Fleet managers have a stellar reputation for finding some creative ways to maximize efficiency and minimize the costs of their fleets. Indeed, the obsession of some managers rivals even that of a golf pro seeking every tool to eke out one less stroke in his game. In this blog post, we focus your attention on what could be the most relied on club in your bag: the Launch Mobility Vehicle-as-a-Service system. We’ll show you how Launch Mobility enables four key strategies aimed at optimizing fleet operations: right-sizing your fleet with increased utilization, reducing fuel costs through the adoption of more efficient vehicles, minimizing management costs per vehicle through automation, and enhancing tracking to minimize vehicle damage. Through real-world examples, we explore how these strategies, when implemented with Launch Mobility's innovative solutions, can lead to substantial savings, improved sustainability, and streamlined fleet management processes. Whether you're a seasoned fleet manager or exploring ways to enhance your organization's vehicle operations, this post provides actionable steps to transform your fleet into a cost-effective and high-performing resource.
Methodology. To quantify the effects of implementing Launch Mobility, we built a small model fleet consisting of a 50-vehicle pool that would be common to see deployed in the field. Then we simulate changes that follow common fleet management strategies. We detail those changes below. To estimate cost impacts, we used the American Automobile Association (AAA’s) Driving Cost Calculator as an independent, well-respected estimate for cost of ownership. AAA takes into account a variety of factors, including vehicle make, model, year, and trim; U.S. state of ownership; fuel price; estimated mileage; city/highway mileage mix, and others. AAA estimates ownership costs related to the following categories:
Fuel
Maintenance
Depreciation
Insurance
Fees & Taxes
Finance Charges
The following paragraphs demonstrate how impactful an effective pooling strategy can be, even when executed in moderation. And the beauty is that these results scale beautifully to fleets with thousands of vehicles.
Strategy 1: Right size your fleet with increased utilization. Typically, depreciation is the largest cost driver for a vehicle that is purchased new. As such, it is critical for fleet managers to ensure efficient use of their assets. However, when those assets are scattered, poorly controlled, and misused without recourse, it is difficult to make the most of your fleet.
Launch Mobility’s main goal is to increase the utilization of your fleet vehicles. We do so by leveraging our digital reservation system to create purposeful bookings (think hours not days), ensure adherence to your reservation rules, and enable automated vehicle scheduling. We put the power of virtual keys in your control, releasing you from the burden of shuffling physical keys around. Instead, Launch Mobility will automatically assign the right driver access to the right vehicle.
Additionally, with a comprehensive view of how your vehicles are allocated, fleet administrators have full control to take action over the fleet at any time, from assigning vehicles and keys remotely over the air to even revoking keys when reservations are not properly returned. As a result, fleets can drive per vehicle utilization (the actual time a vehicle is doing its job) much higher than manual processes would ever allow.
As a result of raising your utilization to new heights, your fleet will complete the same number of jobs - driving the same number of miles - with fewer vehicles. In an example that we ran, by increasing the utilization per vehicle by 16%, we were able to complete all of a fleet’s jobs with a 14% smaller fleet. That allowed us to retire 1 out of every 7 vehicles. For perspective, that increase in utilization raised the average odometer per vehicle by less than 2,400 miles per year; a very moderate increase.
Of course, increasing mileage raised maintenance costs per vehicle (in our example, an average of $500 annually). But that cost was far offset by the savings due to right sizing the fleet. In this case, increasing utilization and reducing fleet size by just 14% led to a net fleet savings of over $850 per vehicle per year. For those obsessed with saving costs, supercharging your utilization with Launch Mobility is a powerful tool.
Strategy 2: Reduce fuel costs with more efficient vehicles. Of course it’s easy to say: replacing gas guzzlers with more efficient vehicles - for example hybrids or electric vehicles is a no-brainer. But obvious challenges arise: who controls a vehicle decision can be territorial and political. Sometimes these factors lead to suboptimal decisions.
Think of the example where a small portion of a fleet is controlled by an outside department. In this scenario, when evaluating vehicle class, department managers often choose a large asset, perhaps believing that they will need bulkier vehicles for times when they are hauling or transporting large groups. In reality, those use cases may come few and far between, but it’s natural to plan for those contingencies when seeking a one-size-fits-all solution.
