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Grey Fleet Management – Is it a Grey Area?

Grey fleet driver

What is a Grey Fleet?

A company’s grey fleet is, simply, all the vehicles that are used for undertaking work-related journeys that aren’t owned by the company itself. A grey fleet might typically be made up of vehicles purchased via an employee ownership scheme of privately rented vehicles, but in the vast majority of cases it is predominantly made up of employee’s own private vehicles. The Energy Savings Company estimates that grey fleet vehicles are more than three times as common as company cars in the UK. Therefore, grey fleet management is not optional, but essential.

Who should use Grey Fleet Management?

Grey fleet mileage may be relatively low per vehicle compared to that of a company car. For businesses that only need relatively low mileages done in the course of business, then using the Grey Fleet can be a flexible and cost-effective way to manage business needs.

Why is Grey Fleet Management and Grey Fleet Policy Necessary?

It is not enough to tell your employee to use their own car for a business journey and simply put in an expenses claim form. Grey fleet management is far more wide-reaching than simple grey fleet mileage.

The primary consideration of grey fleet management is taking in to account the business’ legal responsibilities. The Health and Safety at Work Act 1974 states that it is the “duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all employees”. This Act reaches in and dictates your responsibility over every mile your grey fleet completes. Fundamentally, both management and the employee can be prosecuted in the event of a road traffic accident that occurs on a work-related journey. It’s therefore essential that businesses know everything about their grey fleet vehicles and drivers in the same way they would a company car.

Additionally by law, there is a requirement for an organisation employing five or more people, to have a written policy on health and safety which should cover work-related road safety for grey fleet mileage.

Grey fleet policy must be included and cover all grey fleet drivers. Bear in mind that in the case of a work-journey related accident your organisation will need to be able to provide evidence that you have taken ‘reasonably practicable’ steps to manage your duty of care.

These requirements for grey fleets established by the Health and Safety at Work Act are now consolidated further with the Corporate Manslaughter and Corporate Homicide Act 2007. Senior Management can be prosecuted for committing an offence if a death is caused by a gross breach in their duty of care towards their employees.

Grey fleet car crash

Beyond legal requirements, grey fleet management also makes fundamentally sound business sense. When managing grey fleet mileage, a holistic and well-implemented grey fleet policy and approach can lead to other benefits such as reduced downtime (of both the grey fleet vehicles and grey fleet drivers), an improved safety culture, improved public image and business performance. If you need convincing further, there are real financial savings to be made through lower insurance premiums, fewer repairs, lower costs of staff replacements and reduced sick pay outlay.

Therefore, managing the employer’s duty of care within their grey fleet management is essential from a legal point of view, business and financial angle. So, what are the next steps?

Grey Fleet Management and Vehicle Tracking

When you begin to consider what your duty of care actually involves in terms of your grey fleet it can seem somewhat overwhelming. How do you know all grey fleet drivers have valid licenses? How do you know that the vehicles are in road-worthy condition in respect to things such as tyre treads, valid MOTs and observance on maintenance schedules? How do you ensure that each employee driving for business purposes has adequate business-use insurance? How do you even know how many vehicles are in your grey fleet? It quickly becomes apparent that this is an enormous task. As you don’t own the vehicles, they can feel outside of your control.

Why Should I Use Grey Fleet Management? What are the Benefits?

An effective grey fleet management system combined with risk assessments and audit trails are essential to recording, monitoring and utilising vehicle data in the same way you would for a fleet of company cars. An ideal solution is to implement an effective fleet management and vehicle tracking system that allows you to manage your grey fleet by actively managing vehicle details, MOT, servicing, insurance, taxation and licenses. A good fleet management system will include these grey fleet tracking requirements.

In addition, it can make sound business and health and safety sense to employ a vehicle tracking system to help you manage your grey fleet, both in terms of maintenance but also grey fleet mileage. Whilst many employees driving their personal vehicle for business-use use the government’s tax free Approved Mileage Allowance Payments (AMAP) scheme, it can be fraught with human error for implementing expense sheets. By utilising a vehicle tracking system as part of your grey fleet management you can easily match up data between fuel consumption and mileage and as a result, eliminate any fraudulent and unauthorised fuel consumption. Therefore, cutting fuel costs and increasing the business’ bottom line.

What’s more, the benefits of employing a telematics vehicle tracking system for a grey fleet extend far beyond mileage monitoring and vehicle maintenance. These systems can be invaluable in determining necessary training needs to make better and safer drivers as well as gathering information that will allow a business to issue recovery quickly in the event of a grey fleet vehicle breakdown.

Marrying together grey fleet management and vehicle tracking systems is not as scary as it may seem. Employees soon come on board when they realise the benefits to them in terms of reliable hassle-free mileage reporting, as well as knowing that the system can be easily switched on or off depending on whether they are using their vehicle for private or business use.

The Bottom Line

Grey fleet management needs to be holistically intertwined with your overall fleet management process; it cannot be forgotten or overlooked are as your responsibilities are the same whether it’s for a grey or company fleet.