I vividly remember my first company-car. The fleet guy showed up with my brand new shiny Mazda 626, handed me the keys and then proceeded to talk about this feature and that feature - this button and that button. But I didn’t hear a thing. I was too busy waiting for him to go so I could take it for a spin. That ‘new-car-smell’ that I for one had never experienced before. In fact, the car was a good 10 years newer than the family car at the time. Oh and get this, I wasn’t even in Sales! Yes, this was back in the day where the company car was seen a huge perk/employee retention tool and the big push to get promoted had virtually nothing to do with the increase in responsibility and higher salary - No - it was all about that much coveted and elusive company car. It’s all my peers and I talked about!
These days of course, companies have long since cottoned on this ‘perk’ and it’s virtually unheard of in the majority of corporates today to get a company car unless you’re in Sales (or the MD!). But let’s talk about those sales people. Even the busiest - and in this sense we’ll define ‘busiest’ as those doing above average on-site customer visits - are only actually in the car about 20% of their time. And corporates can have literally hundreds of expensive vehicles sitting idle for most of the time.
Enter Corporate Car-sharing. What if instead of every sales person having their ‘own’ car, you had a pool of dedicated but shared cars, available to those staff who needed them - and not just for business purposes? Think for a second about the limited number of meeting rooms in your company - they are a shared resource - you go into your calendar, book one when you need one, free it up when you're done for others to use. So why not the same model with a shared pool of company cars?? Turns out you can!
How does it work
So how does it work? Obviously you’ll need a fleet of cars with the ability to log and send trip details such as odometer readings, fuel level - along with the ability to remotely lock/unlock. You need a booking system for employees to reserve a car - which is usually integrated with their corporate calendar, a fleet management console to onboard members, track usage etc - and of course a mobile app. When booking a car, employees choose type of use (Business or Private). For Business use, the cost is charged to the appropriate cost-centre(s) and for Private use, it’s the employees credit-card. All very straightforward. Companies deciding to implement such a scheme will go to one of the growing number of car-leasing companies or Car-sharing Operators who will provide a turnkey service.
There’s an impressive list of benefits - fleet reduction, fewer car-parking spaces, reduced CO2 footprint (which is becoming so very important), reduced ground transport expenses (taxis, short-term rentals etc). Studies also show that employees using corporate car-sharing schemes use public transport systems more! Instead of 100 cars, you need maybe 60. Right from the get-go that’s a massive saving. And wait, there's more. Many corporate car-sharing schemes open up the fleet to the employees for private use - even employees that don’t even require them for business - for example - taking it for the weekend - or taking it home from time to time. And given that the fleet is almost always new cars, you can see why this would be considered such a perk. Private use is often charged - albeit it a nominal fee - and what was once a pure cost-centre, could become a profit-centre or at least offset some the leasing costs.
Car-sharing has been around for decades but with recent advances in both technology and the telematics space - this convergence has meant that the logistics for managing a corporate car-sharing scheme become very feasible.
Here’s some interesting Frost and Sullivan predictions from 2013 - and I would suspect that they might already be understated:
- The number of providers of corporate car-sharing to go from from 20 to over 30 by 2020
- The number of European companies implementing corporate car-sharing will go from ~200 (2013) to 4,000+ by 2020
- Corporate car-sharing fleets will account for 0.5% of European fleets by 2020 representing just 5.1% of the addressable market - this offers significant upside potential in the market
What’s our perspective in GTS
In Good Travel Software, we’re ready for this exciting new market. Our recently released share.car car-sharing booking platform (click here) supports Traditional, Campus, Residential and of course Corporate. Watch this space for more exciting news in the corporate car-sharing space!