Fleet News

Businesses unlikely to swap company cars for mobility solutions

mobility graphic

Company cars are still the preferred method of travel by the majority of companies that operate fleets, according to Arval.

Its latest Mobility Observatory asked businesses whether they would fully or in part give up their vehicle for a range of alternatives.

The survey found that just 7% would “probably” or “certainly” opt for car sharing, 9% for ride sharing, 8% for a mobility budget, 11% for a private lease vehicle and 7% for mid-term rental.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said: “There is a lot of discussion in corporate circles about mobility solutions at the moment and our research shows that interest is high. As a provider, we believe that there is considerable potential for these products.

“What is clear above all, though, is that the company car looks set to remain the core transport method for the foreseeable future. While decision makers and employees in organisations are interested in mobility solutions, it appears that the vast majority see them as supplementing or being a partial alternative to the traditional fleet.

“The reasons for this are simple, we believe. Some of them are revealed in our research by showing how much employees value having a company car and the benefits it brings. The other is that, when a typical multi-stop journey is undertaken, a car is literally the only practical option.”

The research uncovered differences between smaller and larger organisations when it comes to attitudes to mobility products. For example, while just 3% of businesses with fewer than 10 employees would opt for car sharing; in those with 1,000 or more employees, this grows to 14%. 

There are also signs of widespread interest in mobility solutions. Car sharing is already being used or considered for use within the next three years by 31% of respondents, ride sharing by 45%, mobility budgets by 21%, private lease by 23% and medium term rental by 22%.

The research also looks at reasons why drivers are unlikely to want to give up their company cars. They are ease of motoring (mentioned by 16% of respondents), not having to finance their own vehicle (14%), no risk of ownership (10%) and delivery of a new car every 3-4 years (8%).

“A mixed provision model is one that we have been saying for some time is the most likely to develop in the majority of businesses, where a range of mobility solutions are used alongside company cars with employees using the most appropriate form of transport for each journey.

“Our belief is that, over the next few years, as more and more fleet managers become mobility managers, one of the most interesting developments will be the process that businesses undergo in learning how to use mobility options in the most effective manner,” added Sadlier.

The number of company car drivers appears to have fallen by 50,000 year-on-year, according to new benefit-in-kind statistics published by HMRC.

However, tax officials say that initial analysis suggests a new way of reporting company car tax may have skewed the figures.

Since 2009-10, the number of company car users had remained relatively stable (at just under 1 million). But, new provisional figures for 2017/18 indicate a dramatic fall from 940,000 in 2016/17 to 890,000 the following financial year – a 5.3% decline.

The Arval Mobility Observatory covers 3,930 fleets and asks a wide ranging set of questions about fleet and mobility trends. Click here to read more about the results of the Arval Mobility Observatory research.

Click here for grey fleet best practice and procurement insight

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