Is it time for employers to move away from grey fleet cars, vans and LCVs?

grey fleet

Grey fleet vehicles are a major part of business and there are now millions of grey fleet drivers on UK roads. But today, it seems the tide is turning on the grey fleet trend. From safety and legal risks, to their negative effect on the environment and company finances, there are several facts you should know about if you are involved with grey fleets.

What are grey fleets?

Grey fleet drivers are employees using a vehicle for work proposes that is not owned by their employer. Grey fleet vehicles replace other work-related travel methods, such as company cars or vehicle hire, and essentially fall into one of the following categories:

  • Vehicle purchased via an employee ownership scheme.
  • Personal car/van/LCV/etc. owned by the employee of a company.
  • Privately-leased vehicle used by a worker for business reasons/during working hours.

What is the problem with grey fleets?

Grey fleets are used by many companies across the UK, and can benefit employers to a certain extent. However, there are several reasons to believe that moving away from grey fleets can boost efficiency, save money, help the environment, and slash the chance of unwanted legal action.

Cost

Last year, a report commissioned by the British Vehicle Rental and Leasing Association (BVRLA) found that businesses in the UK pay around £5.5 billion per year on grey fleets. The drawback of grey fleets is that, if you are an employer asking your employee to drive their own car or van for business reasons, you are expected to pay their fuel costs. Usually, reimbursement rates are higher than other methods of transportation, so businesses are possibly spending more than necessary purely because they chose grey fleet vehicles over rental or company-owned motors.

Of course, local business travel should not put too much of a financial strain on businesses. However, driving very long distances, particularly if you need multiple employees to carry out a journey several times a month, can rack up huge costs. Alternatively, van leasing or renting an LCV to transport multiple staff or work-related goods is a great way to reduce the cost of sending the same group for business meetings via more than one vehicle.

Safety

Safety is another reason companies should consider steering away from grey fleets. If vehicles used for business travel are private, the company has little involvement in the maintenance or safety checks of a motor that they are responsible for in the case of an accident.

A recent report surveying more than 2,000 grey fleet drivers in the UK and Europe found that 43% did not carry out frequent maintenance checks. Worryingly, employees could be driving vehicles unsuitable for the road and cause an accident during a business trip. Considering employers are completely responsible for grey fleet cars, this poses a dilemma for many companies.

Renting vans with multiple seats or larger vehicles built for transporting work-related equipment needed for business is far safer than using a car not designed for these purposes. Also, using a single company car for all staff can lower the chance of having an accident, since one vehicle is used rather than multiple per business trip.

Legal issues

As we mentioned earlier, employers are entirely responsible for grey fleet vehicles, which is why it can be detrimental to a firm if an accident occurs. According to recent research, there are approximately 24,000 grey fleet drivers operating vehicles illegally in the UK, which can include employees with only provisional licences, revoked licenses and invalid insurances.

The enactment of the Corporate Manslaughter and Corporate Homicide Act 2007 means that employers today have the same level of legal duty for grey fleet drivers as they have for employees driving company cars. Although both employer and employee have joint responsibility in ensuring others are not put at risk during grey fleet journeys, this is still a hefty burden that could be avoided using alternatives to grey fleets.

Lack of oversight

There are around five million grey fleet vehicles on the road in the UK, according to the Licence Bureau, and keeping track of grey fleets is key to managing it effectively and reducing the risk involved. If a company has multiple grey fleet drivers and vehicles, it is difficult to monitor licence, insurance and MOT validity, which can increase the safety and legal risks we looked at earlier.

Realistically, businesses with grey fleet vehicles need an online system in place and someone to monitor it, even if this puts a strain on manpower and resources. However, reducing or eliminating grey fleets and opting for van leasing, company cars or switching to video conferences (if the travel is for a business meeting) removes this responsibility and could work out better for some companies.

Insurance problems

Working out what insurance a grey fleet driver needs and making sure it is in place is another task sometimes overlooked by grey fleet companies. If an employee is driving their own car for business proposes, an employer needs business motor insurance (as often standard private vehicle policies will not cover these types of trips).

From asking employees to visit multiple business sites in one day, to asking them to run an errand to a bank, there are several scenarios when an employee might perform a journey not covered by their own insurance. What is more, there are various business insurances available to confuse the matter, which makes selecting the right one for each grey fleet driver on a company’s payroll even more difficult.

Of course, insurance companies look at every detail. So, using vans and LCVs of the correct size for any goods and number of staff needed on a business journey is essential for full coverage.

Eco-friendliness

With the heavy crackdown on CO2 emissions and a commitment to reducing corporate carbon footprints, maintaining an eco-friendly stance is essential in business today. Unfortunately, grey fleets are generally considered bad for the environment.

The BVRLA found that the average grey fleet car was 8.3 years old and emitted 152/km CO2. While, according to Energy Saving Trust, grey fleet motorists drive more than 10 billion miles every year in the UK, creating 3.5 million tonnes of CO2.

Swapping typically older grey fleet cars for new van leases or car rentals gives you the opportunity to hire an up-to-date vehicle — fully checked and insured — with a reduced negative impact on the environment.

Grey fleet alternatives

Car and van leasing

Find a decent vehicle hire firm that lets you lease cars, vans, LCVs, and larger motors for a range of durations. Many can provide long term van hire for more than month at a time, as well as cars for just an hour or so.

Video conferences

Using phones and computers to hold meetings is quick and simple if it is not essential that employees are there in person.

Company cars

Granted that there is enough staff to make it efficient, buying company-owned cars for employees to use is another decent alternative.

Grey fleet management systems

If it is a must to have grey fleet vehicles, implement a decent online management system to keep an eye on licences, insurance, car maintenance, and mileage.

For more information: www.northgatevehiclehire.co.uk

Sources:

www.licencebureau.co.uk/owner-drivers/

www.rospaworkplacesafety.com/2013/05/28/grey-fleet-management-guide-keeping-your-drivers-on-the-right-track-2/

www.thehrdirector.com/features/employment-law/grey-fleet-is-a-grey-area/

www.bvrla.co.uk/advice/guidance/grey-fleet

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