Ten tips to better manage your gray fleet

If you think the Gray Fleet is a bunch of pirates game of Thrones, you’re not just wrong: you’re in the wrong business. All fleet managers should be familiar with the concept, which has become widespread since the pandemic. But how exactly do you optimize gray fleet management? Here are 10 essential tips…

Do you want to be a better fleet manager? Why not learn from the best in the Fleet Europe Summit 2022, November 16-17 in Dublin (in the photo).

A quick reminder for those too embarrassed to ask: ‘grey fleet’ is the term for employees who use their private vehicle to work, a practice typically reimbursed by the employer, and which creates all kinds of obligations, both moral and legal, in terms of obligation of care. Gray fleets also complicate fleet and mobility policy management towards health and safety, cost savings and the environment.

Gray fleets have been trending for years, as a way for companies to cut back on their own fleets; and as an element in the broader diversification of corporate mobility options. The pandemic has only fueled gray fleets, as people avoid shared or pooled vehicles for fear of infection.

As a quick indication of how widespread gray fleets are: even before the pandemic, 40% of work vehicles in the UK were gray fleets, totaling 14 million vehicles. Put another way, it was estimated that 62% of private car use was for work-related activities. While gray fleets may not be as widespread elsewhere, it’s safe to say the phenomenon is popular across Europe and growing.

After corona, economic necessity is pushing many companies to opt for gray fleets instead of owned or leased fleets. But while the cost factor of gray fleets may be obvious, the full implications of the practice are often less so. And that’s important, because those implications come with sets of responsibilities and sometimes costs of their own. Therefore, it is useful to review some key aspects.

1. Know your gray fleet

Good management begins with good measurement. But the gray fleets are harder to count than the more traditional ones. For example, gray fleets also include vehicles that are only occasionally used for work. And also employee vehicles used for business purposes that are rented or leased rather than owned.

And you should do more than count. On average, gray fleets are older than standard company fleets. Working with older models has implications for safety and emission levels, among other things.

2. There are no ‘grey’ standards

However, working with an older and more challenging group of vehicles does not mean that your company should lower its standards. You can still restrict certain types or ages of vehicles to keep up with general safety, efficiency, and emissions standards.

And also…reputation. Whether it is a gray fleet or not, the vehicles your employees drive are part of the image your brand projects. In short, your drivers need to make sure their vehicles are “fit for purpose,” but it’s up to the company to choose exactly what that “fit for purpose” is.

3. Develop a tailored policy

Develop as part of your overall fleet and mobility policy a set of guidelines designed specifically for gray fleets. Guidelines determining when the gray fleet principle can be used and when not. How drivers will be supported and what they need to take care of themselves. How they will be reimbursed and what are the limits and alternatives. And make sure the policy is successfully communicated to all drivers who use their own vehicles for work (and those who may in the future).

4. Check the documentation

Make gray fleet reimbursements contingent on obtaining proper driver and vehicle documentation (driver’s license, proof of inspection, maintenance record, insurance, etc.) and regularly reviewing these documents, e.g. , once a year. This will help fleet and mobility managers assess the fitness to drive of both the vehicle and the driver.

5. Check the alternatives…

Don’t just reimburse your employees for the miles they drive to work. Make sure that the use of the gray fleet is the most suitable for the purpose it serves. Other mobility alternatives (public transport, micromobility, a mobility budget) may be safer, faster and/or more profitable.

Above a certain mileage, gray fleets can be more expensive than leased cars, or even rental cars, greatly defeating the purpose of having a gray fleet. This is where a telematics solution would be useful to track the movements of the gray fleet and analyze the effectiveness of the trips.

6. … and offer them

Gray fleets are often at risk of becoming a ‘default’ solution that continues because it is convenient, not necessarily because it is the most effective. That is why fleet and mobility managers must go the extra mile to offer those mobility alternatives, as long as they are more effective in terms of cost, time, emissions, and preferably all of the above.

7. Provide driver training…

In most companies, driving is the most dangerous activity performed by employees. Therefore, driver training makes sense in all circumstances. But there are certain safety aspects of gray fleets that require specific attention in driver training. This is due to the fact that companies require certain driving behaviors from their employees, which they cannot require on their own time. Since gray fleet drivers use their own vehicle for work, that line can get blurry.

Therefore, it is important to stress to gray fleet drivers that company policy on the use of mobile phones, speeding, taking breaks, incident and accident management and other aspects of safe driving and responsible apply to them when they drive their own car to work.

8. … and security inspections

Fleet and mobility managers should encourage their gray fleet drivers to do their job as vehicle owners and check the status of their vehicles. They should also do more: provide regular checks at certified workshops to ensure vehicle and driver safety.

9. Check your insurance

Talking about security leads us to insurance. The primary responsibility for insurance rests with the private owner of the vehicle. But when those vehicles are used for work, employers are responsible and must ensure that their gray fleet is properly insured. Whether this is achieved by modifying private insurance and then indemnifying the driver, or through separate company-level insurance, is a point of contention and added complexity to managing gray fleets.

10. Consider Fuel Monitoring

The very principle of gray fleets makes it difficult to track the most essential aspect of gray fleet management: how much fuel (or electricity) is used when using the private vehicle for business purposes. Therefore, it is crucial to develop a suitable system to measure (and compensate) the use of fuel (or electricity per work). One option is via telematics, another is using fuel cards (and/or recharge).

  • These 10 tips are not set in stone. They are a little different from the list we published last year. In other words: gray fleet management is not an exact science.
  • Much depends on the particularities of your company’s circumstances and those of your drivers, not to mention the legal and tax conditions in your various markets. And you can learn a lot by doing.
  • But if you want to avoid the trial and error phase of optimal gray fleet management as much as possible, why not learn from the experience of others? The best place to do it is Fleet Europe Summit 2022, November 16-17 in Dublin. Click here for more information and how to register.
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