Share and share alike
There’s no getting away from the fact, a “grey fleet” – either pool cars used occasionally or personal vehicles used for business travel – can influence the bottom-line figure on any balance sheet.
Even the newest of these cars, regardless how often they’re driven, incur hefty annual fixed costs. And these expenses – tax, insurance, breakdown cover, maintenance and depreciation – rarely correlate to the amount of use. Plus, where an employee drives their own car, there are underlining issues such as roadworthiness and whether the driver’s insurance is covered for business use.
Ridding a company of the expense of a grey fleet is one thing; replacing it with something as convenient, and less costly, is another. One way to do this is to look at the virtues of joining a car club.
Ever since a trail scheme began in Edinburgh in 1999, car clubs have been steadily growing in popularity and can now be found throughout the UK.
In essence, a car club provides its members with access to a variety of cars and vans on a pay-as-you-drive basis, 24-hours a-day, 365 days a-year. ‘Our research has shown that a grey fleet vehicle, which is driven less than 8000 miles per annum, can, if you add up all of its associated annual expenses – tax, MOT, fuel, servicing, repairs and depreciation – cost a company up £3,500 a year,’ says Chas Ball, chief executive of Carplus, a registered charity established in 2000 to support the development of car clubs and ride-sharing schemes. ‘It’s all about convenience and costs,’ continues Ball, ‘We have played an active role in the introduction and growth of the car club sector in the UK. From a handful of community-led car clubs there are now over 160,000 members with access to over 3000 vehicles in locations across England, Scotland and Wales. And, the advancements in smart phone technology has meant the entire booking process is easier than ever before.’
Without the involvement and endorsement of local councils, any type of car sharing scheme would probably have not found the same take-up rate as they currently experience. The need to reduce heavily congested inner-city roads and rising levels of carbon emissions, has led to many councils entering into successful partnership agreements with car clubs (surveys suggests that each club car removes 24 privately owned cars off the road, and they emit 33% less CO2 than those they replace – in order to qualify for government support, operators of car club schemes are required to use new cars known for high economy and low emissions. With town planners specifically allocating “on-road” parking bays, club car vehicles are now a commonplace sight, many of which are sited in suburban neighbourhoods, away from town centres, for ease of use and accessibility.
Recently, Bolloré, the French company behind the Autolib car hire scheme in Paris, announced they are to provide 3,000 electric rental cars in London under a car sharing scheme.
Drivers will be able to hire the Blue-cars, dubbed the “Boris cars”, and drop them off at any one of thousands of charging points in the Source London system – a city wide electric vehicle charging network. Rental is expected to cost around £5 for a half-hour journey with a £5 per month membership. The first 100 vehicles, which will each have a range of around 150 miles, will be on the streets in March 2015. In addition to the cars, Bolloré are to add thousands more charging points, having won the contract from Transport for London (TfL) to upgrade and extend the electric charg- ing network.
Anyone between the ages of 18 and 75 can apply for membership from one of the main UK car clubs (age restrictions may vary). They must hold a full valid driving licence, held for at least 12 months, and declare any endorsements or convictions, along with insurance claims history at the time of application.
Once accepted as a member, vehicles can be booked by the hour (or half hour) either by telephone or online – the notice required can be as little as a few minutes, or up to 12 months in advance. If the required vehicle is avail- able, then the booking time is confirmed by the call centre (if booking by phone), or by text and/or email and then the vehicle is reserved.
In most cases, vehicles are then accessed from a car station, or designated parking bay, using a smart “proximity” card that, after identifying the member, automatically unlocks the vehicle and initiates the booking. The car or van is then started in the normal manner using an ignition key which will be found inside the vehicle. The smart-card is again used to lock the vehicle at the end of the booking, when the vehicle automatically sends all the user and mileage information back to a central computer for billing. However, unlike a more conventional vehicle rental, where it can be returned to a depot in another city or town, a club car must end up where it started from.
All car clubs have their own set of charges, and most will implement an annual membership fee. For the personal user, these hover around the £50-£60 per annum, with hourly rates from as little as £4, depending on choice of vehicle. For business users, most clubs will negotiate on their member- ship charges. For example, when I phoned-up City Car Club, the UK’s first commercial club and currently running a nationwide network of over 700 vehicles, to enquire about their business rates, they opened-up the batting by offering a £30 per person per annual membership for company employees, with half-hourly tariffs from £2.07 plus VAT (which is the same as their published rates). I was told ‘I could probably get a better deal if I wanted to speak to one of their business managers’.
As with most of these schemes, City Car Club cars are equipped with a fuel card so members simply fill up as normal, handing over the fuel card to the cashier along with the current mileage of the car. The mileage is then charged back to the user. City Car Club current mileage charges are 23p per mile for cars, 29p per mile for vans, and 5p per mile for EVs.
Zipping around town
Zipcars, who presently have cars sited in Bristol, London, Oxford, Cambridge and Maidstone, charge business users an annual account fee of £99, with a £10 set-up fee for each additional driver. Their hourly tariff however, is slightly more expensive, from £4.79 (plus VAT), but it does include the irst 60 miles and the London congestion charge.
The exclusive option…
For business users based outside the loca- tion of a car club, or who simply want the exclusive use of a vehicle, there are Firms such as AlphaCity, a subsidiary of Alphabet (GB), who operates an alternative scheme which allows companies to run their own “closed-group” car sharing programmes.
Kit Wisdom, head of corporate mobility, explains, ‘Vehicles are supplied on a normal fixed-term lease or contract hire agreement, and it can be any vehicle, it doesn’t necessarily have to be a bog standard city car. Thereafter, it works in much the same fashion as the more conventional types of car clubs with fuel, insurance, cleaning and mainte-nance all included in an hourly charge. Bookings and reservations are made online with smartcards allowing access. Onboard telemetry collects data to give a comprehensive overview of the employee’s mobility, reasons for travel, distances, fuel consumptions, dates and times. All costs are then simply reassigned to that employee’s department.
‘Analysis from one of our clients, the Rugby Football Union, who have a fleet of 300 company cars, and currently runs three BMW 116d EfficientDynamics three-door hatchbacks on the AlphaCity scheme, shows they are spending no more than they used to with hire cars.’ Alisha Bird, services executive of the RFU, confirmed Kit Wisdom’s comments, and adds: ‘Our aim was to replace the mix of pool, hire and private vehicles previously used for on-demand travel while also reducing the administration and hassle of managing a grey fleet. We currently have nearly 50 registered users on this scheme with each car covering an average of 3,900 miles per month; a typical trip distance is 170 miles. We have also reduced our fuel bill by £3,000 a year compared with the previous pool car fleet.’
With so many different car sharing options available, together with their ever growing numbers and accessibility, these schemes are positioned to become the ordi-nary, rather than extraordinary. Granted, they are never going to be that magic pill which will solve every problem the fleet manager faces, but nonetheless, if utilised cleverly, they may cure a few headaches.