Understanding Grey Fleets
With the increase of e-commerce, there has been a significant increase in the amount of grey fleet vehicles on the road. If you’re in a business which requires employees to be on the road at times in order to conduct their work, it is likely that you will be responsible for grey fleet drivers. Here, van lease specialists Northgate outlines everything you need to know about the grey fleet and some alternatives which you may benefit looking into at your business:
The grey fleet refers to any vehicles which are used for business travel but do not belong to the company in question. As a result, a grey fleet driver may be someone who uses a vehicle that was purchased via an employee ownership scheme, gets behind the wheel of a privately rented vehicle or simple uses a vehicle that is privately owned by the employee themselves.
Whatever the setup, these vehicles will be driven on company business — usually with fuel expenses covered or in return for a cash allowance — and so will see the responsibility fall under the employer.
The legal duty of employers with grey fleet drivers
Employers have to be aware of The Health and Safety at Work etc Act 1974 when it comes to having grey fleet drivers within their business as well. This is because the act underlines that it is the requirement of employers to ensure the health and safety of all employees while at work, so far as is reasonably practicable. It also stresses that employers and employees have a responsibility whenever they are engaging in work-related driving activities to ensure they are never putting others at risk.
In regards to the grey fleet scene, the Act means that an employer will have the same legal duty of care to be aware of for grey fleet drivers as they do for anyone who is behind the wheel of a work supplied vehicle.
For those who are unsure about how to go about grey fleet management at their organisation, British charity the Royal Society for the Prevention of Accidents (RoSPA) has an online service available which helps employers to ensure they are managing all of their legal grey fleet duties. Not only does the system enable organisations to record details like driving licence validity, insurance details including business use, MOT certification and road tax validity, but once recorded it can alert each relevant individual driver and line manager of dates when any of these items are up for renewal.
Facts & figures surrounding grey fleets
According to Lex Autolease’s annual Report on Motoring for 2016, it was estimated that there was close to 14 million grey fleet vehicles on the road across the UK. A report commissioned by the British Vehicle Rental and Leasing Association (BVRLA) titled Getting to grips with Grey Fleet has also suggested that employers across the nation are racking up a bill of around £5.5 billion each year to cover the grey fleet.
When it comes to grey fleet drivers when they are actually on the road, research by the Energy Saving Trust has highlighted that these vehicles are driven for a total of 12 billion miles a year — emitting 3.5 million tonnes of CO2 in the process.
John Webb, who is the principal consultant at Lex Autolease, was also keen to point out: “Worryingly, 22 per cent of fleet managers think there are no serious risks to the company from employees using their own cars for work. But driving is the most dangerous activity for most employees while at work and 62 per cent of private car use is for work-related activity, so duty of care, regardless of the vehicle’s ownership, should be a top priority.”
Figures such as those revealed above has also led to the BVRLA calling for bosses and policymakers to rein in the grey fleet, in that the trade body has set a target for these two parties to achieve a 50 per cent reduction in mileage and costs by 2020.
Alternatives to the grey fleet
Looking to reduce the number of grey fleet vehicles within your business? There’s a number of alternatives available for you and your employees to consider…
Salary sacrifice schemes
For those who use vehicles for business travel, a salary sacrifice scheme could be introduced. This would work in that businesses would give employees the chance to relinquish a part of their salary and in return receive the non-cash benefit of a new lease vehicle.
As well as this resulting in older vehicles being replaced with newer models which are less polluting and better maintained, David Hosking, the CEO of salary sacrifice market leaders Tusker, commented: “They … meet duty of care concerns and, by introducing mandatory licence checking and automatically providing business insurance, the schemes ensure that the company and its employees are fully covered.”
Vehicle rental services
Vehicle rental services allow employers to present their employees with brand-new vehicles on a flexible basis. This last point is underlined by the fact that vehicles can be delivered for the company to use for as little as an hour at a time or for a month or more.
Once an agreement is worked out, employers will be able to receive in-depth management reporting information so that they can monitor usage, as well as keep on top of vehicle emissions and any associated costs.
Another way to wave goodbye to the number of grey fleet vehicles at an organisation is to lower the business mileage threshold to which employees will be eligible to get behind the wheel of a company vehicle.
Lex Autolease’s principal consultant John Webb acknowledged: “This means that the business has more control, or at least some say, over the car that drivers have.”
However, Jon Burdekin, the head of consultancy services at business mobility provider Alphabet, was also keen to point out: “I wouldn’t say it is necessarily the most strategic way to manage your grey fleet.
“If you’ve got somebody who’s doing 10,000 business miles a year in their own car, then there is an argument to say they should have a company car because they are more than an occasional user. However, I wouldn’t say increasing the company car fleet is right. It is an option, of course. You can give every single employee a car, but it’s using a sledgehammer to crack a nut.”