The rapid growth of technology and the internet has meant that many businesses can slash costs and increase productivity with their internal systems. This can even apply to those out on the road. Mobile technology has come on with mobile internet, email, company portals and so on, as well as being able to keep in touch whilst on the move. Traditional fleets have also been looked at as potentially more expensive than they need to be, especially with the burden of ever increasing legislation, so it often makes more sense to “outsource” it.

But what is grey fleet?

A company fleet is owned by the company, a grey fleet is where the vehicles are owned by the drivers themselves. Many businesses are looking to outsource fleet requirements in order to save running costs. This is done using several methods, such as cash for car schemes – where an employee is given the money to go and purchase their own vehicle to be used for work, or owner/driver schemes where an employee may be paid an allowance for the use and upkeep of their own vehicle for business purposes.

So why have a grey fleet?

The large increase in legislation that came about recently is due to government targets concerning road safety. 20 years ago, there were fewer vehicles using Britain’s roads, but the accident fatality rate was much higher, and a large proportion of these were business drivers. To combat this, it was decided that the car used on business should be defined as a place of work and not merely transport to and from work. As a result, fleet vehicles became subject to health and safety employment law, and thus administering a fleet became a lot more complex and costly, to cover a company’s newly acquired liability to it’s driving employees.

Today the “office” can be truly mobile, so it’s not surprising that this has come to pass. Driving used to be down time as far as business was concerned, but now making a telephone call is seen as something simple, while submitting reports and accessing documents back at the office can be done remotely.

Having to take into account employment law in respect of people out on the road means a company has an obligation to put procedures and policy in place to be compliant with that law. Then it all has to administered and enforced which requires more man hours. Clearly, all this increases the complexity and therefore the money needed to keep a fleet on the road.

As an example, a business may require drivers to be of a certain standard. On all fleets there will be a variance amongst driver’s skills, and it’s usually the same few who have all the accidents. This points to further training for such drivers before they are given permission to drive on behalf of the company.

Also, there is going to be some administration required concerning driving licence checks, current MoT certificates and further safety checks, so that in the event of an accident, the company has evidence to show they haven’t been negligent in their duty of care.

And it’s worked: In 2009, there were more than 30m vehicles using Britain’s roads but only 2538 fatalities, down from nearly 6,000 in the early 90′s. Admittedly, some of this is down to the changes made in vehicle safety by the manufacturers, but where company fleets are concerned, vehicles are generally less than 3 years old and tend to be well maintained on lease contracts, plus safety checks are more stringent and carried out more often than a private vehicle would necessitate. Considering that in general, UK drivers are actually having more accidents than ever before, but far fewer fatal ones, it can be seen that the effect of legislation on fleets has had a major impact in helping reduce fatalities on UK roads.

It’s easy to see that there’s a lot of administration involved and how it all costs money, so this is why people look at farming a lot of it out to individual drivers, and letting them look after renewing consumables and servicing. The drawback is the duty of care stays with the employer, so some form of management is still needed. It’s not enough to take an employee’s word that their vehicle is adequately maintained, and that they regularly check their car over themselves. Most cars are lucky if they get this more than once a year and from the MoT inspector at that. Talking of which, grey fleet vehicles are on average at least 5 years old, and servicing is usually done cheaply at a local garage. With the duty of care still being pertinent, grey fleets still need written evidence to show legal compliance.

Furthermore, whenever an accident happens that causes a fatality, the Police will always initiate an investigation, which is more than simply checking a driver’s licence details, their MoT, and whether they had proper business car insurance or not, but much more background to the accident, such as the initial state of the vehicle, and the driver’s previous history and experience. This would almost certainly lead to an audit of your driving policies and fleet activity, as that’s where a lot of this information will be available, so even with a grey fleet, the need is still there to show you are legally compliant with current health and safety requirements. And it’s not just fatal accidents that can trigger an audit; there are all sorts of other situations and accidents where it might be necessary to provide your risk management and training records.

There are benefits though. Fleet insurance providers will often lower their premiums in response to a company demonstrating good risk management skills, meaning the company’s fleet policy involves analysing reports regularly to identify potential issues and further improve safety standards. In this way, some of the cost of running the fleet can be reclaimed, as the insurer considers the company a lower risk and prices accordingly.

So is outsourcing a fleet a good idea? Each business is different and for some it may be the ideal solution to switch to a grey fleet, but it’s not something that should be done blindly. As shown above, certain aspects can be outsourced but not as much as expected, and the responsibilities facing a business cannot be so easily dealt with. The duty of care remains with the company by law and can’t be ducked. This doesn’t mean a grey fleet won’t save money, but it does make the choice much less clear cut. A fleet kept inhouse actually enables a company to retain more control and reduce it’s liability.

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