Gray Fleet Management - Why are there no tools on the market?
A company-wide focus on having exclusively gray fleet drivers can be really beneficial for business, however, a gray fleet may also be hard to manage properly.
Gray Fleet - A Brief Description
“Gray fleet” is a term applied to drivers that use their private cars, which are physically owned by the employee, for business as a part of the company fleet. Thus, a full time employee may use his private car at work to do a job outsourced by a company to a variety of independent drivers.
A company-wide focus on having exclusively gray fleet drivers can be really beneficial for business, however, a gray fleet may also be hard to manage properly.
Gray fleet - Let’s Start with the Benefits
The basic advantage that gray fleet drivers bring to an organization is a low cost of investment. With this method, a company does not have to invest a large amount of money upfront to buy or lease cars. The average cost of a car lease is from $200 up to $600 per month, plus running costs: fuel, minor repairs, scheduled maintenance etc. Of course, the costs depend on car type and lease terms but at first blush, gray fleets seem to be the cheaper option for companies, especially if reimbursement rates per miles/day etc. are taken into consideration. The rate conditions may differ and it can be higher for the first 10.000 miles and then gradually drop. Of course, a particular gray fleet's terms may include additional “alert” expenses but it is not universally the case, it depends entirely on the conditions included in agreement between the organization and the driver(s).
If a company decides to operate and grow its business on the backs of gray fleet drivers, it should keep it in mind to carefully prepare the contracts, rules and conditions to attract responsible drivers and let the gray fleet and the business itself grow. Properly motivated gray fleet drivers may turn out to be better employees than full time drivers that operate company cars. Psychologically speaking, one cares more about his own property than another person's, especially when it seems to lack any personal owner as a car belonging to an organization or company often can. To this end, one fixed rate can motivate gray fleet drivers to take care of the car to prolong the lifespan of the vehicle. Company owned vehicle fleets sometimes require on-the-spot maintenance due to mistreatment, so organizations may also save on so-called “preservation costs.”
Gray fleet - Drawbacks
Once a company decides to try a gray fleet, at least as a temporary solution, they will face numerous problems that it brings along. In companies where fleet management is important, or a core part of the business, a gray fleet is recommended only in a crisis and only in the short term. Why? For trivial reasons - gray fleet drivers are very hard to manage properly.
First of all, a gray fleet's core attribute is that the vehicle is not the company's property so without an owner agreement it can not be monitored by any method in the company's fleet management system.
The organization has limited abilities to regulate and optimize the gray fleet drivers' work - accordingly to company standards and procedures
Limited influence on drivers' trip or annual reports (mileage, car usage, working hours, route fees)
Submitted reports can not be corroborated with any outside analysis or data points.
Gray Fleet – Reducing the Cash Leak
In the era of the internet of things, the technology and optimization of company expenses is essentially a requirement in order to plan even small investments in advance and monitor the return(s) they bring. Up to half of the money spent on gray fleets can be wasted due to a lack of proper management of, or control over, gray fleet drivers. ‘What is it that actually raises the running costs of gray fleets in organizations?' you may ask. Generally there are four most common factors which can be easily prevented with a little help from technology:
Personal errands and trips during working hours
Over-usage of the car when the company covers annual vehicle maintenance costs
Not planned or optimized routes
Falsified or inaccurate mileage reports
As I mentioned above there are limited ways to control the expenses on gray fleets. Gray fleet drivers' costs may be calculated according to:
Fixed day/annual rate
Fixed mileage rate
Mileage limits per day or month
2-step mileage rates
Reported mileage driven
Real mileage driven during working hours - this applies only when the gray fleet is supported by fleet management solution
The easiest way to reduce gray fleet costs is to apply technology that allows the organization to manage any kind of vehicle in the fleet and does not require any installation or owner permission, allowing it to be used in any sort of fleet arrangement, including gray fleets.
There are just a few fleet management solutions that are recommended to gray fleet management because these solutions do not require installation and are dedicated to monitoring the car conditions or driver’s habits. Mojio, Automatic, and Cloud Your Car.
Two first examples instantly send the driving dynamics and car's condition via Bluetooth to the driver’s smart-phone, thus real travel data is gathered and may be sent as trip reports to the organization. The data gathered is also secured from fraud or accidental erasing to not lose the entirety of the crucial trip information. Cloud Your Car works differently, as it is strictly designed for fleet management. Cloud Your Car offers plug-and-play hardware, - a tracker - and an application for the fleet manager and organization. Generally, Cloud Your Car tracker is powered from car’s cigarette lighter socket and does not require a fixed installation or the car owner's permission like traditional trackers. The plug automatically sends the trip report to a remote server, thus there is no risk of fraud or data erasure, accidental or otherwise. Another Cloud Your Car advantage is the software which helps the organization optimize gray fleet costs, shows where money might be wasted, how high the risk of accident for the company as a whole and each individual driver is, who drives the most efficiently and needs another driver's ed course, etc. With easy access to such records and analysis, the company's human resources department can easily calculate working hours or annual bonuses and it can also be used in the financial department as a wages calculator.
With such a system, every one of a company's departments can have automatic access to (gray) fleet reports and benefit from them, thus the fleet management solution also optimizes work in all the offices of the business simultaneously.
It should be obvious that in a crisis, measurement and analysis help a company to effectively and wisely manage their resources and make the right business decisions based on accurate data. What is important in this case is that this measurement must not overwhelm the business's core activities, it must be automatic and easy in use to save time, energy and money.
