When your business requires your staff to be on the road at times, there is a chance that you will be responsible for grey fleet drivers. Here, van lease specialists Northgate outlines everything you need to know about the grey fleet and some alternatives which you may benefit looking into at your business:
What is a grey fleet?
The term grey fleet refers to vehicles which are driven for company purposes and travel, but are not owned by the company using them. 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.
These vehicles are driven for business purposes only — usually with fuel expenses covered or in return for a cash allowance — and so will see the responsibility fall under the employer.
The legal duty of employers
Business owners must be aware of The Health and Safety at Work etc Act 1974 when it comes to having grey fleet drivers within their business as well. 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.
The Act means that an employer will have the same legal duty of care to be aware of for grey fleet drivers 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 helps employers who are unsure about grey fleet management and ensures they are managing all of their legal grey fleet duties. 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 the annual Report on Motoring for 2016 from Lex Autolease, it’s estimated that there are close to 14 million grey fleet vehicles currently 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.
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 research carried out by 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.”
Recently, the BVRLA have called for bosses and policymakers to rein in the grey fleet, as 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 other options are available?
There are several alternatives that your business can use when trying to reduce grey fleet usage.
Salary sacrifice schemes
If you were to introduce salary sacrifice into your business it would give employees the chance to relinquish a part of their salary and in return receive the non-cash benefit of a new lease vehicle.
You would also be helping reduce the number of older vehicles on the roads as they would be replaced with newer models which are less polluting and better maintained. 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
This service allows you to use brand-new vehicles for company purposes on a flexible basis as vehicles can be delivered for the company to use for as little as an hour at a time or for a month or more.
Business owners can track and monitor usage, vehicle emissions and costs once an agreement is worked out. Companies supply employers with in-depth management reporting information.
Company vehicles
If you lower the business mileage threshold, your employees could become eligible for company vehicles – which again would reduce reliance on grey fleets.
Lex Autolease’s principal consultant 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.”