Fleet News

Fleet News Forum: Getting to grips with industry issues

FLEET managers discuss the most pressing issues affecting their job and the industry.

The panel:

Sara Wisnieswski
Fleet services manager, Yell
Fleet size: 1,700 cars

Mike Dodge
Fleet manager, LloydsTSB
Fleet size: 4,850

Tony Leigh
Head of car fleet services, PricewaterhouseCoopers
Fleet size: 4,450

Neil McCrossan
Vice-president, commercial development, Vanguard Rental (UK) Limited
Fleet size: 45,000

Susan McDonald
Head of strategic sourcing, employee services, NTL/Telewest
Fleet size: 5,000

John Saunders
Fleet manager, Guide Dogs for the Blind
Fleet size: 500

Stephen Botham
Fleet and services manager, Wiltshire Police
Fleet size: 350

The questions

  • What do you believe will be your biggest challenge this year and why?

    Mike Dodge: It is duty of care and we have got a thorough health and safety team. We have a new policy and guidelines for anyone in the group travelling on business in a car. This has been released to the group and we are working on getting that implemented and understood.
    Tony Leigh: We have a salary sacrifice scheme, so staff only have to take the minimum salary in pay and the rest they can flex into other benefits, including a vehicle. If you take a car it is more cost-effective and a better benefit than taking cash, so the challenge is to get more people into the car scheme, because it is a benefit to them. Keeping costs down to the staff to encourage more people to take a car is also a challenge.
    Neil McCrossan: Our major challenge is manufacturers limiting supply of vehicles to the rental industry. In addition, we are seeing a very high increase in maintenance costs – labour rates in particular. Talking to people in contract hire and leasing businesses, they are saying the same. Manufacturers and dealers could be trying to improve margins through maintenance and parts costs and with consolidation the room to leverage purchasing power can be restricted. Accident damage costs are also increasing, which is a symptom of more congested roads. Susan McDonald: The challenge is dealing with a change in culture following NTL merging with Telewest and understanding the new fleet. Also, parking in London is a nightmare for our company. We have the congestion charge under control, but it is parking and clamping that makes it very difficult for drivers to get their jobs done.
    John Saunders: We carry animals and visually-impaired clients and we are moving to bigger and slightly more complicated vehicles. With new vehicles, we are trying to make sure people take care of the vehicles and focus on our duty of care to drivers. Stephen Botham: One of our big areas is duty of care, especially for casual vehicle users. One of the biggest challenges for the whole police service is regionalisation of police forces, which will see a drop from 54 forces to fewer than 20. With that comes a huge change which comes right down to the transport section.

  • What challenges are you facing in keeping accidents down?

    John Saunders: We have been good at making sure our animals are well protected and we work with all the various agencies for our passengers. We are focusing more on our internal people and there is a mass of thousands of volunteers who help with areas such as puppy walking that we need to consider.
    Susan McDonald: We have made great progress with regard to work-related road safety. It is making sure people know what their obligations are when it comes to maintenance and ensuring staff have read the policy and confirmed they have read it. We do that all electronically through an interactive database that has been written in-house.
    Neil McCrossan: We have our own drivers moving and collecting cars working to tight service levels for customers. We must take that seriously along with responsibility for the vehicles themselves. If a vehicle is due for a service, then it will automatically be blocked from rental. For drivers we have to make sure every vehicle has a guide in it and police what vehicles they receive to meet customer policies.
    Tony Leigh: We are sampling 10% of own-car drivers who claim mileage every month. They have got to sign a mandate and produce their insurance certificate and provide an MoT and sign a declaration they will maintain their vehicle and keep it safe. This is in addition to signing a mandate every year saying they will look after their vehicle. Also, anyone caught using a mobile phone while driving will be liable up to and including dismissal. There is also a handover procedure for every hire car.

  • Have changes to fuel pay-and-reclaim affected your fleet?

    Susan McDonald: We provide most of our drivers with fuel cards and they fill up completely and log their business mileage, so the private mileage is then reduced from their pay. We have managers who make sure the expenses claims are correct. Our expenses people won’t give employees the money if they don’t have a VAT receipt.

  • What does the future hold for the company car on your fleet?

    Tony Leigh: The company car is growing enormously. Two years ago the fleet was 2,400, now 3,800 vehicles, and growing every month. It has been growing by about 40 or 50 a month average, driven by the salary sacrifice scheme. People are being educated that it is better to take the car than the money. For a 40% taxpayer to spend £350 a month on a retail car they have to earn £500 a month. It is a win-win situation for the employee and the company.
    Mike Dodge: Our HR department sees the company car as good for recruitment and retention, but we have a lot of people taking cash. People see the gross amount on their payslip and don’t think about the fact that tax and NIC is taken off that. We are doing research on why cash-takers are taking cash – for example, drivers in London who don’t need a car.
    John Saunders: We allow drivers to use our company vehicles at the weekend which they have not done in the past. It gives them a benefit but allows us to work a lot more flexibly because vehicles don’t have to be returned to our premises overnight. The biggest driver for us is duty of care because we are safer using our vehicles to do the job rather than letting people use their own vehicles.
    Susan McDonald: It is much more economical for us to give company cars because of the discounts that we can get, especially when vehicles are passed on to another driver if someone leaves.
    Neil McCrossan: Government fiscal policy created the company car culture in this country and it will be future Government fiscal policies that will determine the fate of the company car. There has been a lot done over the last few years to give people other options and it will be interesting to see, as some of those schemes reach the first replacement cycle, whether they step back into a traditional company car.

