Rivus restructure cuts garage network by more than half

Rivus has announced a major restructure in an effort to cut costs after struggling to replace business lost from losing a fleet maintenance deal with BT Group.

The company confirmed to Fleet News that it will be closing 48 of its light commercial vehicle (LCV) garages, cutting its existing network by more than half, from 78 to just 30 sites including its heavy goods vehicle (HGV) network.

The decision to close so many of its garages, it said, was to reduce a “heavy cost base” relating to legacy business systems, ageing garage facilities, and a “complex people structure”.

While maintaining a reduced network in what it described as “strategic locations”, Rivus said that some in the Greater London area will become dedicated to solely providing mission-critical service, maintenance, and repair (SMR) services to the Metropolitan Police Service from November 1.

There will be a further two garages opened later this year to support the delivery of the Met Police contract.

Rivus’ mobile services and HGV businesses are unaffected by the restructure, it said.

Rivus did not confirm how many jobs were at risk in its LCV business but told Fleet News that a "significant number" of affected elmpoyees will be in scope to transfer under employment law to BT Group's new fleet providers, with a further number in scope for the Rivus restructuring programme.

Its priority, it said, was to finalise these details with BT Group’s new providers, the trade unions and its employees before sharing any information outside of Rivus. 

Victoria Knight, CEO of Rivus, said: “We are still confident in our ability to backfill the volume of work necessary to replace the BT contract. However, time is a key factor here and without committed continuity of work across the network, we have had to make some difficult decisions."

She explained: “Unfortunately, replacing the volume of work through our garage network is only part of the problem we face.

“Our legacy cost base restricts our ability to remain financially viable in the medium term. If we act now, it means we can restructure in a way that protects the financial interests of our colleagues and supports our existing customers with offboarding their critical fleets as smoothly as possible.”

She added: “This has by no means been an easy decision for the board to make, but doing the right thing for our colleagues and customers is our absolute priority.”

However, one irate customer, who wished to remain anonymous, said: "They told us they were going on a changing journey and that giving up the BT business would be something that unleashes their potential, but then they take this type of action and close a load of sites.”

He added: "It's worrying for our industry because Rivus did a good job in a difficult space."

BT Group's exit

BT Group announced in March that Holman had been awarded the contract to maintain its commercial vehicle fleet, while it would be transferring the management of its company cars to Arval UK, ending its long-standing relationship with Rivus from September 30.

The telecoms giant operates a fleet of around 41,000 vehicles, the majority of which are LCVs.

Private equity company Aurelius acquired Rivus, formerly BT Fleet Solutions, from BT Group in 2019. 

BT Fleet Solutions, which was formed in 2002, had been transformed from an in-house fleet provider into a successful business, which was recognised as a leader in the fleet industry.

“We remain confident that our customer offering is strong and is attractive to the marketplace,” Victoria Knight, Rivus

Following the loss of the BT Group contract, Rivus told Fleet News in April that it was in a strong position to take on the challenge of replacing the hole left by BT Group's exit.

Knight said at the time that its over-reliance on one customer wasn’t good, while the loss of the contract would create much needed capacity in the network that would allow the company to “diversify” the “breadth and depth” of the customer base.

New deals have been struck. In March, it announced that the Metropolitan Police Service (MPS) had awarded multiple maintenance and repair contracts to Rivus starting from November 1, 2023, while gas network company, SGN, also awarded Rivus the fleet management contract for its 1,700 commercial vehicles in April. 

In May, it also announced it would continue to provide service, maintenance and repair (SMR) for the Department for Environment Food and Rural Affairs' 1,500-strong fleet of commercial vehicles.

Defra Group Fleet Services (DGFS) renewed its multi-million-pound annual SMR contract with Rivus following a competitive tender process.

Key to re-securing the Defra contract was the network of 78 independently owned garages capable of servicing LCV and HGV fleets.

Knight stressed that the changes would help the business to continue to be successful in the future.

“We remain confident that our customer offering is strong and is attractive to the marketplace,” she said. “This is clear from the number of sizeable fleet operators that have stepped forward to talk to us since the announcement that we will no longer be managing the BT fleet through our garage network."

She concluded: “Once the LCV restructure is complete, we will grow organically again with a more agile business model and a leaner overhead structure, improving our ability to deliver innovative SMR services to mission-critical fleets across the UK.”