What Is a Hybrid Vehicle Program and When Does It Make Sense for Your Business?

Hybrid Vehicle Programs 101

 

What is a hybrid vehicle program?

Simply put – a hybrid vehicle program is a program that brings all of your mobile employees together under one consistent system of record. It’s designed to enhance visibility and control expenses. How? By effectively prescribing mobile employees to the appropriate reimbursement method, best suited to their needs.

A hybrid vehicle program is defined by a company’s policy and informed by an employee’s job function. It’s a combination of any of these four types of programs: cents-per-mile rate reimbursement, car allowance, personalized mileage reimbursement and company-provided cars.

What are the primary goals of a hybrid vehicle program?

  • Enhance transparency, accuracy and compliance
  • Simplify management and reduce redundancies
  • Continuous, actionable insights to dynamically manage expense, risk, safety

How do companies benefit from a hybrid vehicle program?

  • Unite programs to provide data, surface insights and make informed decisions
  • Visibility and control allow for benchmarking, goal setting and long-term success
  • Consistency and transparency foster cultural alignment, increase adoption and accountability

When does a hybrid vehicle program make sense?

If you’re like most businesses, not all of your employees have the same job. And if your workforce isn’t uniform, how often your employees drive for work probably isn’t uniform either. Your business likely needs to implement a hybrid vehicle program, but you might not have considered this solution before. Why? It’s likely because you currently have no ability to marry the data or understand the “full picture.”

Let’s walk through a few examples of when a hybrid vehicle program is the best choice for businesses and their mobile employees.

Scenario 1: Medium-sized Pharmaceuticals company

“We have regional salespeople who receive company-provided cars and executives that drive to meetings and the airport several times a month. These executives receive $1K as a monthly allowance.” 

Scenario 2: Fortune 500 consumer products company

“We have regional salespeople and executives that receive company-provided cars, and for our in-store employees/marketing team, we reimburse a cents-per-mile rate. We also give our Account Managers $600 as a monthly allowance.”

  • Mobile workforce: mobile app mileage capture (GPS-verified mileage logs), MVRs, driver safety training
  • Sales: personal use chargebacks, and reimburse lower mileage mobile employees with a Fixed and Variable Rate (FAVR)
  • Executives: reimburse a cents-per-mile rate or offer a car allowance, require insurance verification
  • Account Managers: reimburse a cents-per-mile rate or FAVR (depending on how far they drive), require insurance verification

Here’s a simple test to gauge if a hybrid vehicle program makes sense for you.

In the chart below, if more than one of the employee personas match your workforce, you should consider a hybrid approach to vehicle reimbursement.

The Bottom Line

The bottom line is that business leaders have a choice in the methods and tools they use to manage their mobile workforce and line item expense for mileage reimbursement. Depending on the situation, most of the options are reasonable to varying degrees, so long as they are administered effectively with technology, data and business intelligence.

Interested in evaluating a hybrid vehicle program? Reach out to us! We’d be happy to help you figure out what type of program meets your business-specific needs.

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The Author

David Lewis

David is charged with defining, analyzing and executing on opportunities that drive growth. He is a keen collaborator with a passion for innovation and ingenuity. David’s path to Motus includes investment banking, sales, entrepreneurship, small business management and a Columbia MBA.

Read more by David Lewis

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