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For some, moving to a Mobility Fleet Solution can seem daunting and confusing. Within most businesses, there are cars (both perk and essential-use cars), other travel costs paid via expenses while airfares and train tickets are generally paid centrally by the business.

Although the word ‘mobility’ is used by different industries, sectors and countries with many different solutions, this short guide is designed to provide a simple roadmap of many possible paths that your business can develop in order to provide your employees with a mobility solution. This could be either an alternative to an employee’s car allowance, full replacement of your fleet & travel schemes or anything in between.

The AFP has already produced a guide to ‘What is Mobility and Mobility Management?’.  It would be useful to review this document alongside that guide.

FIRST STEP – Do your homework. Get your data.

As with all good plans & strategies, a business should start to review all their data within their organisation in order to get a relatively good understanding of all their business mobility costs and reasons for travel.

SpreadsheetThe aim of this exercise is to be able to drill down to an individual employee to see their holistic cost to your company for all their business travel. The immediate costs to consolidate are the leasing costs, including associated costs such as insurance, SMR including car parking, trains, tolls, taxi (inc Uber, Get) and daily rental spend. 

The second phase of the data collection is then to review this with all the actual business trips, including reasons for the trips.

Once completed, not only will you have total control and visibility on your business’ mobility spend, you will easily then see some really interesting data around:

  • Employees who have a cash allowance but take the train all the time or hire a rental vehicle for business trips
  • Asset utilisation of their vehicles, including eligibility levels (i.e. they are eligible to have a car if they travel over 8,000 business miles but are actually doing a lot less than this)
  • Rentals being booked for a week when they are only needed for one day’s business travel.
  • Simply monitoring, outside of the leased vehicle, the spend per employee against other means of travel that we recorded through expenses
  • Regular journeys undertaken to identify the most commonly used routes and travel means. This will help understand where alignment and economies could be made.

High-level analysis can then be carried out about the potential savings that could be unlocked at this stage – do perform a simple cost/benefit analysis.

Any data that is collected, should be able to be viewed and drilled down to the individual’s activity, as this will be helpful when overlaying your Expenses, Travel & Fleet policies with the actual costs incurred.

This analysis alone could provide an immediate return on the investment of collecting the data, highlighting cost leakage from your business that can be remedied by amending your travel and fleet policies accordingly.

SECOND STEP – Internal Engagement. 

Any mobility solution that is deployed within your organisation should improve your business’ sustainability, lower CO2, improve employee productivity and well-being (morale), optimise your cost base and, most importantly, fully suit the employee’s needs.  

GroupIn order to tackle this task, a working group should be set up across functional departments which includes HR & Benefits and Travel & Fleet. It would be worthwhile including some representation from Finance while consideration should be given to having some ‘voice of the employees’ added to the group as well.

It is recommended to launch an employee survey to identify the barriers, capabilities and a wish list of needs for their business and private travel. This should be used to find out the attitudes to the current car and travel schemes in order to ascertain aligned next steps.

The basic role of the working group initially should be to discuss the findings and insights from the data collection & survey but also then move on to how to best deliver a mobility solution to the employees.

The following checklist is a helpful guide to the topics to be discussed, ensuring that everything is ‘put on the table’: 

