Risk Management for Fleets: New Mobility and Covid-19

Risk Management for Fleets: The New Mobility and Covid-19




By Lukas Neckermann
 

May, 2020


Implementing new mobility options comes with great potential benefits: increased efficiency of operations, reduced costs, reduced carbon dioxide emissions, and perhaps improved employee satisfaction. As a result, and prior to Covid-19, many fleet managers will have been considering their approach to risk management with respect to new mobility – electrification, automation, and sharing. Clearly, a pandemic temporarily alters priorities; safety of staff and the resilience of the business have priority.  But we shouldn’t take our eye fully off of the longer-term view: managing the potential of alternate mobility solutions.  We may even find some solutions in our short-term challenges. 
 
It’s become an adage that the fleet manager is becoming a mobility manager. In terms of risk, the consequence is straightforward: as you add responsibilities across the spectrum of new mobility, so too will the list of risks you will need to manage. Connected and electric vehicles each bring a new set of responsibilities, from the batteries and charging infrastructure, to the data compiled by the vehicle and the telematics. 
 
Data is the key to transformation. It can provide you with the tools and information to consider implementing electric vehicles in your fleet. Among other things, the data will provide average and maximum mileage per vehicle, average speed, and (importantly) the parking spots where vehicles rest between uses.
 
The vast majority of electric vehicle charging happens at home. In a post-Covid-19 world in which many more employees may be working from home, or travelling less, the opportunity to reduce overall TCO, and implement EVs, should not be ignored – but neither should the risks. 
 
The use of shared and on-demand mobility options by staff exposed your company to different risks even before Covid-19, which needed be monitored and managed. This is even more the case today.
 

Connectivity


Many fleets have long used add-on telematics for vehicle tracking, safety, and even driver behavior monitoring. Connectivity systems can provide fleet-managers with real-time vehicle data and control, up to and including disabling the vehicle in case of unauthorized or improper use. Some insurance policies are coming to reward such monitoring, with premium reductions for connected vehicles. Aside from the premium reduction, post-Covid-19, the rationale for vehicle connectivity and monitoring becomes even stronger: are you able to track if vehicles and staff have been present in high-exposure areas? Has the vehicle been driven by an infested member of staff? When was the in-vehicle HEPA air-filter – or the vehicle itself – last cleaned? Telematics becomes a core part of any fleet manager’s risk management toolbox.
 
As new vehicles are launched, they will increasingly have a full suite of connectivity as standard or optional equipment. In day-to-day use, and where the fleet-manager can reallocate idle vehicles, the ability to integrate a vehicle’s connectivity solutions with fleet management software can lead to an optimized utilization rate. In case of an accident, the true benefits come to the fore; vehicles can communicate automatically – first with emergency services, and then with the insurance company, to provide data from the scene. And of course, in times of crisis – such as a pandemic or hurricane – the connectivity and tracking of vehicles can literally be lifesaving.
 
For the fleet manager, implementing these life-saving measures creates a requirement to manage vehicle and driver data with diligence and care. Some states may mandate various levels of consent before such data can be collected and used.
 
Over the coming years, we will also begin to see greater use of over-the-air (OTA) updates from manufacturers. A few OEMs regularly launch updates that improve the safety, efficiency, and usability of their vehicles, rather than update vehicles at a dealer upon request of a certain problem.
 
With this comes the benefit of downtime-reduction, but also the duty to ensure vehicles are constantly updated. Over-the-air updates may well be used in future crises to enable certain vehicle feature-sets – the way laptop computers are regularly updated with the latest anti-virus software. But just as you update computer and smartphone operating systems, fleet managers will need to ensure that the fleet is continuously updated, potentially even with liability repercussions in case of a failure to do so.
 
Finally, looking ahead, more and more connected vehicles will be equipped with so-called “V2V” (“vehicle-to-vehicle” communication) technology. This will allow vehicles to independently communicate with each other – for example, raising an in-vehicle alert when an emergency-services vehicle is nearby or at an intersection ahead, prompting the driver to pull to the side. Just one more way that connectivity may save time, and lives.
 

Electrification

 
The increasing availability of plug-in vehicles (fully electric and plug-in hybrid vehicles, or PHEVs) makes these increasingly viable options for fleets. Even as we drive into a new, post-Covid-19 economic reality, reduced total-cost-of-ownership (TCO) will stay in focus. With changed usage behaviors and energy prices, some fleet managers may discover they can now significantly reduce the TCO of their fleet.
 
The link to connectivity is self-evident: using telematics data can provide you with the tools and information to consider implementing electric vehicles in your fleet. 
 
Among other things, the data will provide average and maximum mileage per vehicle, average speed, and (importantly) the parking spots where vehicles rest between uses. Does this change after Covid-19? Of course, it does – but it’s not a time for conservatism in planning. More employees working from home, and lower distances covered, may actually provide additional momentum in the roll-out of electrified vehicles. 
 
