Running a grey fleet can be an excellent way to tick the boxes for a profitable business. If your business mileage is generally low, you’ll reduce operating costs while expanding the fleet at your disposal.
Of course, those benefits can come at a price when handling the complexities of fleet management. But there are ways to minimise any risks and make a grey fleet work for your business…
What is a grey fleet?
Do your company employees drive their own vehicles for your business? Then you’re running a grey fleet. For example, Uber is an obvious example of a business that operates using a grey fleet rather than its own vehicles.
Employees with their own vehicles receive fuel expenses or a cash pay-out when they are used for company business. If this is the case, that also means that those vehicles are now your responsibility as part of your fleet management duties, and you’ll need to check whether they’re fit for purpose.
Is a grey fleet right for your business?
A grey fleet could be the right fit for you if you’re a small business with relatively low business mileage. However, you’ll need to consider a few things before you make your choice:
Your first step is to assess your company’s travel needs, not just at present but into the future. Once you’ve considered all the alternatives and have relatively low business mileage, you may be better off exploring options like renting vehicles or car sharing.
You’ll need to be prepared to manage a grey fleet with the same professionalism as any other fleet of vehicles. That means getting hands-on with servicing, tracking fuel consumption and knowing when MOTs, insurance and road tax are due for renewal.
To make this kind of fleet management work for your business, your employees need to be on board and aware of all the implications. That means having a clear plan about car maintenance, owner compensation, mileage reporting, journey approval, and any legal obligations.
What are the advantages of a grey fleet?
If a grey fleet sounds like the right way to manage your mileage costs, you’ll find there are plenty of advantages:
- First, you can expand your fleet without a substantial financial outlay. It’s a far more affordable practice than investing in company cars that require maintenance and are depreciating assets.
- In addition, if you don’t need vehicles and drivers on a regular basis, a grey fleet can be a valuable resource. You’ll keep operational costs low by only utilising your fleet when necessary. And the chances are that reimbursing your employees for maintenance and mileage is cost-effective compared to running a company-owned fleet of vehicles.
Of course, in order to maximise those cost benefits, you need to know you’re only reimbursing your employees for business miles travelled. As a result, you’ll need to implement proper vehicle tracking and ensure your drivers use the most efficient routes by fitting a commercial sat-nav.
- Finally, owner-drivers are more likely to take better care of their own vehicles and invest in fuel-efficient and environmentally-friendly technologies. In turn, that benefits your business with lower costs for fuel and repairs.
Managing your grey fleet
It’s worth setting out a duty of care policy that explains exactly how you’ll look after your drivers by outlining everyone’s rights and responsibilities in the event of an accident. You’ll also want to set professional standards for your owner-drivers and ensure that their vehicles are appropriately insured and up to date with their MOTs and road tax.