Share this news on:Vehicles | 22 MAY 2018
That was the view of Craig McNaughton, corporate director of Lex Autolease, as he told the spring seminar of ACFO, the UK’s premier fleet decision-makers’ organisation, held at the Vox Conference Centre, Resorts World, Birmingham, that the sector was undergoing change at a “scale and pace few, if any, have seen before”.
Fleet decision-makers were being challenged to shape their company car policies against a background of numerous changes with “no solutions” likely to provide clarity “for 18 months or even longer”, Mr McNaughton told the seminar, attended by more than 200 fleet decision-makers and sponsored by TomTom Telematics, a business unit of TomTom dedicated to fleet management, vehicle telematics and connected car services, and Lex Autolease, the UK’s largest contract hire and leasing company.
Among the challenges facing fleet decision-makers is the introduction of the Worldwide harmonised Light vehicles Test Procedure (WLTP) for the measuring of vehicle carbon dioxide (CO2) emissions and fuel economy; government policy around diesel and taxation of the fuel; increasing company car benefit-in-kind taxation and a lack of clarity about the post-April 2020 burden; for fleets that contract hire the lease accounting standard changes effective from 1 January, 2019; and the anticipated widespread introduction of Clean Air Zones in towns and cities nationwide.
Mr McNaughton told the seminar, ‘Let’s Explore: Fleet Management for Today and Tomorrow’: “The need for expert advice has never been greater to guide fleets through the minefield of legislation. We are seeing fleet managers who are putting vehicle ordering on hold and extending lease terms to buy themselves time to work out what the impact of the changes are. But it is not an option for fleet managers to do nothing. It is essential company car policies are reviewed.”
Looking forward he said the direction of travel being dictated by legislation was clear with the future of the company car being fleet flexibility via a “blended fuel policy” embracing the cleanest and most efficient diesel engines, ultra-low petrol models, plug-in hybrids and 100% electric vehicles.
Urging fleet decision-makers to “embrace change” and an ultra-low emission future, Mr McNaughton added that telematics and data analytics were also key in the transition to a “sustainable future”.
He said: “Fleet managers who are not on that journey need to start thinking about it because we are on an unstoppable road. Fleet costs will continue to rise and managers will have to find new ways to save money with data key. Working smarter and having the ability to analyse and improve operational areas of the fleet will be the route to cost efficiencies and keeping the company car fit for the future. It is time to change.”
He claimed that “company cars still remain the best environmental choice for the UK” against a background that employees who opted out of schemes in favour of a cash option could choose to drive older vehicles with higher emissions than if they had stayed loyal to company cars.
Amid already announced increases in company car benefit-in-kind tax over the next two financial years and the fear that WLTP was introducing added complexity to the fleet sector and heralding further tax rises due to vehicles recording increased CO2 emissions under the new testing regime, Mr McNaughton suggested there could be a rise in the UK’s ‘grey fleet’ - employees driving their own cars on business trips.
He questioned whether employers had solutions in place to support ‘grey fleet’ management and warned that compliance, particularly in respect of health and safety legislation, was a critical issue.
Interestingly, he also suggested that businesses that allowed ‘grey fleet’ usage could see costs increase in comparison with employees driving the most efficient company cars with the introduction of Clean Air Zones. That was because own-car drivers would expect to claim back through expenses toxicity charges when they entered urban Clean Air Zones in “dirty” cars.
Experienced managers key in technology-driven mobility management future
Technology has never supported fleets to the degree it does today, but the information delivered must be professionally managed in an ever-more complex business sector, according to ACFO national chairman John Pryor.
Calling on businesses to utilise experienced fleet managers as they morphed into mobility managers, Mr Pryor told seminar delegates that the changes over the last few years that organisations had made to how they operated their fleets was “huge”.
However, he added: “This is perhaps just the tip of the iceberg. How we operate and the tools we can now get to help that operation has never been so diverse. Technology has never supported fleets to the degree it does today and this will only increase.”
But, he warned in the changing world of mobility management, when some businesses may not operate company cars, there was still a requirement for employees to travel.
“If businesses do not see the requirement for this to be professionally managed, they will lose their most vital tool: experience,” said Mr Pryor. “It is all about supporting your business to operate as quickly, efficiently and cost effectively as possible.
“The loss of expertise will also come to affect business. Fleet and the future mobility arena need a co-ordinated approach.”
It was a view echoed by George de Boer, leader of connected car initiatives at TomTom Telematics, who said: “In the past fleet managers only took care of vehicles, but they are becoming responsible for all methods of travel.”
What’s more, in a changing employment world, he said: “Today’s younger employees don’t always want to have a company car, they want mobility.”
Highlighting that many cost areas relating to fleet and travel - for example, overnight hotel accommodation and taxi bills - fell into silos within businesses with no single employee necessarily having a clear overview, Mr de Boer said: “It is very cost effective for businesses to see fleet managers become mobility managers. If organisations continue to have silos they will never get a transparent overview of cost.”
Stressing that the future was “autonomous, electric and connected vehicles”, Mr de Boer concluded: “With connected car technology mobility managers can access information about drivers.”
Science fiction becoming science fact in a connected fleet management world
Science fiction was becoming science fact and it was critical in the new world of vehicle connectivity that fleet managers were “driving change” and not being driven by it.
That was the view of Thomas Schmidt, managing director, TomTom Telematics, who told delegates “the biggest risk is to not think big enough” in a world of transformational disruption in which fleet management and connected car services would merge.
He told delegates that fleet management was transitioning to become “a fully connected business” with telematics technology supporting numerous areas of operation for organisations including Fleet efficiency and vehicle utilisation, driver support, fuel management, legislative compliance and delivering improved customer satisfaction.
