Features
25 Mar 21

Keeping the job interesting: Fleet Management in EU and US

US fleets are typically tool-of-trade, EU fleets are typically predominantly benefit fleets. Fundamentally different fleets lead to fundamentally different fleet managers, but with the potential to inspire each other.

Sourcing

Tool-of-trade cars are assets that are treated much alike any other business tool. They are per definition fit-for-purpose, a concept that is most often used indicatively in European fleets. US OEM tenders read like a tech spec guide and requirements (clearance, horsepower, cargo volume…) are quantified. This contributes to the popularity of trucks: they deliver good value for money and, because of their popularity, are easy to dispose at a good market value.

Europeans source from a benefit perspective, even if fit-for-purpose has made somewhat of shy entrance in tenders. Sourcing is guided by HR policies, but also by works councils and trade unions; these employee representation bodies watch out for changes in the (perceived) value of employee benefits and have – in some countries – the power to reject car brands or models.

Technology

The uptake of technology solutions in the US has been far more successful than is the case in Europe. With the benefit aspect of company cars, and private usage as a market standard, comes protection of privacy data. Also, operational leasing is built on a foundation of full-service delivery to lease customers, whereas US fleet managers are more inclined to use tech to manage in-life events, such as maintenance.

EU fleet managers have not yet solved the challenge whereby telematics can be “sold” to employees as a trade-off between the benefits of additional safety versus the inconvenience of a monitoring solution. Gradually however, solutions will need to be explored, as vehicles will be equipped with connectivity and telematics out of factory.

Mobility/Electrification

A combination of different requirements (sustainability, taxation, city bans) and trends (usership, circular economies, flexible benefits) has brought mobility and electrification to the table of the European fleet manager. Not confronted with such parameters, and embedded in a century-old tradition of car usage, the US fleet manager will have trouble understanding why Europe is not just giving cash.

Simply put, cash is expensive due to EU’s high income tax rates, and it doesn’t solve the issues at hand. From a sustainability point of view, for example, giving cash equals making the employee responsible for emissions.

Supply chain

Car as a benefit, or mobility as a benefit, is making a timid debut in the US, whilst European fleet managers have started to adopt technology solutions. It’s an opportunity for the respective supply chain to go out and venture across the Atlantic.

Nonetheless, there is not many low hanging fruit in the respective markets; vendors will have to look for the opportunities, and spend time/money on educating the customer base. The potential is massive, and both EU and US will benefit from a bigger supply chain, but we’re only at the start.

To find out more about leasing practices across the globe and global fleet management, join the 2021 Global Fleet Conference on 12 May. You can register for free and participate to an exciting 12-hour fleet journey across the globe

Authored by: Yves Helven