Managing the Financial Side of Commercial Fleets

How to Manage Incidental Employee Drivers

Not all employees who drive on company business are assigned company vehicles. Many drive only occasionally on business-related functions. Here are some tips on managing and controlling incidental drivers.

March 2009, by Staff

Many years ago, a fleet industry veteran took a position with a Fortune 500 company; his title was "Manager of Corporate Personnel Transportation." The title fit the job far better than "fleet manager" since his responsibilities extended beyond the fleet of company vehicles.

No matter the job title, fleet managers' span of authority often extends beyond the fleet itself and includes drivers who are reimbursed for occasional business travel. While this task may seem simple, a number of considerations should be kept in mind.

Reimbursement a Useful Option
Reimbursing employees for the use of their personal vehicles on company business is a time-honored process and very useful as an alternative to company vehicles under the following two circumstances:

■ When employees are required to drive regularly on company business and their mileage does not meet the minimum standard for a company vehicle assignment.

■ When employees are only occasionally, or rarely, required to drive on company-related business.

This article addresses the incidental or occasional driver in the second example, who sometimes falls through the cracks when developing policy.

A number of common situations call for an employee, normally working in an office, to drive somewhere on company business. Banks, for example, often must transfer paperwork, checks, or other documents between branches or offices in addition to other courier-type tasks.

Some sales and marketing employees must drive to customers' locations, but may not have a territory large enough to qualify for a company-provided vehicle. Occasional deliveries, picking up other employees or customers from airports or hotels, and attendance at off-site meetings are also among the circumstances in which employees must drive on company business.

The most common method of "providing" transportation for incidental company drivers is via reimbursement. The process is simple: the driver notes the mileage driven and the company applies a cents-per-mile reimbursement to the mileage - most commonly the IRS "safe harbor" amount - and pays the driver via expense reimbursement.

Maintain Vehicle Pools
Another method some companies use is maintaining a pool of surplus vehicles. A branch or regional office or corporate headquarters at which incidental driving on company business is required may keep one or several vehicles around for the purpose.

Most such vehicles are out-of-service fleet vehicles or surplus vehicles formerly assigned to a driver who has left the company. The vehicles are kept at the office and signed out by drivers tasked to drive during work. The vehicle expense can be charged-out in a number of ways:

■ The company would (or should) know the cost of holding the vehicle, i.e., fixed and variable costs such as depreciation, finance or lease expense, fuel, and maintenance. These costs can easily be converted to a cost-per-mile charge applied directly to the mileage driven and assessed to the appropriate department.

■ Alternatively, the charge can be per-diem, which can be divided equally among the departments/accounts using the vehicle in any one day. If the vehicle remains unused for an entire day, the full charge can be absorbed by the providing office.

■ Other permutations of the same idea, such as hourly rates, can also be used to spread the cost among users.

Obviously, it is critical the company actually knows the total holding and operating costs. If the vehicle is a fleet vehicle, these numbers should be relatively simple to obtain.

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