It’s time to move from the traditional Total Cost of Ownership to a Total Cost of Mobility paradigm.
Recent travels have taken me across the U.S. and south to Brazil where the hottest topic on industry agendas is mobility management. I first encountered the term two-and-a-half years ago when I started reading blogs (mostly from Europe) full of stories of the sharing economy, autonomous vehicles and integrated mobility solutions.
I never guessed that the concept would evolve from infancy to reality so rapidly. We are definitely at a point on the mobility continuum where fleet professionals need to understand the opportunities and challenges involved.
What is mobility?
Mobility can be defined as moving people and materials from origin to destination in the safest, most efficient and most sustainable way.
“Safest” means avoiding crashes. At a recent fleet event, I heard from Steven Choi, former Google Engineer. He explained that more than 3,000 people are killed in traffic crashes every day, and that 57 percent of those crashes are due to driver error alone, while another 27 percent are due to a combination of driver and road factors.
The solution is to take the driver out of the equation, hence Google’s interest in Waymo, their driverless vehicle project.
“Efficient” means accomplishing organizational goals at a reasonable cost. Fleet can be one of the largest spends in many organizations. Reducing vehicle ownership can result in lower mobility costs if the right decisions are made.
“Sustainable” refers to any effort to reduce the carbon footprint. Using public transportation, walking or cycling are all great mobility options. Shifting to alternative fuels such as electricity also contributes to a more sustainable fleet.
So, will mobility-minded people be replacing their traditional fleets with autonomous, electric, shared-ride vehicles wherever possible? That remains to be seen, but practically-minded people are exploring what all this means.
What does this mean for fleet managers?
Many organizations will continue to own or lease vehicles to fill specific roles—bucket trucks, snow ploughs, and firetrucks will still be needed. In addition to a traditional approach for managing these assets, however, organizations need to identify all elements of mobility spend and manage and track it. By doing so they move from Total Cost of Ownership (TCO) to Total Cost of Mobility (TCM).
Today, it is not uncommon for HR to control car allowances, Finance to control bus, taxi or ride-share reimbursement and User Departments to handle rentals. Someone (the Mobility Manager) should have oversight of all these areas in order to understand how changes in one area will impact all of the others. For example, an increase in the number of people eligible for a car allowance could result in a decrease in the need for fleet vehicles.
Fleet managers should consider all ‘Mobility as a Service’ (MaaS) options and integrate ride-sharing, public transport and other alternatives into the options they provide customers. Companies should abandon car allowances and introduce mobility allowances, leaving the decision as to whether to use a vehicle or another mobility alternative up to the individual employee. Finally, fleet professionals should continue to do the things we know are right–enforce strict safety policies and prioritize sustainability.
It is an exciting time for the fleet industry, and ignoring these developments is not an option. If this is a topic of interest to you or your organization, mark your calendar for NAFA Fleet Management Association’s pre-conference event entitled “The Mobility Continuum” on 23 April, 2018 in Anaheim, California.