One answer? Pooling. By reducing a departments’ dependence on its own small fleet, they can get away from the one-size-fits-all approach. Instead, they can meet their infrequent, high-need use cases with vehicles pooled across departments. Stack enough hauling use cases, and suddenly it makes sense to add a pickup to the pool. However, for the majority of trips, where 1-4 passengers are traveling from A to B, fleet administrators can guide users to more appropriate vehicles that save fuel.
It’s never easy giving up control, but the benefits are worth the work. Advanced digital pooling systems will make sharing seamless, and even enable myriad hybrid solutions that incentivize departments to share. Pooled vehicles can result in cost savings so significant that departments can’t help but buy in.
And when they do, the benefits are significant. In our example case, we were able to replace about 1 in 6 vehicles in the fleet with a more efficient model one class away in body size and powertrain. We replaced midsize crossovers with midsize hybrids, and hybrids with compact electric vehicles. That still left us with a mixed fleet of pickups, crossovers, midsize hybrids and EVs. Despite retaining that range of models with all their capability, and despite completing the same jobs and mileage, we were able to save an average of $462 per year from each vehicle in the fleet. Pooling makes a shift to the right vehicle mix feasible, and the results speak for themselves.
Strategy 3: Reduce Management Costs per Vehicle. So you’ve built your motor pool. Employees check cars in and out on a usage basis. Great! You probably are already seeing benefits. But running the operation can be laborious. If you are managing your pool manually, think of all the repetitive work that must be done: logging bookings; assigning a vehicle; confirming the driver; finding and providing them a key; confirming mileage; completing a walkaround; taking photos and reporting damage. Getting the key back. For every single booking!
Launch Mobility automates much of the work with a self-serve workflow that saves you time and money. Via the Launch Mobility mobile or web app, users you pre-approve may:
Book a vehicle based on your reservation rules
Access virtual keys for a keyless driving experience
Perform a virtual walkaround and submit photos
Report any observed damage remotely
Transmit GPS, odometer and other data passively to your desktop via telematics
How big of a cost savings would this drive in your shop? Imagine your manual process (or what you went through the last time you rented a car). Did you spend 20 minutes with a representative? Longer? Now imagine how an automated experience would change your life. Could you save 15 minutes per reservation?
Even assuming you save only 10 minutes per reservation, the benefits stack up quickly. In our example, we assumed that each reservation spanned 8 hours on average. In that case, with a full time labor cost of $70,000 per year, including taxes and benefits, automation could save $682 per vehicle yearly. If you typically have double the number of reservations (average 4 hours in length) and labor rates are $90,000 per year, that labor savings balloons to a whopping $1,755 per vehicle per year.
It’s important to note that, without a doubt, a great fleet administrator is invaluable to your operation and always will be a necessary part of a high-performing motor pool. It should be abundantly clear by now that the value of automation is not in reducing headcount, but rather in being able to scale your shared fleet in order to extract the cost savings that we’ve identified here. And the savings are impressive.
Strategy 4: Minimize vehicle damage with enhanced tracking. We hear it often: “My cars go out and I don’t have great tracking. When damage occurs, I don’t know who to hold accountable.” While each organization maintains its own policies on how to hold drivers responsible for damage, two things are certain: 1) no one likes being held responsible for damage, and 2) users will treat your vehicle better if they know that you have a system for oversight. Even in internal fleet environments where drivers know they will not be held financially accountable for an accident, consequences as small as losing the ability to access a vehicle or organizational reprimand are enough to encourage safe driving behavior.
As we’ve mentioned, Launch Mobility can automate pre- and post-drive surveys to collect important information, such as vehicle condition or damage photos, so that you can build and store the time-stamped chain of custody documentation necessary to keep drivers accountable. And the mere sense of accountability leads to fewer claims.
The value of this depends largely on the environment you already have with regard to safe driving, what kind of liability you assess your drivers, your insurance policy, and many other factors. As such, your mileage may vary. But without a doubt, fleets with a systematic oversight program will encourage safer driving habits and see fewer claims than those without one.
Even if you have nothing to gain from fewer claims, optimizing your fleet with Launch Mobility will lead to significant gains. By taking advantage of the efficiency gains you will achieve with a highly-utilized fleet, you will be able to make the right-sizing, right mix, and resourcing decisions that, with only moderate changes, drive savings of $2,000 or more per vehicle annually.
Model fleet before and after data detail (If you want to get in the weeds)
