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Guide to Managing The Grey Fleet

The Grey Fleet

'Grey fleet' definition: All employees that use their own cars for business travel. There are estimated to be three to four million such vehicles being used on the roads in the UK today. Nearly 1 in 4 vehicles being driven on business is a 'grey fleet' vehicle.

For many businesses, paying a fixed mileage allowance for the use of a private vehicle rather than providing a pool car or arranging for a short term rental can be seen to be the most convenient option.

Part of the difficulty in assessing the extent of the grey fleet lies with the fact it is almost impossible to define what constitutes business use of a private vehicle. This can also lead to problems with insurance with which we will deal with later.

The fact is that Health and Safety law covers employees at work and this includes when they are travelling on business.

If employees use their own cars for business travel, the employer has a duty of care to ensure that those members of staff are safe. This is a concern in light of the fact that the average age of privately owned vehicles is over six years. By contrast, the average age of company cars, generally replaced every three years, is one and a half years. Therefore, grey fleets are on average, four times older than company or pool cars. Crucially, newer cars have the latest technology, so are safer, greener and more fuel efficient.

There are a number of issues with grey fleets emerging here:

A Company's Profitability

A grey fleet car is usually operated by an individual who pays for the vehicle's insurance, tax, repairs and petrol and then claims back the cost from his company at the HM Revenue and Customs authorised mileage allowance payment of 40 pence a mile for the first 10,000 miles and 25 pence thereafter.

Used for a few short trips, this represents reasonable value to a company. However, any journey over 80 miles a day becomes uneconomical for the company. This is the threshold above which it is cheaper to hire a car for the trip or run a small company pool car or two.

Health and Safety

The long-awaited Corporate Manslaughter and Corporate Homicide Act, which, after a lengthy legislative gestation, at last received royal assent on 26 July 2007 and was fully integrated into UK law on 6 April 2008. For the first time the Act provides for unlimited fines to be imposed on companies if they are found to have caused death due to health and safety negligence.

So for small firms running a fleet, the first step is to ensure that they are fulfilling their duty-of-care obligations by ensuring vehicles are roadworthy. Whether employees are driving a company car, a vehicle purchased through a cash-for-car scheme or using their own car for business use, the new legislation will make it the employer's responsibility to ensure the vehicles are roadworthy.

The real danger here lies with a grey fleet driver who has worn tyres, or some other defect that he or she always meant to deal with but never got round to doing.

That vehicle owner then has a crash and someone is killed.

Following a fatal accident, police officers will be investigating companies' risk policies. Fleets that turn a blind eye are likely to face the severest of consequences.

Several commentators believe this will discourage employee car ownership schemes and see a return to the company car scheme, as ECO options mean fleet managers have less control over the type and ongoing condition of an employee's car at any given time.

If companies are going to let employees use their own cars for business, it is the employer's responsibility to ensure employees are making the following essential safety checks:

• The car is roadworthy and has a current MOT (if more than three years old)
• The driver is licensed to drive
• The vehicle is insured for business use
• The car is regularly serviced
• The employee has membership of a roadside recovery organization
• The employee is carrying out basic maintenance checks such as oil, washer fluid, tyre pressures

(In a recent Duty of Care Survey 34% do not check driver licences, 52% do not check business insurance and 74% do not check MOTs)

Impact on the Environment

As grey fleet cars are less fuel efficient and have higher emissions than company cars it follows that the use of private cars for business trips is a source of harmful carbon emissions which damage the environment in this country. The cumulative impact on the environment from grey fleet users is profound.

Companies can help by restricting the use of larger, older, dirtier cars on their grey fleet. Of course, this may be unpopular with many employees for whom the use of their own cars for business trips can represent a lucrative second income. Robust fleet policies for company cars can be a valuable weapon in reducing an organisation's carbon footprint.

Action Plans

'Grey Fleet' Action Plan for The Bigger Fleets

1. Assess the driving capabilities of all new drivers
2. Routinely screen driving licences of all drivers who may drive a 'grey fleet' car
3. Check all Insurance Policies of grey fleet drivers on a regular basis to make sure they conform to the company's standards
4. Implement vehicle spot checks - analysing general condition,
   roadworthiness and service history of grey fleet cars
5. Monitor the drivers' working hours including travelling time
6. Record, classify, group and statistically analyse all accidents
7. Undertake a full risk assessment to identify problems
8. Act on the information gleaned and prioritise solutions
9. Design a management plan to implement the solutions and communicate it to all staff
10. Introduce a driving safety culture that does not lightly accept accidents
11. Provide targeted education and training for drivers

Companies with a smaller 'grey fleet' at the very least should keep a 'Grey Fleet Register' to show they are exercising some control. Appendix 1 below is an example of such a register which can be printed on A4 sheets and kept in a binder to be regularly checked.

A thank you to Robin Mckie of the Guardian.

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All of the documents can be obtained from us in a word format, so that they can be personalised and edited to suit your company or business. This service is free of charge, on request or phone 01908 262662.