Learning More About Grey Fleets

by  |  On September 18th, 2017  |  In Tips & Guides

Many businesses that require employees to be on the road at times are responsible for grey fleet drivers. Northgate, van lease specialists provide us with some insight into the grey fleet and some alternatives which may benefit businesses:

What is the grey fleet?

The grey fleet is any vehicle that does not belong to a company but it used for company travel. 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 simply uses a vehicle that is privately owned by the employee themselves.

Learning More About Grey Fleets

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Used in a variety of situations, these vehicles are driven on company business with their fuel expenses covered or in return for a cash allowance. The employer is therefore still in charge of them.

The legalities:

One legal aspect that employers must be aware of if they have grey fleet drivers is The Health and Safety at Work etc Act 1974. 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.

Specific to grey fleets, the Act means that the employer has the same level of responsibility for grey fleet drivers as they do for all of their other employees.

This online service has been created by the Royal Society for the Prevention of Accidents (RoSPA) and is available for employers that are unsure about how to manage their grey fleet. 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.

Grey fleet statistics:

In 2016, figures from Lex Autolease’s annual Report on Motoring showed that there were around 14 million grey fleet drivers on the roads in 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.

Further research carried out by the Energy Saving Trust revealed that grey fleet vehicles are driven for a total of 12 billion miles per year. From these miles, they release 3.5 million tonnes of CO2.

A statement from John Webb, the principal consultant at Lex Autolease says: “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.”

The British Vehicle Rental and Leasing Association have suggested to employers and policymakers that the number of grey fleet drivers should be decreased. The trade body has set a target for these two parties to achieve a 50 per cent reduction in mileage and costs by 2020.

What to use instead of the grey fleet?

To decrease the number of grey fleet vehicles within your business, there are a number of alternatives that are available…

Salary sacrificing:

This scheme would see businesses giving employees the chance to relinquish part of their salary and in return receive the non-cash benefit of a new lease vehicle.

This has been designed to see older vehicles come off the roads and be replaced with newer models which are generally 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.”

Renting vehicles:

This scheme would work in that employers would present their drivers with new vehicles. This would be done on a flexible basis in that the vehicles can be delivered for the company to use for as little as one hour at a time or as much as a month.

Once an arrangement has been made between the vehicle hire company and the employer, the business will be offered management reporting information. This is useful to the employer as they can monitor usage, vehicle emissions and costs.

Offering company vehicles:

One way to introduce more company vehicles into an organisation is to decrease the business mileage threshold that allows employees to be entitled to a company car.

This idea has caused some controversy. 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, said: “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.”

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