The emergence of flexible mobility is promising convenient, cost-effective and environmentally friendly alternatives to the traditional fleet. Alex Grant finds out how well today’s services stack up for business users.

Reports of the demise of private transport are, it seems, exaggerated. Department for Transport data shows British motorists are travelling 50% further annually than they were 45 years ago, with the majority of business mileage and journeys still undertaken in cars and vans – almost unchanged during the last decade. Despite growing concerns about climate change, drivers are as unwilling to reduce vehicle usage today as they were in 2011, when the DfT started asking them.

So it’s no surprise that the UK’s vehicle parc is growing. Standing at 38.2 million licensed vehicles in Q4 2018, there are 10.6 million more (+39%) on the roads than 20 years ago, with cars (+8.2m) and light commercial vehicles (+1.7m) accounting for the majority of that increase. Nor is it surprising to discover delays per mile are growing steadily as the vehicle population rises. Traffic data analytical company INRIX claims congestion cost the UK almost £8bn in 2018 – an average of £1,317 per driver.

The problem isn’t new, but the often-hyped potential solution is an emerging one; a suite of flexible, seamless, multi-modal mobility. Intelligent travel solutions which offer an alternative to vehicle ownership, claiming to cut congestion, improve air quality and boost productivity. The UK Government has earmarked £90m to establish four ‘Future Mobility Zones’, piloting solutions with end-users, and outlined medium-term plans to cut dependence on cars and vans in a strategic report earlier this year. Consumers are already familiar with ‘on-demand’ services; now could be the time for fleets to take notice.

Mobility as a Service

Multi-modal route planning smartphone apps are becoming more popular

For business or private travel, convenience is the car’s major selling point. So, alternatives have to be user-friendly to gain traction. Businesses can already encourage employees to use public transport, but these journeys typically include multiple suppliers and complicated route-planning – which is where ‘Mobility as a Service’ (MaaS) steps in.

MaaS brings all available travel modes together. Enabled by widespread connectivity, it offers route-planning via multiple suppliers’ timetables, overlaid with historical and real-time data and requiring only a single payment. According to Yovav Meydad, chief growth and marketing officer at Moovit, a multi-modal route-planning smartphone app, this not only benefits end-users, but offers quicker improvements for cities than investing in road infrastructure.

“A city that offers MaaS to its citizens takes a very active and responsible role in creating a society where car ownership is no longer needed,” he says. “This will result in healthier, safer, cleaner, greener cities that are less congested.”

However, this is in its infancy in the UK. In March, the House of Commons Transport Committee published its response to last year’s call for evidence on how such schemes could be implemented. Local and national government support would, it said, be vital for bringing this data together. ACFO, which was among the organisations that presented evidence, sees mobility as a way for fleets to keep track of how their employees move and for technology to advise on the right method. But, it added, today’s solutions need work.

“ACFO has seen numerous apps, for journey planning and ticket holding, from various business travel agents, as well as apps for recording and the submitting of expenses,” says former chairman, John Pryor. “But the ability of a company to join them together is ‘fairly rare’. Consequently, the support of government towards a more integrated system will help businesses adapt and manage their mobility needs more effectively.”

Matt Dale, head of consultancy at ALD Automotive, which is offering bespoke ‘Mobility Experience’ consultations for businesses looking at travel solutions beyond the traditional fleet, also advises caution. “What we’re seeing is a lot of Mobility-on-Demand. If you scratch Mobility-on-Demand you have taxis and public transport. What we’re seeing with some of these is it’s cheaper to book your own train than it is through the app. We are working towards MaaS, but it’s not there yet.”

New ways of working

Businesses can already encourage employees to use public transport, but these journeys typically include multiple supplier and complicated route planning… Transport alternatives have to be user-friendly to gain traction

The landscape is moving quickly, and nascent technology isn’t an excuse to stand still. Europcar Mobility Group research, conducted last year, showed only 39% of fleet managers review their travel policies annually, while almost 10% said they either don’t review it or don’t know how often they do so. Yet employees’ behaviour as consumers means resistance to change might not be as big as it once was.

“Vehicle travel and the company car is not so engrained in the psyche of younger employees today as it was in yesteryear,” says ICFM director, Peter Eldridge. “Companies could look to set a mobility budget for each employee that will influence the mode of transport they take, based on a range of factors including fitness-for-purpose, cost, convenience and safety. Employees will be able to access travel options via their own portal, make bookings and keep track of their budget.”

