Despite initial scepticism against its myDrive scheme, launched in 2002, the company’s staff, including those eligible for a company car, have embraced the scheme and recognised its benefits.
Paul Farley, HR director for reward and commercial Businesses at the BBC, spoke about the success of the scheme at a conference session in London held by Employee Benefits magazine.
Firstly, he asked delegates: ‘Why change your company car scheme? You run into enormous emotions and taking car keys away from an employee seems worse than any other experience.’
For the BBC, there were many factors that necessitated the need for a change to its fleet operation, both internally and externally.
One of the biggest external factors, naturally, was the introduction of the carbon dioxide-based company car tax in 2002.
Farley said: ‘It was obvious to us that a lot of drivers were going to be faced with extra tax liability under the new company car tax scheme. We also knew it would increase in 2003/2004 so decided to take action.’
An internal factor was that hundreds of senior managers within the corporation were offered a cash or car choice, with an unrestricted choice list.
It was also important for the BBC to offer a package that was viewed as attractive by all staff because the organisation works in such a ‘dynamic recruitment market’, Farley said.
The end result was the launch of what is called the myDrive scheme, which is open to all BBC employees whether or not they are entitled to a company car.
It enables employees to purchase cut-price cars, bikes and scooters and was launched in conjunction with leasing company Alphabet. myDrive is described as a structured employee car ownership plan which offers access to a car scheme without drivers having to pay benefit-in-kind tax.
Because ownership of the car passes to the driver, it is classed as a private vehicle, not a company car.
It is offered to senior directors who would have previously been offered a company car and also to employees seeking a ‘low-cost, hassle-free route to driving a new car’, Alphabet claims. At the time of its launch, an Alphabet executive said: ‘As the record levels of new car registrations show, more and more people want the experience of being first-owners. MyDrive offers the corporation’s staff an attractive and highly competitive additional route into the new car market.’
Introducing such a brand new concept into any organisation can obviously cause staff to be suspicious.
‘There were people who valued the perk of a traditional company car despite them not being sensible economically,’ Farley said.
To overcome any concerns about myDrive, Farley and his team ensured they communicated the scheme effectively with a constant stream of literature, a dedicated intranet website, regular features in the in-house staff magazine and promotional events, including roadshows, competitions and prize draws at major BBC sites.
For some, the offer looked too good to be true while others were of the opinion they wouldn’t benefit as much from it as they do from a company car scheme.
Farley said: ‘Communication is vital in these circumstances. We emailed all staff before its launch and also sent details to their home addresses, timed to coincide with the weekend so they could sit down and talk about it with their families.’
BMW, MINI, Peugeot and Vauxhall cars are offered to staff as part of the scheme and Farley added that a partnership approach between funding supplier, manufacturer and the BBC was key to its success.
Since launch, up to 50 people a month are taking up the offer and for the BBC it means reduced administration as the driver deals directly with a dedicated team member at Alphabet.
A total of 950 orders have been processed, a figure Farley says is sufficiently strong to say it was worth the effort.
Because of existing company car lifecycles, it will take up to four years for all interested staff to transfer over to the myDrive scheme.
The fixed monthly payment, deducted from an employee’s salary, includes servicing, road taxes, insurance and breakdown assistance.
Alphabet bears the cost of setting up and administering the scheme and also guarantees the second-hand values of the cars. But addressing delegates, Farley stressed: ‘What we have done at the BBC might not be appropriate for your organisation.’
THE BBC is not alone in offering staff alternative car schemes.
Research produced earlier this year showed that the company car tax system launched in 2002 had made 37% of companies keen to reduce their fleet sizes (Fleet NewsNet, February 12). Compiled by Employee Benefits magazine, it found an increasing number of companies are opting for car ownership schemes as an alternative to providing company cars.
Under such schemes the vehicle is not classed as a company car for tax purposes but Employee Benefits believes the growth of car ownership plans will be restricted to big companies due to their purchasing power.