And, he warned fleet decision-makers if they did not “make their fleet connected” they could continue for a couple of years before they would be “disrupted” by technology. He added: “Managers need to think about how they will adapt.
“Most vehicles are not connected yet, but good progress is being made and fleet managers who make the right decisions about using technology will find it helps them.”
Equipping vehicles with telematics aids management and driver responsibility
One of the UK’s best-known fleet managers introduced telematics to company cars and vans to “help me responsibly manage the vehicles” with the result that employees have taken on self-imposed driving responsibility.
The benefits, Graham Short, fleet and facilities manager at instant water systems company Zip Water (UK), told the ACFO seminar, also included:
Improved vehicle deployment and utilisation thus boosting customer service levels
Increased driver behaviour with a smoother driving style resulting in fuel savings, reduced instances of speeding and other “driving events” measured by the technology
A 15% insurance premium reduction in the first year of introduction of TomTom Telematics to the fleet of 75 vans and 55 company cars
Theft prevention and vehicle recovery
Robust HM Revenue and Customs’ compliant business vehicle mileage capture making fuel reimbursement claims simpler for company car drivers
Mr Short admitted that data emanating from telematics “could take over your life” so he suggested that it was vital to identify at the outset of equipping vehicles with the technology the critical information required to measure key areas for performance improvement.
Meanwhile, Zip Water’s drivers’ annual incentives are based on five elements and one of them is safe driving. That means 20% of employee bonuses are based on staff improving their on-road performance month-on-month by eliminating “driving events” such as speeding and harsh braking.
“Every driver has their driving monitored as part of their personal performance management with a target to improve. As a result, drivers have taken on self-imposed responsibility to manage themselves as it affects their bonus,” said Mr Short.
“Telematics is encouraging employees to drive carefully on business, which not only delivers operational benefits and aids compliance but has also led to employees changing their driving style when on private journeys. We want our drivers to be safe as underpinning everything Zip Water does is a focus on health and safety.”
Fleet managers must use data to help rewrite policies and stop ‘tinkering’
Fleet managers should stop “tinkering” with policies and use technology-based data to rewrite procedures, Alison Moriarty, award-winning fleet, risk and compliance manager at Skanska UK, one of the world’s leading project development and construction companies, told delegates.
Skanska has introduced TomTom Telematics to its fleet, chiefly as a mechanism to improve driver behaviour, and in an increasingly connected world, Ms Moriarty told fleet decision-makers: “We need to go back to square one with everything that we know and put our policies in place so technology is not chasing us down the road, but we are using technology to transform our fleets.”
Calling on fleet managers to “move forward at the same pace as technology”, Ms Moriarty said she imagined that some fleet decision-makers were still using spreadsheets to manage vehicles.
What’s more, some fleets that had turned to telematics were “doing something” with the resulting vehicle, driver and journey management information, but questioned Ms Moriarty: “Is change really being addressed.”
Research suggests that using a hands-free mobile phone while driving is as dangerous as drink-driving, but said Ms Moriarty, few businesses banned usage. Instead they had adjusted fleet policies to advise drivers to perhaps only speak briefly and to return the call when safe to do so.
But, said Ms Moriarty: “If fleet managers had known that drivers using a hands-free mobile phone was that dangerous when they started to be introduced they would have banned them. We are not keeping up with technology; we are tinkering.”
She also suggested that while speeding drivers were breaking the law an employee who perhaps stole paper from their employer could be dismissed for theft.
Ms Moriarty, who is a magistrate, said: “With telematics data, speeding drivers can be identified. The only difference between an employee stealing from a business and speeding is that they are not going to kill someone by stealing paper. So why is not speeding treated like theft as a dismissal offence?”
She continued: “It is time with all the information that we have to forget the policies we have in place and think about what our future strategy and policy is. Fleet managers then need to write policies and procedures from scratch based on what is known and ensure employees understand why they are being monitored through the use of telematics.
“Fleet managers have data in their arsenal and they need to use it to monitor and evaluate and change the way drivers think.”
Telematics data ‘very effective’ in changing driver behaviour, says safety expert
Telematics data was “very effective” in encouraging behaviour change among drivers to improve fleet safety, according to Dr Lisa Dorn, associate professor of driver behaviour at Cranfield University.
Telling seminar delegates that there was “a lot of work to be done” to help drivers overcome lapses that either resulted in crashes or increased the risk of incidents, she said introducing telematics to fleet vehicles was “an excellent way of monitoring behaviour”.
Dr Dorn said: “If drivers are not aware of the danger they are in how can they be expected to change behaviour? Telematics data is a good way of fleet managers providing evidence to address the risk.”
Highlighting that there was a range of driver behaviour interventions to manage fleet safety and teach new skills to employees on the road, Dr Dorn suggested that “knowledge and skills-based driver training, in the long run, will not keep fleets safe”.
She continued: “Fleets need to do something that is more in-depth. When not being observed driver behaviour returns to what it was hence the benefits of telematics because drivers are being continuously monitored.”
Describing telematics and the management information gathered as “nudging technology to coach drivers to understand themselves” and change behaviour, Dr Dorn said: “Fleet managers can use telematics interventions to drive very effective feedback through coaches.
“Having a conversation with drivers once a week is very beneficial. If fleets do not keep messages going and reminding drivers of their responsibilities then very soon behaviour drifts back to before interventions were introduced.”
Dr Dorn concluded that for fleets that wanted to change driver behaviour over the long term telematics’ data and a coach were required “and not just a one-off driver training intervention” and added: “Don’t just leave telematics working in the background because eventually, drivers will ignore the technology.”