have it but it is available to all, at no charge, for the rest of 2020 as part of DfBB's 'Ready for the Road' package.
Onto paid products, fellow software and consultancy firm Fleet Operations has a risk management service that keeps tabs on the likes of licences, eye tests, mileage and telematics data, and generates a score to illustrate each driver's liability.
Jaama's Key2 management system has what is known as an electronic driver services module that tackles similar issues, and allows employees to upload and store documents, while its Myvehicle app helps with paper-free vehicle checks.
"Drivers can make a declaration on there and upload the relevant documentation, and that goes in its own little home within the product," says Evans. "They are not moving documents around from one folder to the next, it is straight into Key2 and then they can easily do a quick check of one thing or check all of the information. At least it is in the right place, all filed correctly and there are ticks in the boxes where the driver has declared that they have got things like the appropriate insurance."
Licence Check's Davis platform can conduct the aforementioned audits, among other services, as Hiles explains.
"It does an online driver audit, where you can send out electronic requests," he says. "That automatically collates and reports the results as they come in, and also risk scores the drivers based on their driving patterns.
"If you decide you then want to introduce something like licence checking on a grey fleet module, the data that has been collected can automatically be used to set up those services - but you can do it independently as well."
Rival compliance specialist Licence Bureau has a specific grey fleet management service built with the Health and Safety at Work Act in mind. It also does audits, and for those in need of further reading, its website contains a really good explanation of the legal side of grey fleet and a precise breakdown of the responsibilities foisted upon any business with drivers behind the wheel of their own cars.