In Europe, they are asking the question: What is the next evolution of fleet management? A growing number of European fleet professionals believe the concept of “mobility management” will transform the concept of fleet management.
The expectation is that the fleet managers of today will evolve into “mobility managers” in the future. These proponents predict mobility management will produce major structural changes in the European fleet industry over the next 15 years. They foresee an industry-wide move away from traditional fleet management to mobility management. But, what exactly does this mean? The explanation is that instead of companies managing a fleet of vehicles to meet their employees’ mobility needs, the new mobility managers will move beyond asset management to manage a broader suite of mobility and travel options.
The Vanguard of Mobility Management
The concept of mobility management will represent a paradigm shift in fleet management causing employees to accept a mobility allowance instead of a car allowance.
The Netherlands has been at the forefront of the trend to mobility management, as several Dutch-based companies have adopted mobility budgets. The trend is spreading as other companies in France, Belgium, and Sweden are similarly starting to experiment with corporate mobility budgets. Ultimately, the belief is that as the concept of mobility management spreads, companies will transition to operating on the basis of a total cost of mobility (TCM), rather than the traditional total cost of ownership (TCO).
A mobility budget is a financial incentive that stimulates employees to travel in a more sustainable way. It is a fixed monthly budget that an employee can use to pay for all travel costs, regardless of the travel mode used. In this new mobility environment, car allowances will be replaced by mobility allowances, and assessments will be made of the most cost efficient, time efficient, environmentally efficient, and labor efficient ways of making essential business journeys. Employees will have to make sound business cases to their managers for not choosing the most efficient means of corporate travel available for that particular journey.
If, by the end of the month, the mobility budget is not completely spent, the employee is allowed to either keep the money or use the remaining amount for other employee benefits. Employees are able to decide how to spend their mobility budget. The more sustainable an employee travels, such as using public transport, or even by attending a phone conference rather than traveling to a meeting, the more monies will be left over for the employee’s use. The proponents of mobility management say this financial incentive motivates employees to use sustainable transportation.
However, the mobility managers of the future will face a greater level of job complexity than today’s fleet managers by having to manage a number of different mobility suppliers, covering the different categories of travel, versus the traditional focus on managing the vehicle asset and driver.
Expansion of the Market
European fleet management companies (FMCs) anticipate growing acceptance of mobility management and are positioning themselves to serve this emerging market.
One attraction of mobility management to FMCs is that it expands the market beyond the finite number of employees who qualify for a company-provided vehicle, which represents only 10-20 percent of the employee population. Mobility management allows lessors to serve the other 80-90 percent of the workforce who do not qualify for company vehicles, but have their own mobility needs. However, in order for mobility management to succeed, there must be viable alternatives to company-provided vehicles, such as a well-connected public transportation network seamlessly interconnected with corollary mobility solutions.
Is this the future direction of fleet management? Is Europe in the vanguard of a trend that will eventually migrate to the North American fleet market? Is the industry moving beyond asset management to mobility management, which will allow employees to use all forms of transportation and not automatically assign a company vehicle?
Let me know what you think.
P.S. Check out the latest agenda of the 2017 Global Fleet Conference in Miami June 6-8, 2017f for the latest discussions on mobility management trends.