Should you be considering mobility services over vehicle ownership?

The traditional model of vehicle ownership is evolving. With the trend moving from ownership to usership mobility services, many companies are starting to offer their employees mobility allowances rather than keys to a company car. Should you?

Despite reductions in fuel prices and fleet insurance, cost is the major driver in mobility services. Following the high levels of Benefit in Kind (BiK) taxation for company car schemes car ownership has become a much less attractive option. Larger organisations are also increasingly pressured to reduce and report on their carbon footprint and fleet mobility with the diversity of transport methods can be used effectively to off-set this.

So, what exactly is fleet mobility?

Fleet mobility itself basically looks at how businesses organise the movement of their employees from place to place at the lowest cost and with the least environmental impact.

The shift in preference from ownership to usership means that fleet management companies who traditionally help companies reach the lowest total cost of ownership (TCO) are now looking to help provide the lowest cost of mobility (TCM). This may include considering provision of a combination of mobility options such as vehicle ownership, carshare/ride-hailing services, carpooling and use of public transport.

Fleet managers are urged to look at the utilisation of their fleet vehicles. Many businesses will find employees with very low business mileage who can perhaps be offered different mobility solutions which are more economical. The shift towards mobility services is likely to affect how fleet managers address their operations and vehicle ownership in the future. Whilst we don’t believe vehicle ownership is going to die out completely there are many factors pointing towards a massive shift from ownership to usership business models.

What is driving the growth of mobility services?

In addition to the benefits relating to cost and environmental impact already discussed there are also other areas which are facilitating the push towards mobility. With digitally-enabled car sharing and ride-hailing set to become key drivers in the growth of autonomous vehicle sales, what is in turn driving the growth of mobility services?

Government backing

The government recently singled out mobility as one of the four grand challenges for the UK in its new ‘Industrial Strategy’. The key drivers of mobility services that they highlight are autonomous vehicles, connectivity, electrification and services. With clear targets to achieve, their strategy aims to reduce greenhouse gas emissions, make travel safer, improve accessibility and presents enormous economic opportunities for the UK. Government support in this area will undoubtedly bring greater attention, focus and funding to the area of mobility.

Advances in technology

Technological advances have also facilitated the change towards fleet mobility solutions, with the ability to get live updates, travel cost comparisons and vehicle tracking at the touch of a button. Not that long ago, accessing mobility options would have been time consuming and difficult, but with web-based solutions and the growth of mobile applications this information is readily available. New mobility models such as electronic vehicle leasing, private vehicle leasing and used car leasing offer tremendous growth opportunities for fleet mobility.

Mobility as a Service (MaaS)

As mobility platforms develop there will also be more opportunities to solve ‘last mile’ challenges. A bus, plane or train can get you to any city centre, but needing transport for the last part of your journey that gets you to a client office or meeting is always an issue. New business models such as Mobility as a Service make payment easier and provide better real-time information which allow passengers to book multiple modes of transport in just one click.

New financing models

Flexible payment models are also something that is also slowly changing as fleet mobility develops. Subscription packages for regular users are trending towards monthly subscriptions to include servicing, maintenance, fleet insurance, roadside assistance, and delivery. This model allows you to subscribe without any commitment, much like subscribing to mobile phone packages or Netflix. This option provides a flexible alternative to rental by the day or leasing for 2-3 years.

Multimodal mobility solutions will offer the most benefit

When choosing the best solution for your business it is important for you to consider overall usage and purpose of vehicles within your company both now and in the future.

It is most likely that a combination of ownership and usage models will prove to be beneficial for most businesses. Multimodal transportation that facilitate safe, efficient and pollution-free travel of both people and goods will be the most sustainable mobility solution for the future. As integration between operators develops and infrastructure improves Mobility as a Service will become a legitimate option that all fleet managers should be looking into.