Mobility: Cut costs and CO2 with the right mobility choices

Choosing the right method of transport for employees on business has many benefits for a fleet: cost and CO2 emissions can be reduced, while staff safety can be improved too. However, the ever-broadening scope of transport options gives fleet managers more to consider than ever before.

“Today, mobility for businesses and their employees is  no longer merely about company cars, rental vehicles and their financing,” says Kit Wisdom, head of corporate mobility at Alphabet.

“It’s about providing a wide range of options for going from A to B, and optimising the total cost of mobility.”

Traditionally, company cars have been the automatic option for the vast majority of business journeys, and this is still the case for a surprising number of companies, says Tim Anderson, senior transport advice manager at the Energy Saving Trust (EST).

“Employees often start by saying they want a car, and it’s amazing how many companies are still led by a desire to give vehicles and have a vehicle-based policy,” he says.

“That’s fine to an extent, but with the growth of alternative fuels and the increasing choice of transport methods, it’s started to become a lot more complicated.

“People need to approach it as a mobility planning solution rather than simply provide a car that an employee wants.”

Before deciding on a mode of transport for business travel, fleets need to consider a range of issues, says Chris Chandler, principal consultant, fleet consultancy, at Lex Autolease.

“The most important factors in choosing a mode of transport for carrying out business mileage would typically be cost, efficiency and practicality,” he adds.

“A proactive mobility policy will identify the best option available for travel based on these areas and then mandate or recommend the travel method that best meets these factors. We carry out mobility analysis modelling through our fleet consultancy team to help formulate travel policies identifying the most cost-effective and efficient transport options. These include allocated company cars, pool vehicles and daily rentals, and consideration can also be given to public transport, all of which have various benefits depending on the journey.

“This is done through analysis of mileage carried out, frequency and journey types in order to determine the most cost-effective method for the customer  in question.

“We also consider practicality, which is important as a customer may save a small amount financially on their travel by using a daily rental rather than taking public transport, for example, but, if this has an adverse effect on logistics and convenience for the wider business, we may advise a different method.”

Andrew Benfield, group director of transport at EST, adds: “The basic travel hierarchy we propose is: drive less miles, drive the most energy efficient vehicle and drive it as efficiently as possible. If you do all those three you will be reducing energy use, emissions and costs.”

The organisation advises companies to first consider tele- or video-conferencing before travelling.

“This is a standard recommendation we would make to any organisation working over long distances; it is certainly worthwhile for internal communication,” says Anderson.

“It won’t replace every business trip and video conferencing doesn’t always work perfectly in every situation, but for a lot of meetings companies could use systems such as Lync or Skype where the cost is minimal. That can replace the need for a car journey full-stop.”

For short journeys, EST advocates either walking or encouraging staff to use bicycles. Camden Council does this by providing a £250 lump sum for essential cycle users and 25 pence per mile for casual cycle users.

The authority provides 36 pool bikes for use by its employees, with folding bikes based at two locations where storage space is limited. Pannier bags are supplied to enable staff to transport any equipment.

For longer journeys or inter-city travel, Transport for London  (TfL) feels fleets should promote public transport, while trains should be chosen ahead of planes.

“As train travel is less carbon intensive than travelling by plane, many organisations now implement a ban on all short-haul flights where an equivalent journey by train of less than six hours is available,” says a TfL spokesman.

“Unless a business specific reason deems air travel essential, trains often provide a greater opportunity to work compared to the combined airport and flight experience which can equal or exceed the train journey.”

He adds: “Bear in mind the benefits of using public transport, for example, being able to use the time productively (many long distance trains now provide wi-fi) or simply to take a break between meetings.”

However, ACFO says it is important for fleets looking to  use public transport to consider how the employee will  travel to and from, for example, the railway station at both ends of the journey and how much this will cost in potential taxi fares.

Many non-company car drivers consider that using their own vehicles on business is, more often than not, the most convenient method of travel.

However, this is discouraged by many fleet companies, due to cost, duty of care and CO2 emissions.

Traditionally, companies may use daily rental vehicles to replace the grey fleet, but more are using pool cars, corporate car sharing and car clubs instead.

Pool vehicles are typically leased or bought by a business as ‘spare cars’ and they are then used by employees when they need to make a business journey.