So the onus is on operators. The Energy Saving Trust advises organisations to develop a ‘travel hierarchy’ for employees – a flow chart or website outlining the available options, potentially including web conferencing to avoid travelling at all. This not only reduces ad-hoc grey fleet journeys, but it ensures employees are using the most time and cost-efficient modes. Some forward-thinking fleets are negotiating discounts with public transport operators or have mileage policies in place to incentivise drivers out of their cars.

But the UK has a lot to learn, according to Craig Grant, head of mobility services at Alphabet UK: “In the Netherlands and some other European countries, Alphabet provides employees of corporate customers with a ‘mobility budget’, allowing them to choose the mode of mobility that best suits their needs – which could be a car lease, public transport travel card or even a cash payment, if they choose active forms of travel like walking or cycling. But this budget has to cover all their business mobility costs, meaning they can’t then expense a train trip if they’ve spent all of their mobility budget on a company car,” he says.

“Ultimately it comes down to mindset and senior-level buy-in. For those businesses that can align the various stakeholders and get key decision-makers to collaborate, then you can move towards an understanding of your business’s true mobility costs, both in money and in employee time.”

The case for Cars and Vans

It’s worth noting that fleets are well placed to be contributors to the mobility ecosystem rather than just being users

Consumer familiarity with ‘on-demand’ services doesn’t necessarily translate into business use. End-to-end journeys can often be substituted, but multi-stop trips are still problematic, as Peter Golding, managing director of FleetCheck, highlights.

“Our experience of the concept of mobility management is that it is something that is frequently discussed across the industry but that very little is yet happening in the real world,” he says. “This is not to say that we won’t move closer to a mobility model over time, but that businesses don’t seem ready or able to make that move in large numbers at the moment. Everyone can see the potential but the price in terms of infrastructure investment and lost efficiency makes genuine change difficult to achieve.”

It’s a view shared by Ashley Barnett, head of consultancy at Lex Autolease, who says the company’s customer forums haven’t reflected widespread interest in the alternatives yet. Cars and vans might not be the cheapest option, but – particularly outside urban environments – operators are prepared to pay for that convenience, he continues.

“In the context of the country’s full fleet size, it’s difficult to see shared services competing with the practical benefits of having 24/7 access to a private vehicle. While we welcome the introduction of more alternative mobility solutions, we don’t anticipate they will become viable for business users in the short to medium term,” he explains.

In the meantime, operators are taking a more flexible approach to sourcing their fleets, and suppliers are catering for that demand. Europcar Mobility Group now offers a suite spanning from its Europcar One platform, designed to provide access to shared and private hire vehicles and taxis for short-term users, through to Advantage which caters for longer-term car and van needs, without the ties of a traditional lease contract. Both offer an adaptable solution given that uncertain market conditions are driving a rise in grey fleet use.

“I believe the current Benefit-in-Kind tax regime has much to do with this changing trend,” says Peter Crabtree, corporate sales director at Europcar Mobility Group. “It has created an environment where employer control of transport options is diminishing. Where given the choice, more employees are going for ‘cash4car’, and this takes the oversight away from the employer.”

David Brennan, CEO at Nexus Vehicle Rental, has a similar viewpoint. The company says the ability to react quickly to new requirements, or new challenges, is proving desirable. “Ongoing market uncertainty means business customers spanning all industries are increasingly reluctant to invest in depreciating assets and long-term contract hires. Flexible usership, on the other hand, provides a mobility solution that offers some protection in the short and medium term,” he says.

It’s worth noting that fleets are well placed to be contributors to the mobility ecosystem rather than just being users. The Drivy service, for example, allows businesses as well as private individuals to share and make an income from their vehicles when they would otherwise be idle, including keyless handovers via an app. It means those who are still dependent on vehicles can at least contribute to, and benefit from, what is still a developing market.

Fleet management is set to change rapidly over the next decade, as new technologies enable richer data and easier use of alternative travel modes. But, while usage of vehicles will change, tomorrow’s mobility managers are likely to be just as responsible for a fleet of cars as their present-day counterparts.

IN NUMBERS

• 8.2m more cars and 1.7m more commercials than 20 years ago
• Congestion costs the UK almost £8bn in 2018 – an average of £1,317 per driver
• UK Government has earmarked £90m to establish four ‘Future Mobility Zones’