  • How have forthcoming changes to van taxation affected your fleet?

    John Saunders: There is debate going on. Most of our commercial vehicles tend to be pool vehicles but it is becoming an issue and unless we say you can’t do private mileage, there is little choice as to whether drivers do the mileage or not. It is an internal debate at the moment.
    Susan McDonald: We started a campaign last year to give drivers the choice of if they wanted to have extensive private use of a vehicle. They all have to take vehicles home, but under the new rules, they are saving money because it is no longer a benefit.
    Stephen Botham: For dog vans we have a special arrangement so that there is no tax involved. They are fully marked up, so you wouldn’t go shopping in it anyway. It is a career restricting move if drivers are taxed, because no-one would want to go into the dog section as a result. That is why we have a dispensation. It is the same for cars.

  • Is diesel still popular despite the loss of the Euro IV tax break?

    Tony Leigh: A lot of the vehicles are coming down in CO2 anyway and people are becoming more environmentally conscious and in terms of global warming diesel is better. And there are a lot of smaller diesel-engined cars. Going forward there will be diesel hybrids. While we have high fuel prices, diesel will be popular because they do more miles per gallon, particularly at the larger end. Our orders are about 65% diesel, but it depends on the offers we have for staff. We also have an environmental levy in our costs so the lower the CO2, the lower the rental. People respond to that.
    Mike Dodge: There is still a slightly larger percentage of drivers run a diesel car than petrol and there is still a very slow trend towards diesel.
    Susan McDonald: There is little choice for our drivers and diesel is still the choice for the mileage that we do. It is company policy.
    John Saunders: Our policy is that we run diesel so every new vehicle is diesel now. The fleet is about 70/30 diesel. We get very few enquiries where people want petrol.
    Stephen Botham: Years ago we started to move to diesel because of fuel consumption. Bulk storage is also cheaper. Now Wiltshire is 100% biodiesel. We are now moving into high-speed vehicles using diesel.
    Neil McCrossan: We are around 33% diesel. For short-term rentals people don’t mind what fuel a vehicle is, although longer-term rentals more people want diesel.

  • What new service could help you do your job better?

    Tony Leigh: One of the things I have had a problem with for years is not knowing when a car has been in for warranty work to be carried out. Leasing companies have no obligation to record it because there is no cost. The first thing you hear is when a driver says they have been in six times for the same problem. Leasing companies systems don’t seem to be able to cope with recording zero-cost work. It would help me knowing problems before they become a driver problem, because we are based around service.
    Neil McCrossan: We have to employ people to pay parking fines, bus lane fines, congestion charging fines and so on. If someone could invent a service for the industry where they would centralise all that and take it off us that would be highly cost-effective and remove a huge hassle factor and cost for the business and the industry which is only going to get worse. We now employ nine people just dealing with this issue.
    Susan McDonald: Down-time is a real issue. We have had some vehicles under warranty off the road more than they were on. It took a long time for me find out a car was in for an exhaust and there wasn’t the part available. We want a company that will tell us the moment vehicles go in – and when they come out – for all problems. The advantage of being large is you can change the industry a bit.
    John Saunders: It is difficult to know how vehicles will be treated depending on whether it is a car or a van as, even under the same brand, there are different service levels.
    Stephen Botham: We have a car cleaning issue. For example, if there was a car that was covered in blood or scabies, then it is difficult to find people that want to clean it. Getting car valeting companies to deal with the nasty stuff and give us a certificate is very difficult to find in the industry. There are companies, but very few of them when you want to have enough for a tender.

  • Is there such a role as a fleet manager any more?

    Stephen Botham: We passed the fleet manager stage years ago. While we don’t organise the travel policy in terms of taxis and rail fares, we do have an impact on that side of it. We do costings to show whether it would be cheaper to go by rail, car or aeroplane. We are consulted more and more on the travel issue. In future there will a transport director with a logistics department which includes a transport function.
    Susan McDonald: The amount of information and expertise you need to have to be a fleet manager is growing all the time but isn’t necessarily valued within businesses. We can probably justify a fleet manager with 5,000 vehicles, but with smaller fleets it can be very hard to justify. For most organisations that are smaller it has made it more cost effective to buy it in.
    Tony Leigh: Going forward people will see the car as one solution, next to video conferencing, going by train or plane and so on. The problem is a lot of fleet managers think of themselves only as fleet managers and won’t consider that they are mobility people and part of a movement forward into mobility management for a whole organisation. It ought to change with new people arriving in the industry replacing the old guard.
    Susan McDonald: If you reinvent yourself as a procurement person you have a different profile in the company.
    Neil McCrossan: The challenge is for people who have fleet titles to move up and occupy that space rather than people from other departments move and take responsibility for fleet as well, which means the company loses the fleet manager’s technical expertise.

  • Leave a comment for your chance to win £20 of John Lewis vouchers.

    Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

    Login to comment

    Comments

    No comments have been made yet.

    Compare costs of your company cars

    Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

    What is your BIK car tax liability?

    The Fleet News car tax calculator lets you work out tax costs for both employer and employee