Car clubs provide employers with a self-service – but fully managed – car or van pool which is located in dedicated parking bays either on-street or within an organisation’s car park or site.

Corporate car sharing schemes, on the other hand, such as Alphabet’s AlphaCity, allow multiple drivers from a company access to a range of cars through an electronic card system.

This plethora of options makes travel decisions more difficult than ever, as there is no ‘one-size-fits-all’ solution which suits all companies.

“Business mobility is a balancing act with no ‘right answers’ and many variables that all have to be considered and managed,” says John Pryor, chairman of ACFO.

“Employee welfare is also essential, so organisations must consider whether lone workers should be allowed to travel early in the morning or late at night,” adds an ACFO spokesman.

“Ultimately, organisations that want to optimise mobility solutions must take a flexible approach that mixes a wide cross-section of options while stressing to employees and their line managers the multitude of variables that must be considered in making the final travel decision.”

Case study: corporate car sharing

Grundfos Pumps has cut its daily rental spend by 42% after introducing Alphabet’s corporate car-sharing solution, AlphaCity.

It introduced AlphaCity in November 2013 and has since decreased its daily rental spend by more than £5,000, enhanced visibility of when and where the car is being used at  any given time, and improved its  environmental footprint.

Grundfos employees now use a BMW 3-Series, equipped with AlphaCity corporate car-sharing technology, for the majority of business journeys. The vehicle remains on site at Grundfos’s Leighton Buzzard headquarters, providing multiple drivers with round-the-clock access through an electronic card system. Employees check availability, book the vehicle online and are ready to drive. Grundfos no longer has to worry about the physical management of the vehicle’s keys, booking process or compliance with associated health and safety and financial legislation. 

Jason Funnell, operations director at Grundfos Pumps, says: “Previously, we were dependent on rental vehicles, which were not only time-intensive to manage, but there was no guarantee that the vehicle would be environmentally friendly.

“Also, due to the timing of business journeys, more often than not vehicles had to be delivered a day in advance and returned a day after, tripling costs unnecessarily.”

He says there is potential for expansion of the car sharing initiative, with the introduction of further cars at other Grundfos locations in Birmingham, Leigh and Livingston.

Case study: car sharing and rental

Aylesbury Vale District Council (AVDC) will save an estimated £100,000 a year after introducing a car sharing and rental programme following an in-depth analysis of its grey fleet spend and usage.

Nine low emission vehicles provided by Enterprise Rent-A-Car are now used by staff travelling on council business.

Making this switch will also  significantly reduce the authority’s carbon footprint, says the council.

By analysing the data from council business trips undertaken in employees’ own cars, Enterprise determined that 81% of those  journeys were shorter than 50 miles and 71% of trips lasted for fewer  than four hours.

In addition, the most common  reason these employees didn’t use public transport instead was the lack of a train station near their intended destination, so an alternative to private vehicles was essential.

As a result of this analysis, the council has introduced nine Enterprise CarShare cars as a virtual pool car fleet – two of which are electric  vehicles – to cover the organisation’s shorter business trips.

It has also provided employees  with access to Enterprise’s online technology so they can hire vehicles on a daily basis for longer journeys.

All AVDC employees are now required to use the new rental and CarShare vehicles rather than their own cars for work journeys.

Case study: car club

Croydon Council reduced its grey fleet costs by £500,000 and reduced CO2 emissions by 138 tonnes a year after working with Zipcar to introduce a car club.

Before the London authority entered into the partnership with Zipcar, the authority’s staff were running a large grey fleet of  vehicles with varied emissions and  environmental impact.

These vehicles were travelling more than 1.1 million miles on business each year, emitting 345 tonnes of CO2.

They were also occupying space and management time with staff issues over parking spaces.

The council aimed to reduce its essential user scheme and improve its environmental impact and, over a two-year period, it entered a partnership to manage car club cars as pool cars.

By the end of this period, the council had reduced business miles by 48% to 642,000, cut the cost of car travel by 64% to £472,000, and reduced CO2 emissions to 207 tonnes per year.

As all car club vehicles are booked through Zipcar, it means  that council staff are no longer involved in fleet management issues of these vehicles and  there are fewer line  management issues to negotiate around car use.

The scheme now provides exclusive use of 23 vehicles to council employees from 8am to 6pm, Monday to Friday. Outside these hours, the vehicles are available to Zipcar members in the Borough of Croydon.