Employers have two options for providing for their mobile workers: offering company-provided vehicles (fleets) or reimbursing employees for the business use of their personal vehicles. While both programs offer many distinct benefits, there are times when offering company vehicles makes the most sense. Below, we take a look at the most common reasons companies choose to incorporate fleet into their vehicle programs.
Fleet vehicles can be an appealing option for employers that need to provide transportation for specific functions. These include service trucks, vans, delivery vehicles or those with other equipment requirements.
Having a fleet of company cars or trucks will ensure that the specialized transportation needs of workers will be met. The more specific the type of vehicle needed, the stronger the case for providing a company car. Just imagine an electrician or carpenter trying to work out of a Prius. UPS, AT&T, Comcast, FedEx, and many others rely on fleet vehicles for this reason.
With company provided vehicle programs, employers have full control over the vehicles that employees drive. They own and manage every fleet vehicle. This means they also manage employees’ insurance coverage and the upkeep of the company cars. They are able to choose vehicle safety features that their company finds important. Companies can also require installed telematics to gain 24/7 insight into where their vehicles are located and are being driven. Good luck convincing an employee to install equipment in their own car that gives their employer visibility into where they are, on and off the clock.
Mobile workforce managers also choose to use company cars for branding reasons. Employers can influence the perception of their brand. The specific vehicle type, make and model they choose can define corporate identity they want represented. Mobile workers then uphold and extend that image while driving the fleet vehicle to meetings. For example, some companies find it highly important for their mobile workers to appear respectable, but not too flashy. Businesses uphold this image by providing all mobile workers with a standard, mid-level sedan.
Other companies leverage fleet vehicles as a way to advertise their brand while employees perform their daily duties. Xfinity, for example, displays their company name and logo on their service vehicles. This drives brand awareness as their mobile workers drive door to door.
Many employees appreciate the flexibility they gain through personal vehicle reimbursement. But some companies find that providing fleet vehicles helps with recruiting and retention in their industry. Fleet vehicles can provide an important tool in the recruiting process if the employee doesn’t already own a work-appropriate car or if he or she prefers not to use their personal vehicle for work. In some professions, providing a company car is seen as an industry standard, and employers should consider this when evaluating their vehicle program options.
It’s easy to see why some companies want or even need to provide company vehicles, but choosing to offer a fleet program is not the final decision that needs to be made. Companies must also decide whether their fleet program primarily serves as an employee perk or whether its main objective is to provide for employees’ business-related transportation needs. Employers can choose to allow personal use of company vehicles with both options. However, those whose goal is to provide a business tool, rather than a perk, should leverage personal use chargebacks to ensure a cost-effective program.
Personal use chargebacks allow companies to reduce fleet expenses by recovering the costs associated with employees’ personal use of vehicles. In the past, administering fair personal use chargebacks was a daunting task for employers, as it required manually calculating the numerous costs each employee incurs when driving. As a result, many organizations that do charge for personal use charge all employees the same amount each month, regardless of their local costs or how many non-business miles they drive (doesn’t seem fair, does it?). Technology for the mobile workforce has evolved over recent years and today allows employers to easily calculate the personal use costs for each individual employee. With this technology, companies can ensure that their fleet programs remain cost effective while still meeting their business and cultural needs.