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Weekly UpdatesFleet reduction programs can generate large cost savings for municipal governments, but they will not be successful unless expectations and behavior of the fleet users' change. For example, in one city, an employee of the street department's lighting division had been granted take-home privileges for his vehicle; apparently, the employee needed the vehicle to check streetlights along the route home. As advisors to the city, we wondered if this employee was leaving work at 9 p.m.--after sunset--to survey his appointed rounds. Of course, the answer was "no." While it would be presumptuous to generalize from one anecdote that there is no justification for a personal/take-home vehicle assignment, it does point out the need to ask many questions and perform significant analysis to identify opportunities for fleet reduction. In addition, a change of culture is required to successfully implement a plan, as was the case in Philadelphia, Pennsylvania.
INTRODUCTION
In 2003, Philadelphia was experiencing fiscal distress and put departments on austerity budgets. Motivated by a tight budget, an innovative spirit, and the desire to break a decades-old culture of vehicle entitlement, the City of Philadelphia committed itself to reducing fleet size. Comprehensive review, analysis, and policy change resulted in a reduction of 330 vehicles. Roughly half were passenger vehicles (sedans, SUVs, other light-duty vehicles) whose elimination was facilitated by the introduction of an automated vehicle-sharing program. As a result, the city is avoiding approximately $9 million in spending over a five-year period, comprised of reduction in costs for acquisition, parking, maintenance/repair, and fuel. Most importantly, the program "changed a culture of expectation and entitlement in the city with respect to passenger vehicle access," says Robert Fox, the chief administrative officer for the city's Office of Fleet Management and a 30-year veteran. As the vehicle fleet was reduced, many departmental employees and top managers lost their assigned vehicles and associated take-home privileges. No longer were hundreds of passenger vehicles available for commuting, going to lunch, or other inefficient--sometimes non-business related--uses. Because vehicle resources have been constrained, those who need to get from point A to point B need to be more creative, and the automated vehicle-sharing program provides an outlet for that creativity, The city regularly reports fleet size, and initial reductions have held; that is, fleet size has not crept back up since 2003, providing solid evidence of the program's effectiveness.
CRITICAL ELEMENTS
Advancing a successful fleet reduction begins with appreciating that fleet size drives total expenditures. Regardless of how well costs are managed and efficiencies generated through process reengineering, fleet costs will be proportional to the overall number of vehicles. To implement this major fleet-reduction project, the city hired an outside management advisor, so that an independent, third-party analysis would identify vehicle relinquishment candidates on an objective basis. High-level acceptance was also of great importance. As the process began, the project team secured the support of senior government executives, including the mayor and managing director; this support was critical to the project's ultimate success. Further, the project team checked in regularly with these senior personnel to ensure continued support of orientation and strategy Moreover, all departments and employee classifications were included in this fleet reduction program: the police and fire departments participated and directors and commissioners as well, no exemptions.
From the beginning, the City of Philadelphia committed to a goal of purging at least 300 vehicles from its 4,500-vehicle fleet (rolling stock only--not including any off-road vehicles or towed equipment). Establishing this goal at the beginning ensured that the project team remained focused on results. The project team also developed basic strategies to guide the project, which were (1) to "get out of the passenger vehicle business" to the greatest extent practicable by getting users into other, more economical modes of passenger transport and (2) to identify underutilized operational vehicles and remove them from the fleet.
Due diligence was necessary to develop an understanding of the qualitative, operational, policy, and political dynamics that influence fleet assignment, usage, and deployment. This kind of information is most effectively gained through one-on-one or small group discussions. Therefore, the project team--in addition to analyzing vehicle cost and usage data from the city's automated fleet tracking system--met individually with all departments, sometimes several times each, during the project.