  • Ratify the policy the company has for both travel and car.
  • Discuss the complete supply chain – Lease Company(s), Rental, T&E, Travel Management Company, Fleet Management Company plus any others.
  • Understand the employee needs. Is there a disconnect with the travel company in how they operate at present (i.e. red-eye flights, out-of-town hotels and any other frustrations)?
  • Review existing flex-ben schemes to see if anything can be offered beyond the car.
  • Identify any mobility solutions your existing employee base are currently using, if any.
  • Look to improve asset utilisation of the fleet of vehicles currently in your portfolio.
  • Post COVID, could more be done to avoid business travel? Could productivity be increased (conduct meeting through Zoom, MS Teams)? How to remove the macho-style ‘road warriors’ performing 000’s of business miles per year. Is the policy set to avoid this happening?
  • Highlight those employees who do not wish even to run a permanent vehicle – remove any internal barriers to allow flexible ownership models? You will have some employees that do not wish to take a car or cash allowance (if your policy forces them to own a new car).
  • Ask the questions:
    • Why do we have cars in our business? Split it into perk, essential-use fleet cars and also cash allowance. Focus should then be on the perk & cash segment first.
    • Journey patterns are changing – what are the current needs?
    • Is a company car needed to attract talent?
    • Does the HR policy for recruitment need to change? – Gen-Z/iGen tend to not drive as much nor even have a driving licence.
    • Check that the car scheme is an incentive for all – some might view having a car as a disincentive (as they do not wish to have one). 
  • To achieve zero emissions, a mobility solution should sit alongside an EV strategy so include decarbonisation into the discussions.
  • In order to achieve full engagement, mobility schemes should be cost effective for both employer and employee.
  • Educate the group on tax elements if not known (Benefit in Kind, NI, PAYE, etc)
  • Ensure insurance amendments are included within your thinking (amendments to motor, travel, personnel insurances).
  • Think about hidden costs:
    • Rideshare can increase productivity where parking is an issue. 
    • The cost of parking is not transparent in travel bookings, especially train station parking, so cost per mile for all the data would be a great way to get better insights.
    • The cost of vehicle hire varies wildly if booked direct, through a lease co or via the travel management company, as does the length of the hire (micro, daily and long term). Check vehicle hire groups being booked; could a smaller lower cost group suffice?
    • Evaluate vehicle hire spend beyond just a daily rate and base it on a total rental cost including ancillary charges. Check your ancillary costs on vehicle hire particularly around collection & delivery, refuelling charges, one-way rentals, out of hours and premium location charges (airports).
    • Trips to and from the office. Is it more effective to offer car club/pool vehicles?
    • Ensure existing spare/pool fleet vehicles are recycled and utilised instead of using vehicle hire. Do a thorough review and optimise your pooled vehicle solutions – rather than it being an area of surplus vehicles.
  • Ensure you do not try to do everything above all at once – structure this output and dialogue over a few meetings!

Profiling/Segmentation.

A tip for this topic is to walk in your employee’s shoes. 

ScooterEmployees within our organisation have differing needs and wants from a fleet/mobility scheme. There are various profiles that you can look at in order to see the likely uptake of any mobility solutions you will be providing.

The different types of employee profiles by area are:

  • Urban/city-based employees v those in rural locations. Urbanites will have far more options for alternative forms of transport and, arguably keener to move to a mobility offering, especially those where parking is at a premium.
  • iGen v Gen X and Baby Boomers. Depending on the generations, there will be different abilities of dealing with technology and the desire for a flexible approach to ownership. 
  • Driveways v kerbside parking. Those without car parking in front of their homes, especially those who have to pay to park their car.
  • Multiple car households. Those 2nd & 3rd car families who can run on fewer vehicles with little or no impact to their ability to be able to use a vehicle for business trips.
  • Low v high mileage drivers. Those on very low business & commute miles or simply living very close to their office (post COVID maybe even not needing to commute). Include here, employees with low instances of business travel (number of trips made) also. 

Under this segmentation, those employee profiles that would be keener to move to a mobility solution tend to be:

  • iGen employees, especially those who may not have a driving licence
  • Cash allowance takers
  • City dwellers with good local infrastructure
  • Job functions that do not have many business trips every year 
  • Multiple car families

THIRD STEP – THE PLAN.

Now this step is the real challenge – and the question really is: do you wish to change your business organically or fundamentally revolutionise your business’ fleet and travel solutions. There are various ways to add a mobility solution to your business – it could even be sensible to offer this on the region’s ability to be able to service such a solution – i.e. are the products & services available in this area or does the size of the (mega) city make it possible to deploy a mobility solution?

Option One – Simple Offering

This option is really great to just get things started on your road to mobility and can be delivered easily alongside your current fleet & travel programmes before your step up a gear.

Our advice on this starting point is to gradually launch to your employees more flexible options for them to travel. This can include the launch of car clubs, lift-sharing, walking, scooting and cycling as alternative forms of travel instead of always travelling in a car.

car rentalThe fundamental change here is for your Cash Allowance Policy. Typically, most Cash Allowance Policies within organisations require the employee to own a vehicle of up to a particular age (normally the maximum age is five – eight years old). It would be worth changing this policy to allow an employee not to need to run a permanent car but commit to have use of a fit-for-purpose vehicle for business trips – this could include the use of a 2nd car in the family, renting a car or taking alternate forms of transport at their cost (not yours, as you are still giving the employee a cash allowance). 

Of course, from an occupational road risk perspective, the driver still needs to be compliant within your policies for driving (unless there is no car driving at all – and in these cases we would recommend the employee signs a declaration stating they do not drive for business and are excluded from being able to make any mileage claims).

