Here’s a question. Are company cars really a ‘waste of time’ and ‘a luxury we simply cannot afford anymore’?
For that is how they were recently described by no less an authority than Peter Cooke, professor of automotive management at the University of Buckingham.
Of course, one suspects that Peter, whose close involvement in the industry goes back to the days when the Ford Capri was just a gleam in its designer’s eye, was being ever so slightly provocative.
But he has a point when he says that the vast majority of company car journeys are relatively short and relatively infrequent. Well, many business journeys are – we mustn’t forget that virtually all company cars are used every day for commuting and private travel as well.
The key thing about company cars is that their usefulness goes well beyond the number of business miles they cover. They are there to attract, reward and motivate talented people.
But does the professor also have a point about productivity? Should fleets be paying more attention to how intensively they are utilised?
After all, this is Austerity Britain; ‘efficiency’ is the new ‘growth’ and businesses are starting to look for ways to put more bums on their car fleets’ existing seats.
Take a driver who covers 10,000 business miles a year, which is a common threshold for allocating job-need company cars. On average, they spend less than 15% of their working week behind the wheel.
For the other 85% of the time their car will be sitting around empty, prompting an increasing number of people, including Peter Cooke, to suggest that it might be more cost-effective to give everyone hire cars or pool cars.
But when it comes to the employee’s productivity at work, the hours they don’t spend in the car are the ones that really count.
And while they are working away from base, there’s no magic way for the business to find another use for their car.
Moreover, asking the employee to spend time booking hire cars, picking them up or waiting for the rental company to deliver and collect them would leave correspondingly less time for their real work.
So giving company cars to people who drive a lot definitely isn’t a waste of time. As for being a ‘luxury’, what about the average private car, which spends a massive 97% of its life doing precisely nothing?
In any case, ‘utilisation rates’ of traditional company cars will never approach those of vans because the productivity of their drivers is measured differently.
Of course, that still leaves the ‘sleeping fleet’ – the pure perk cars that spend every day in the company car park.
One day their drivers might consent to them becoming ‘multi-user travel assets’ for their colleagues during working hours – but I suspect that that’s a cultural bridge most companies will be in no hurry to try to cross.
Peter Cooke described the growth of short-term hire and car clubs as “improving the options for those looking for an alternative to leasing”.
Sure, short-term hire and car clubs do have a role to play. But neither alternative necessarily feels as luxurious, nor delivers the loyalty bonus that employers enjoy with company cars.
And, as I mentioned earlier, it is likely to be more time-consuming for employees to use hire cars or local car clubs (if one is available) for relatively short trips than to jump into a convenient company vehicle.
In any case, car clubs and leasing are not necessarily opposed alternatives.
There’s no reason why leased vehicles shouldn’t be used in corporate car-sharing situations. In fact, unlike daily rental, if one uses dedicated leased cars as shared mobility assets it opens up a variety of new opportunities to address the challenges of rising fuel and operating costs.
GPS, telematics and smartphone apps mean that fully remote administration of fleet cars is now a reality – and with it the opportunity to enhance the utilisation of some cars through a new multi-user model that runs alongside the traditional one driver, one car, one key company car model.
The great strength of the company is not only its ability to adapt but also its capacity to assimilate and improve upon important emerging niches such as car clubs.
Today’s company car is becoming tomorrow’s versatile mobility solution: certainly not a waste of time and absolutely not a luxury that companies can no longer afford!
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