UK fleet operators, who have turned to cash-for-car schemes in order to reduce company car overheads, may be running afoul of UK corporate laws on safety. However, this should be good news for fleet management companies as demand for accident and maintenance management services increases.
Corporate responsibility legislation in the UK has been growing rapidly in recent times, with fleet operators now facing the potential liability of being held responsible for their employees’ mishaps. Many who have offered employees cash incentives instead of company cars are worried about the consequences.
Cash-for-car schemes have been seen as a quick fix solution to high company car tax bills and have been widely adopted in the UK. However, such schemes have led to large numbers of employees using cars which are unsuitable for high-mileage business use – and which are effectively invisible to employers’ record keeping. Under such schemes, drivers can choose any car they want to as their work vehicle – even poorly maintained, second hand vehicles with uncertain histories of maintenance.
With no central fleet management system in place for such vehicles, employees face the prospect of running poorly maintained, unsafe vehicles, whilst employers face the liability for incidents involving their employees and their vehicles on company time.
Without monitoring MOTs, service information and accidents, employers risk the wrath of the UK’s increasingly strict corporate responsibility and health and safety legislation, which is designed to prevent employers’ failure to look after their employees’ safety. This legislation is causing employers increasing concern and has resulted in major health and safety initiatives in corporations throughout the country.
In the long term, such concerns hold good news for the fleet industry, with companies increasingly turning away from cash-for-car schemes and returning to company controlled vehicles and fleet management systems. This will doubtless increase demand in a market that has seen recent turmoil over changing taxation regulations and has suffered from lowered residual prices for used vehicles as well as economic slowdown. Fleet management companies can look forward to increased demand for accident and maintenance management services as these concerns become priorities in corporate boardrooms throughout the land.
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