In Sync

Spotting a gap in the market, TR Fleet, which helps organisations manage the risks and costs associated with using private vehicles for work purposes.

Driving innovation

Spotting a gap in the market, Mat Prestney and Jeremy Sneddon joined forces to form TR Fleet, which helps organisations manage the risks and costs associated with using private vehicles for work purposes. Tony Featherstone reports.

Consider this scenario: a small charity that helps the poor relies on volunteers to visit those in need. Most volunteers use their private cars and the charity reimburses them for vehicle expenses.

On the way to a work appointment, a volunteer is killed in a horrific road accident. An inquest later finds the car had brake failure, a low safety rating, and had not been serviced for two years. Worse, the charity took no steps to understand/monitor private vehicle use in its workplace and eliminate or minimise safety risks. Directors encouraged volunteers to use their cars to save costs, even though they knew the safety of some private vehicles was below that deemed acceptable for charity-supplied cars.

Each director faces fines of up to $600,000 and/or five years’ imprisonment under the Work Health and Safety Act 2011 for highest-category offences. And the charity suffers immense reputational damage from failing to provide a safe workplace for employees and volunteers. Its funding falls.

Although this scenario is hypothetical, it is likely that hundreds of thousands of organisations across the not-for-profit (NFP), commercial and government sectors have staff who occasionally or frequently use their private car for work purposes. And that many organisations, and by default their directors, are blind to the risks and penalties.

“Too few boards understand the risks of staff or volunteers using their vehicle for work purposes,” says Mat Prestney, executive director of TR Fleet, an emerging fleet consultant that helps organisations implement and monitor policies and systems to improve safety governance.

“Directors need to ask: what is the single most dangerous thing our employees do at work? If the answer is ‘driving a vehicle’, they need to know the organisation is doing everything it can to reduce that risk. The law defines a vehicle used for work as a ‘workplace’; it doesn’t matter if that vehicle is company-supplied or privately owned.”

Grey-Fleet Growth

Growth in so-called “grey fleets” in Australia – privately owned vehicles used for work purposes – encouraged Prestney and business partner Jeremy Sneddon to leave their corporate careers and launch TR Fleet in 2014. Both had worked at GE Capital and Sneddon had previous roles at ANZ and National Australia Bank.

Sneddon, also a TR Fleet executive director, says Australia is following the UK experience with grey fleets. “The use of privately owned vehicles in the workplace has become a much bigger issue in the UK and boards there are paying far greater attention to the issue. They are also thinking about the carbon emissions of their grey fleet and whether they are acceptable.”

An estimated four million vehicles are defined as “grey fleet” in the UK. Grey fleets are expanding in Australia as organisations own or lease fewer vehicles and reimburse staff who use their own. Also, greater workplace flexibility, as companies allow staff to work remotely, is blurring the line between company-provided and privately owned assets used for work.

Sneddon and Prestney saw an opportunity to close the gap between UK and Australian organisations on safety governance of grey fleets, and help companies manage drivers through systems that require them to acknowledge policy and report licence details, demerit points and grey-fleet vehicle details.

Their gamble with TR Fleet is paying off. The Melbourne-based firm is working with some of Australia’s largest NFP, transport and financial services organisations on grey-fleet management, and growing quickly. This year it helped World Vision Australia implement an online self-reporting system for staff to provide a range of information on their private vehicle used at work.

Other NFPs are reviewing their driver policies. Prestney recently met the chief financial officer (CFO) of a public benevolent institution that has 3,000 volunteers. “The CFO is concerned about how the organisation is managing the risk of volunteers driving their cars for work purposes and sometimes having non-employee passengers. These are potentially very significant risks that boards must know are being monitored.”

Information Gap

Prestney says organisations typically have lots of information on their company fleet, but often know little about the extent of private-vehicle usage in their workplace, even though grey fleets are becoming a bigger part of their overall fleet. “This information gap is putting boards, organisations and their employees at risk. Boards should be asking the CFO about the extent of the organisation’s grey fleet, not only its owned or leased vehicles. And whether the organisation has driver policies and staff have signed up to them.”

Boards, says Prestney, might not understand the scale of the risk. “We’ve heard of salespeople driving unregistered private vehicles to client meetings. And technology staff driving motorbikes to work events. Imagine if someone is killed or injured. Some organisations had no idea private vehicles were being used instead of company-supplied ones, or the safety status of private vehicles that are legally defined as ‘workplaces’. Or the penalties and potential imprisonment for directors for a criminal offence in this area, which cannot be insured against.”

Directors, too, could unwittingly contribute to their organisation’s grey fleet if they use their car to attend board functions or visit sites, and receive a car allowance or have a novated lease. It is possible that many directors reading this article do just that and their organisation has not assessed the standard of their private vehicle and its safety – or directors’ driving qualifications, history and skills – before allowing them to drive for work purposes. “It all gets back to implementing systems, monitoring and reporting on them, and communicating to staff what is required,” says Prestney.

Sneddon and Prestney spent plenty of time implementing TR Fleet’s systems before its launch. Their corporate careers reinforced the importance of policies and procedures in start-up ventures. “We wanted to get our corporate governance right at the start, not just think about it when our business was much larger,” says Sneddon. “The ability to demonstrate good governance is required in a lot of our tenders with potential clients and is needed if our organisation is to grow sustainably. Good governance helps us win work.”

The pair also signed a shareholder’s agreement with dispute-resolution mechanisms before launching TR Fleet. “Entrepreneurs must have protection in place in the event that something goes wrong,” says Sneddon. “We haven’t had to use the agreement but it’s comforting for us and our families to know it is there.”

Prestney says his skills and personality complement Sneddon’s. “I spent a lot of time in fleet management and Jeremy has great experience on the finance side through his banking roles. I am probably more marketing focused and Jeremy has more technical knowledge. It’s important in a business like ours for directors to bring different skills to the table.”

Sneddon says he enjoys their professional relationship. “We work very well together. Mat and I both come from families with small business backgrounds and we wanted to work for ourselves after spending years in big corporates. It’s a very open, productive working relationship.”