To mitigate or eliminate any negative impacts on service delivery from the vehicle reductions, the city developed an automated vehicle-sharing program ("AVSP"). ASVP, the first program of its kind in North America, is administered through PhillyCarShare, the service provider the City of Philadelphia selected through a request-for-proposals process. (1) Employees can make reservations quickly via the Internet or telephone and use vehicles for periods as brief as an hour. Employees can access a pool of vehicles--managed by PhillyCarShare--through AVSP technology that enables secure access 24/7, without any administrative staff. Beyond car sharing, Philadelphia promoted its existing mileage reimbursement program and created a vehicle allowance program for employees who were compelled to relinquish their vehicles.
Automated Vehicle Sharing
Each driver is issued a unique credit-card sized proximity card and each vehicle is outfitted with a small "black box" that facilitates entry and tracks usage. Car keys are kept tethered in the vehicle. Drivers make their own reservations via the Internet in a few seconds. Reservations can be made up to a year in advance, for as little as one hour, on any vehicle in the system, depending upon predefined access parameters. The vehicle ignition is disabled until the reserving driver's proximity card is presented at the right time on the right vehicle. This technology enables secure access 24 hours a day, 7 days a week, without any administrative staff.
There are four major components of this integrated system:
* user sign up, orientation and vehicle scheduling system
* Tracking, billing, and reporting system (both for members and fleet)
* A wireless in-vehicle box and
* A full ticket system (problem tracking and resolution).
Major Benefits
* Improve fleet utilization. Because drivers reserve the cars only for the time they need and use, multiple drivers from different departments can easily use the same vehicles on the same day, With no need to hand off the keys from one driver to the next, efficient scheduling results in improved fleet utilization. Depending on patterns of usage and the size of the fleet, vehicle inventory can be reduced significantly.
* Free up personnel. With the tasks of key management, departmental billing, and fleet scheduling completely automated, personnel managing these tasks can be re-deployed.
* Decrease the number of dedicated vehicles; increase pooled fleet vehicles. Because scheduling and reliable vehicle access guarantees vehicle availability, some drivers who have underutilized dedicated cars may be able to use pooled fleet vehicles instead.
* Eliminate paperwork. The system is completely automated with excellent real time reporting: no written logs.
* Enhance access. The entire pooled fleet is available 24 hours a day, 7 days a week. Additionally, cars can be placed in any geographic location rather than a central pool, making it more convenient and efficient for the drivers.
Personal Auto Program
Employees with infrequent emergency call-out responsibilities or transportation needs were encouraged to avail themselves of the city's existing Personal Auto Program that provides a per mile reimbursement to employees using personal vehicles for business-related travel. The city's Office of Risk Management provides insurance coverage for the portion of personal vehicle usage that is business-related.
Vehicle Allowance Program
Created pursuant to this fleet reduction project, certain employees may be eligible for a fixed annual vehicle allowance. The allowance is set at a fixed monthly amount and is intended to fairly compensate and accommodate those employees who have emergency response duties but do not require a city vehicle to perform them.
A draft report that summarized findings for each department was produced and identified relinquishment candidates. Because successful implementation was directly related to the extent of departmental acceptance of or acquiescence to the findings, it was important to give Philadelphia fleet users the opportunity to review findings and recommendations to solicit their input and guidance. Initial relinquishment recommendations established a starting point for "negotiations" with departments, which were concluded at some point to the satisfaction of both parties, and then vehicles were turned in.
RESULTS
Culture Change. Prior to the project, Philadelphia had deeply ingrained cultural obstacles including: employees who felt entitled to vehicles; a lack of accountability due to the near absence of usage data; inefficient resource allocation of pool and passenger vehicles (separately by department, without internal cost allocation); and inefficient usage. Many of the vehicles relinquished were personally assigned take-home vehicles formerly possessed by regular employees, senior executives, and even departmental commissioners. Taking vehicles from these people sent a strong message that a significant policy change was taking place. Further, many of the city-owned passenger vehicles relinquished had been used for "non-business" purposes, although tracking or verifying illegitimate activity was virtually impossible. Now, PhillyCarShare's invoices provide accurate usage reports by employee, increasing individual accountability and reducing the tendency for cars to be used for unauthorized purposes.
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