Option Two – Base Offering 

This option is a bit more complex to deploy and could be classed as the next stage of your mobility offering if you have implemented option 1, the ‘simple model’.

There is a good argument to rename the Cash Allowance as a Mobility Allowance which can be offered to the employee as an alternative to taking the cash as a Car Allowance – especially when the employee does not wish to even own a vehicle and/or have the associated costs such as parking.

What are we offering in this instance?

A Mobility Allowance will sit alongside a Cash (Car) Allowance scheme. The employee chooses which one they would like based on whether they run a permanent vehicle or not, or where they live and travel to.

In this example, the employee’s Mobility Allowance would initially be set on a level of the current spend on 1) Car Lease + associated running costs or the Cash Allowance level + 2) the annual expected travel spend, including business mileage.

Your business will need to make a decision on:

  1. If the employee spends up to or exceeds their annual Mobility Allowance – do they cap or allow the allowance to be overspent?
  2. If the employee underspends their allowance, can they take this as additional gross pay?
  3. If they have any intentional or unintentional personal/private spend on the Mobility Allowance, should this be deducted from payroll?

Spend Monitoring systems will need to be deployed for both the business and employee, in order from them to accurately manage and see their mobility spend.

Option Three – Advanced Offering (All Employee Launch)

This is where the Company Car and Cash Allowance scheme is removed altogether and all employees are moved to a full Mobility Allowance Scheme.

Each employee is given an annual mobility allowance that pays for their car lease (if they have one), their business fuel/charging and all their travel costs.

SoftwareThe employee reviews and manages their own spend via a Mobility Platform which needs to tie together the data of all trips (total costs and mileage) and is visible to the employee. Any booking system can either be a mobility provider or your current Travel Management Company (TMC) combined with your current travel payment solution (T&E card).

A further permutation here is for any Mobility Allowance to be split between travel and fleet if they have a leased car. This way, the employee only has visibility of their travel & T&E spend against their allowance via the expense platform and the leasing cost element is excluded from your Mobility Programme – which might be easier to deploy.

Within this option, it is possible to deploy a limited approach where the Mobility Allowance would only be offered to employees in regions where such a solution will work – for example in a mega city, like London or a developed city, like Coventry (this also applies across the globe too, as you could start in the Netherlands for example).

This will then start with a localised evolution (region by region, country by country, employee type) but always lead in the ‘advanced’ (connected) regions.

That said, be careful to ensure there is still consistency of offering to employees and do not set up a patchwork quilt of suppliers!

The below chart summarises the three options for deployment:

SIMPLE

BASE

ADVANCED

Product

Launch flexible options – car clubs, liftshare, walking, scooting and cycling as different forms of travel

Option to swap Car Allowance to Mobility Allowance

No car allowance, only Mobility Allowance offered to all employees (includes an option for a car)

Policy

Discourage employees from running a fixed car if taking an allowance

Run both car & mobility schemes, employee can have either option

Mobility offering only

Occupational Road risk

Employee still needs to be compliant for driving unless no travel via a car

Employee still needs to be compliant for driving unless no travel via a car

Employee still needs to be compliant for driving unless no travel via a car

IT solution

N/A

Optional

Employee Mobility booking solution for travel would be recommended

Data solution

Not required

Integration of vehicle costs (company car) and expenses by employee would be recommended

Integration of vehicle costs (company car) and expenses by employee would be recommended

Payment solution

Not required

Desirable to offer mobility employees with a company payment card for their travel

Employee needs a company payment mechanism

Who pays?

Employee takes the full allowance, runs no car but pays all their travel costs themselves

Optional. Either company or employee claims their out-of-pocket expenses

Employer pays for all travel and deducts any private costs from salary

Areas to think about

Allowance levels per month will drive the behaviour you wish to see

Offer only to employees who live in areas where it will work or for all employees?

SUMMARY

The move to mobility is not a daunting one. If planned and prepared fully, it can be very straightforward.

Of course, there is a lot of data analysis, employee engagement and internal functional alignment to be done but thereafter, it is very much management.

Our roadmap, as laid out in this document, is a guide of what is possible for fleet and travel managers to deploy. Moving from option 1, through to option 2 and finally to total mobility in option 3 is a sensible deployment plan.

However, each business is different. Employees have differing objectives and each company has differing cultures and reasons for their particular current fleet and travel policies, so one method will never fit all.

All the best with your (mobility) journey!

This document has been created by: The AFP Future Mobility Steering Committee. If you have any questions about this topic or want to know more, please get in touch with administration@theafp.co.uk