Easy Riders

Susan Miller will never forget what was arguably the most flagrant misuse of a company car ever. Fifteen years ago, when she was cutting her teeth in fleet administration for a former employer, a worker there decided that his black Chevrolet Caprice looked enough like an unmarked cruiser to support his impersonation of a police officer. He used the ploy to pull over female drivers--with evil intent.

"When they caught him and impounded the vehicle, it was a huge embarrassment, and they had to keep the car for about a year as evidence," says Miller, who today is domestic fleet manager for McDonald's Corp., in Oak Brook, Illinois.

But even when driver behavior is perfectly respectable, human idiosyncrasies remain a big challenge for fleet managers. They can be costly, too, and not just because they consume management re-sources. Petty pilferage, unauthorized fuel purchases, neglect of automobiles, and low driver productivity can add significant costs, in addition to some hidden penalties, to corporate fleet operations.

Moreover, accidents involving fleet vehicles can represent a significant exposure. Each year, about one in four fleet vehicles is involved in an accident, says Rich Neff, senior vice president, product management, North America, for GE Capital Fleet Services, a Minneapolis-based fleet leasing and services company. The average cost of the damage: $1,400. But that cost may be dwarfed by indirect costs---insurance premiums, medical bills, workers' compensation, lost productivity, even jury verdicts.

For these reasons, a number of companies are trying to remove from drivers as much of the burden of operating a corporate car as possible-- from buying gas to report-ing travel costs to handling accidents. At the same time, these companies seek to monitor the habits of drivers and forestall fraud--say, from using cars for personal reasons or from making illicit fuel purchases. And, increasingly, they are teaching their employees to become safe and responsible drivers.

FUEL RULES
Mallinckrodt Inc., a St. Louis­based manufacturer of chemicals and health care products, now saves an estimated $40,000 annually from its 750-vehicle fleet, just by better enforcing fuel policies. "We eliminated all premium fuel purchases and the use of full service," says Sam Visintine, formerly assistant treasurer, now a financial services process leader for Mallinckrodt.

The company also curtailed hidden incidental purchases of such items as cigarettes and chewing gum, which used to be easily attached to a gasoline charge. Its method: a fuel-card program that collects and reports the information that Mallinckrodt needs to spot abuses. "It lets us monitor the type of fuel and the amount of fuel drivers buy," notes Visintine.

Although their popularity is growing, fuel cards are currently used by fewer than a quarter of U.S. business fleets, estimates Mike Dubyak, senior vice president of Wright Express Corp., in Portland, Maine. Wright is the leading provider of fuel-management services, through its Wright Express Card program and through private-label and co- branded cards offered through oil and fleet- service companies. Generally, such fuel- management programs yield im-mediate savings. Nationwide Insurance Enterprise, based in Columbus, Ohio, saw a dramatic drop in premium fuel purchases within six months of its adoption of a fuel-card program. And when McDonald's moved to the Wright Express Card last April, it discovered that 23 percent of its drivers were buying premium gasoline, compared with the national average of 3 percent. "We've already seen a savings," beams Miller.

The card system captures data that identify drivers who violate company policies. To buy gas, a driver must run his fuel card through a point-of-sale terminal, enter a personal driver ID number, and enter the odometer reading of his car and other information. The procedure supplies Wright electronically with the time, date, and place of purchase; the fuel type and amount; and, with some calculations, the car's miles per gallon. (A car registering pitifully low MPG suggests that a driver may be fraudulently fueling a second vehicle.) Wright packages this information monthly, sending its fleets detailed reports of every driver's purchases, with an exception section that highlights purchases and purchase patterns that exceed normal expectations or violate corporate policy.

The cost of Wright's program: $2 per month for each fuel card.

SOLVING PROBLEM DRIVERS
Fuel cards are one of a handful of tools offered by fleet-management vendors that help companies control their drivers. Maintenance management programs that provide coupons for drivers to redeem at regular intervals for preventive care pay off at resale time: better- maintained autos generally fetch a better price. Motor vehicle record checks--especially for employees just entering a fleet program-- can garage problem drivers before they take the wheel of a company car. Safety and accident-prevention programs can hedge the odds that existing problem drivers will avoid accidents.

"A classic problem is where you have a person who's an outstanding service rep, or a salesperson who's an outstanding sales performer, and you want to keep him but he's a terrible driver," says Neff. GE Capital and other fleet-leasing and -service companies provide accident-prevention programs that focus on driver training.

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