For light-duty fleets, the model is well developed: a fleet buys or leases a vehicle and assigns it to a driver.
But as COVID-19 has put into focus, other emerging models may meet the realities of today and beyond. These models can be broadly categorized as “vehicle sharing,” which means different things to different fleets based on their operational needs.
The Vehicle-Sharing Environment
Vehicle sharing encompasses a range of mobility-on-demand services, including vehicles that can be picked up throughout a city and used for a short time, ride-hailing services, and even traditional short- or long-term rentals.
For government fleets, vehicle sharing via motor pools has been a longstanding means to maximize limited resources and the limited vehicle needs of employees on a daily basis.
In short, the vehicle-sharing models are available now. What varies is how fleets are applying them now and into in the future. And determining the right model all comes down to data.
Measuring usage is one of the emerging tools in many telematics solutions. With it, fleet managers gain the type of insights they could only once guess at — which vehicle is being used the most and least.
The same is true with motor pool solutions. Instead of relying on inaccurate (or even ignored) paper sign-in and sign-out sheets, fleets can now accurately track when a vehicle is checked out and checked in.
With insights into usage, fleet managers can then determine not only how many vehicles are needed, but who in the organization must have them to do their jobs.
Meeting the New Business Reality
As the COVID-19 pandemic shows, the traditional means of doing business are changing. Working from home or relying on Zoom calls for “face-to-face” meetings are, in some cases, making fleets far less reliant on their vehicles to get the company’s work done or are changing the very nature of the fleet itself — rightsizing it or changing its composition to reflect a shifting mission.
Ultimately, the question facing fleets in today’s upended business environment: Does every employee who has access to a dedicated vehicle really need one? The answer isn’t an easy “yes” or “no.”
In high-density urban areas, it may be more practical to find alternatives to the traditional dedicated vehicle — including using rentals or ride-hailing services, or sharing a vehicle among several local employees. Paying by the minute or for just a few hours may allow a driver to get done while saving the company the added expense of an unnecessary vehicle. Likewise, having a single vehicle shared by two or more urban-based employees might add even greater flexibility with a reliable vehicle used in a way that maximizes return on investment (ROI) and total cost of ownership (TCO), while keeping the fleet right sized and costs under control.
However, because vehicles for sales staff and executives may be part of their compensation or a deal-making perk of the job, it may be difficult to shift to a shared model — at least in the short term.
There is one model popular in Europe, where ownership is lower and fleets rely on motor pools, that U.S. fleets could adopt. Drivers are charged for their personal use of the vehicle on weekends or for long non-work trips. This helps offset the cost of the vehicle for the fleet by sharing the cost with the employee.
This isn’t to say the days of the assigned or perk vehicle are gone, but with the changes in work culture and ever-increasing urban density, fleets may have to find alternatives to traditional vehicle uses to keep up with the needs of employees and modern business realities.
Be Willing to Experiment
As with any potential shift to a long-held traditional business practice, decisions to change an effective business model shouldn’t be taken lightly.
In addition to having data, fleet managers should be willing and encouraged to experiment with different models and approaches.
What many fleet managers will likely discover is a single approach doesn’t fit all situations. A blended solution designed to meet the needs of individual employees will be the answer.
Originally posted on Automotive Fleet