A staggering 14 million cars and vans make up Britain’s ‘grey fleet’* – employees who use their own vehicles for business-related journeys and are reimbursed on a pence-per-mile basis. Between them they make up 40 per cent of all vehicles in the UK, covering 12 billion business miles each and every year.
It’s a situation that many companies allow to continue unchecked. But while it may seem convenient to turn a blind eye, the reality is that it comes with a whole host of issues that can pose big problems for any business.
The grey fleet has serious implications in terms of employee safety and employers’ duty of care. Then there’s the impact on the environment and the extra costs it can heap on companies.
It’s why it’s important to ask yourself if you’re managing your grey fleet as effectively as you should be.
What is a grey fleet?
‘Grey fleet’ refers to any vehicle that doesn’t belong to the company but is being used for business-related journeys.
- Vehicles privately owned by employees
- Vehicles purchased via an employee ownership scheme
- Privately rented vehicles
In return for using these vehicles for business travel, drivers receive a cash allowance or fuel expense, usually calculated on a pence-per-mile basis. Despite not being owned by the company, these vehicles still fall under the responsibility of the employer.
The risks of a grey fleet
The management of grey fleets can easily slip through the cracks in a company. If no one person is responsible for grey fleet drivers, employers are left in the dark on key issues that can have a big effect on the business’s bottom line:
- No central view of costs
- High pence-per-mile rates
- More cost effective alternatives such as pool cars
- Older cars built to older safety standards
- No record of MOT, servicing or tyre checks
- No checks on licences and insurance to cover business use
- Older, more polluting vehicles
- Lack of reporting for environmental reporting standards
Grey fleet management challenges
Getting to grips with your grey fleet isn’t always easy. Despite employers being bound by a statutory duty to care for employees while they’re at work, many struggle to do so while their staff are driving.
The problem is often a lack of resource and expertise, alongside the difficulties involved in monitoring vehicles that are not owned by the company.
With no record of MOTs, services or tyre checks and vehicles that are built to older safety standards, bosses are left facing a minefield when it comes to managing grey fleet vehicles and drivers.
The dangers of grey fleet non-compliance
The Health and Safety at Work Act requires employers to take responsibility for the health and safety of their employees while they’re at work and ensure they’re not put at risk.
It means you have the same duty of care for grey fleet drivers as you do for drivers using vehicles directly supplied by your business.
In the event of a grey fleet driver being involved in an accident there’s a burden on businesses to prove they have fulfilled their legal obligations. If they can’t, there can be serious legal, financial and reputational consequences.
Businesses could also face stiff tax penalties from the HMRC if they fail to keep accurate and complete mileage reimbursement records.
Take back control of the grey fleet
Effective management of your grey fleet starts with getting a clear picture of the costs, environmental impact and any health and safety issues.
Begin by getting a handle on data for the following:
- Your grey fleet drivers
- The vehicles they’re using
- The journeys they make
Next steps include:
- Getting a central view of expenses to help understand employee behaviour
- Putting proper administrative systems in place for monitoring grey fleet vehicles
- Setting mileage and emissions baselines
- Ensuring there’s an alternative in place for employees travelling over a set number of miles
- Identifying vehicles that don’t meet safety requirements or represent your business in the way you would like them to
- Providing driver training to high mileage grey fleet drivers
Once you have the data you can then make informed decisions about the way forward. Options could include:
- Salary sacrifice for car scheme
- Company cars
- Flexible rental
- Short term hire
- Pool cars
- Car sharing
- Public transport
- Teleconferencing / Skype meetings
LeasePlan can help you get to grips with your grey fleet in a number of ways:
- Demonstrating good practice across a range of sectors and industry benchmarking
- Providing checklists and grey fleet policy templates
- Assisting with licence checking
- Producing fleet audits that give you with the overview you need to make the right decisions for your business
Want to find out how more about taking control of your grey fleet? Download our guide now.
Source: 14 million cars and vans make up Britain’s grey fleet from BVRLA / EST Report ‘Getting to Grips with Grey Fleet’