Business owners which need their employees to be on the road often for work purposes are likely to be responsible for grey fleet drivers. Here, long term van hire specialists Northgate outlines everything you need to know about the grey fleet and some alternatives which you may benefit looking into at your business:
Grey fleet: what is it?
Any vehicles which are used for business purposes but not owned by the business that is using them can be referred to as grey fleet. 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.
Whichever way the setup plays out, the 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 duties
Business owners who operate with a grey fleet are responsible for their grey fleet drivers — they must therefore be aware of 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.
With grey fleet drivers, the Act means that an employer will have the same legal duty of care to be aware of for them as they do for anyone who is behind the wheel of a work supplied vehicle.
British charity the Royal Society for the Prevention of Accidents (RoSPA) has this online service available which outlines how employers should manage their grey fleet, as well as all of their legal duties too. 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
In its annual Report on Motoring 2016, Lex Autolease revealed 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.
It has been 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, according to the Energy Saving Trust.
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.”
Additionally, the BVRLA are 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.
What can you do differently?
If you are looking to reduce your reliance on the grey fleet, you’ll be pleased to know there are a number of alternatives you could consider:
Salary sacrifice schemes
When your vehicles are used for business purposes, employers could introduce a salary sacrifice scheme where employees have the chance to relinquish a part of their salary and in return receive the non-cash benefit of a new lease vehicle.
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
If you choose to use vehicle rental services, your employees can use brand-new vehicles on a flexible basis.Vehicles can be delivered for the company to use for as little as an hour at a time or for a month or more.
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.
By reducing the business mileage threshold to which employees will be eligible to get behind the wheel of a company vehicle, you can reduce grey fleet drivers.
Lex Autolease’s 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.”