FleetSpeak

You Don’t Need That Car!

May 12, 2014

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About a year ago, after attending an industry meeting about car sharing technologies, I sat down and calculated how much it cost me to own my car. I came up with $23 per day to own and operate my car — and I own an inexpensive, fuel-efficient compact sedan. That includes monthly payments, insurance, gas, and oil changes, but excluding all other maintenance and repairs and occasional parking costs.

This makes me think: Considering the cost, why would you want to keep a car if it’s not needed? Translating this to fleet, why are user departments hesitant to give up their underutilized vehicles?

Why Not Pool Vehicles?
I often hear about studies saying there are underutilized or excess fleet vehicles that should be removed or pooled. But fleet managers say user departments want to keep those vehicles for themselves.

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Jim Wright, CEO of Fleet Counselor Services and associate director of the Government Fleet Management Alliance, says this is a battle he fights constantly in his consulting work. He says the main reason user departments want to keep their vehicles is they’re afraid the motor pool vehicles won’t be available when they need it.

It’s up to the fleet manager to manage a balance between high utilization of motor pool vehicles and a good availability rate. An effective motor pool is one where vehicles are available for users, but in a bind, there are other options, such as using a personal vehicle or a car rental company.

The other issue is ownership. Depending on the public agency, the user department may own the car, or the fleet may own it. In the case of the former, the user department may say, “I own it, so I’m going to do with it what I want,” Wright says.

Another reason may be in motor pool location. If the vehicles are located three blocks away at the City Hall, it may be inconvenient to have staff walk there to pick it up. If it’s further away, they might need to drive there.

The solution to this is see how often drivers need to check out vehicles and how much staff time is devoted to picking them up, Wright said. If it’s too much time and demand is high, the fleet manager can set up a remote motor pool location closer to where employees work.

Lastly, it might even be because the department head thinks employees are using the vehicles more than they actually are. This might happen if there is a group of 15 vehicles and while the majority are used every day, a few are used infrequently.

Tracking technology can help fleet managers determine if and how often the vehicles are used.

It’s more convenient for employees to keep fleet vehicles assigned to their departments, but necessity, not convenience, should dictate whether a car is kept as an assigned vehicle. Specialty, seasonal, and emergency vehicles, as well as off-road equipment, are needed. However, you should assess passenger vehicles for need and usage.

What’s the Cost?
Utilization tracking can be done through various technologies and methods, and you can set the minimum mileage threshold as you see fit. Cost might be the best thing you can show a department head — that is, how much does that vehicle cost the department monthly or annually, and is it worth it if utilization is low? If the cost is high enough and utilization is low enough, this would be a hard argument to go against.

After I conducted my very unscientific cost-per-day vehicle analysis, I immediately started daydreaming about the vacations I’d take if I could only get rid of my car. Unfortunately, this isn’t possible since I use my car every day, but if I lived closer to work and there were a couple of Zipcars in my neighborhood, I would seriously consider reducing our family fleet down to one.

What other reasons have you heard from user departments wanting to keep their passenger vehicles? How have you convinced them they don’t need those cars?

Comments

  1. 1. Allen Mitchell [ May 12, 2014 @ 07:07PM ]

    Thi,

    I agree with the gist of your remarks on utilization. However my experience has shown me that trimming the fleet or reallocation of fleet assets is rarely a simple and logical endeavor. Whether vehicle assignments are reviewed in private or public fleets, the primary impediments involve things like individual perks, politics, the fear of losing a business tool or having less access to pooled assets.

    Often the fleet manager does not have the clout to implement stringent controls on use of assets. Many senior managers/directors will attempt to derail efforts that may cost them control of these operational tools. Policies need to be written by the fleet manager or collaboratively with the fleet manager and a consultant that is well versed in utilization issues (right-sizing) and adopted by top management after discussion with all of the impacted managers before implementation begins if the fleet manager is to be successful.

    The first step is establishing use standards for the various types of fleet assets. A robust fleet information system is required in order to obtain the data for setting standards, especially in larger and more complex vehicle fleets. Mileages, use hours, costs and departmental missions should be factored into the decision making process.

    Once the data have been collected and analyzed, the next task is to parse the information into organizational units and discuss the findings and conclusions with affected managers. After reviewing this information with all parties, they should be allowed to review the statistically underutilized vehicles to determine which ones can be reallocated or sold to improve fleet cost-effectiveness. Then the fleet manager/consultant should compile possible tiers of savings for each department and report the results to top management for a final decision.

    Of course, the fleet right-sizing decision might be dictated from top management from the
    start, but I have found that they are often reluctant to require this of their direct reports.

    When the utilization review is done regularly it will become easier to get managers to comply. It is also most helpful when top management delegates the authority to the fleet manager via
    policy to develop the standards and implement them.

    When all of this is done with collaboration rather than arbitrary mandates, the chances are one will be successful.

  2. 2. Dennis Hogan [ May 14, 2014 @ 01:08PM ]

    Managing the utilization and perceived need for vehicles especially sedans has and will continue to be a bit of a tussle. Your customer service instincts are to do what you can for your customer and maintain the customer service levels you have worked to achieve. The business process manager in you says if the unit is not being fully utilized it is a burden on your overall fleet utilization. Our most powerful tool is data the pure fuel and usage data that should be available in any modern day fleet. I agree with Allen’s assessment that they are times that data or not your efforts can be derailed, for whatever reason, but my job is to make sure you are aware of the consequences of keeping that “have to have” vehicle.
    My experience tells me that there will come a time when someone will ask the question, “why does my fleet cost so much” that is the point in time where I provide the data outlining the total cost of the vehicle that they just “cannot live without”
    Just my two cents......

  3. 3. Tara Merrifield [ May 15, 2014 @ 05:41AM ]

    We have faced this exact problem in our fleet along with the reverse from legislators and taxpayers - "Why do you need any vehicles at all?". We spend a lot of time on education of internal agencies and the general public. We try to teach them about our optimal costs and that it's not only about the number of vehicles but how they are being utilized. Our goal is "the right people in the right vehicles." If we have a driver who primarily commutes but hits the minimum mileage thresholds that is still inefficient for our opperations. We try to ensure vehicles are assigned to drivers who primarily use the asset in support of their business function, not as a perk.

  4. 4. Steve Kibler [ May 27, 2014 @ 07:18AM ]

    Thi, a good and timely article. Utilization management may possibly be a fleet manager's most Omni-present nemesis. Every customer reaction mentioned above is emotion based, not need based. In this business, fear and negligent entrustment are not virtues in our customers, they are the standard culture. I learned years ago how to apply Will Roger type tack: “the ability to say nice doggy, until you can find a big rock...” Unfortunately, I’ve now been labeled an animal hater by my customers.

  5. 5. Rick Hilmer [ August 25, 2014 @ 12:11PM ]

    This is always a pertinent topic in fleet... one factor that can never be ignored, is diificult to quantify and tough to overcome is the sense of entitlement that a vehicle is assigned to a job title regardless of actual need. Often these expectations were established years ago and the identification of such underutilized vehicles as unnecessary can elicit an emotional response. A reality in fleet is that our experience lends us to view vehicles as tools to be matched to need and necessity while many of our customers see them as emblematic of the value that the organization places upon them personally. Fleet Managers need to keep in mind that these kinds of conversations are frequently taking place on two entirely different levels of consciousness.
    One tactic we are using in our fleet reduction / motor pool expansion is to make the motor pool vehicles the newest / best equipped in the fleet.

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Author Bio

Thi Dao

Executive Editor

Thi is the executive editor of Government Fleet magazine. She is interested in alternative fuel technologies.

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