Along with identifying the number and uses for electrified vehicles, from a Risk Management perspective, you need to ask:
  • What is the risk of installing and maintaining additional infrastructure, including charging? Is there an implication on the energy infrastructure of my facility?
  • Do EVs change the day-to-day for users? Where can and will they charge the vehicles? Are the locations where they can be charged safe and secure?
  • How do risks associated with disposal change at the end-of-life of electric vehicles?
 
Some of the issues are familiar: whereas previously you may have managed fuel-cards for staff and diesel tanks on-site, today, it’s charging-subscriptions and stations. Where previously you may have managed the disposal or recycling of lead-acid batteries at the end-of-life; with electric vehicles, it’s managing the ‘second-life’ (the re-use in alternate applications) of lithium-ion batteries. Electrified vehicles themselves are not yet a “mobility revolution” – they just require additional questions to be answered.
 

Autonomy

 
Along with electrification and connectivity, the promise of autonomous vehicles has gripped the industry, captivating fleet owners with the promise of greater efficiency, lowered driver costs, and a reduction of accidents toward ‘Vision Zero’. Some fleets have even begun to pilot low-speed autonomous shuttles at airports, campuses, or in larger parking lots. During the Covid-19 crisis, such shuttles were even used to transport medical supplies and blood-tests across the Mayo Clinic campus in Florida. For the fleet-manager, autonomous vehicles provide new opportunities and solutions for the challenges faced by the business – but they also bring a new vehicle supplier and the duty to monitor utilization and performance of such pilots. 
 
Such autonomous (so-called level 4 or 5) vehicles may increasingly roam our streets within the decade, even at higher speed and outside of today’s confined environments; but the simpler forms of autonomy can already benefit fleets today. Advanced Driver Assistance Systems (ADAS) provide a significant level of risk reduction that should be leveraged Modern vehicles are offered with systems such as Automatic Emergency Braking, Lane Keep Assist, Blind Spot Monitoring, and Cross-Traffic Alert, and fleet managers are well-advised to equip vehicles with the highest level of ADAS available; you may even consider rejecting the implementation of vehicles that don’t offer them. Systems such as “AutoPilot” and “SuperCruise” technologically enable the vehicle to drive along the highway without significant driver intervention – the first step toward more fully-autonomous systems. Importantly, however, these systems do not in any way absolve the driver of responsibility in case of an accident.  
 
Insurance providers note that all these technologies have the potential to greatly reduce accidents, both in frequency and severity. 
 
Autonomous Emergency Braking (AEB), for example, has been calculated to potentially reduce front- to rear-end collisions by over 30%, thereby lowering the frequency of risk. On the other hand, the improper use of such technologies, or the assumption that they can replace care and proper attention to the driving task, can lead to fatal consequences. It’s the fleet manager’s responsibility to ensure this is reinforced in driver training and behavior reviews.
 
 

Shared Mobility

 
Some fleet managers have begun to implement corporate carsharing (CCS) instead of classic pool vehicles. CCS allows staff (and in some cases, a wider community) access to shared vehicles, without the tedious management of keys. Especially where vehicles are used for short periods or short distances, this is suitable to be combined with electrification.
 
With CCS, just as with pool cars, there is a necessity to monitor damages and allocate usage (such as for itemized, department-specific billing). Because a CCS vehicle is always connected, all the other risk considerations of connectivity also apply.
 
Finally, and even beyond the spectrum of today’s vehicles, some companies may also look to other vehicle types (shared or not), thereby further diversifying their fleet: electric bicycles and scooters are becoming increasingly popular, especially in urban environments.
 
Enabling the use by staff comes requires certain risk precautions. For bikes and scooters:
  • Will you equip and mandate your staff to use helmets? 
  • Will you provide training for staff who use two-wheeled alternatives to cars?  
  • How will you monitor, ensure (and even insure) the safety of staff using such two-wheelers when they are from shared service providers?
 
And more generally:
  • How will fleet professionals secure data usage when staff use commercial shared mobility options?
  • How are shared mobility modes cleaned and maintained between uses?
  • Some carsharing and scooter-sharing services were halted during the Covid-19 crisis. This would seem to make sense in an effort to reduce travel and the risk of cross-contamination from the vehicle. On the other hand, some staff and users may come to rely on shared mobility as their primary means of getting around – including for shopping or to medical appointments. Here again, knowing how all modes of transport are being utilized is an essential component of a mobility manager’s dataset, so that sensible decisions can be made.
  • Implementing new mobility options – whether they be four-wheeled or two-wheeled, electric or shared – comes with great potential benefits: increased efficiency of operations, reduced costs and CO2 emissions, and perhaps improved employee satisfaction. Yet as we move forward, fleet managers should carefully identify how these will impact the risk and risk management principles in their fleet.

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