Managing Your Fleet

What will fleet management look like in 10 years?

6 min read

27 March 2019

As consumers and businesses alike demand flexible mobility solutions, the future of fleet management will be defined by technology and innovation.

Fleet management is constantly evolving but the industry is currently undergoing an unprecedented transformation, especially within the UK. The combination of changing mobility habits, macroeconomic conditions, government policy and disruption through technological innovation is driving a shift towards a cleaner, safer and more efficient model of fleet management.

The customer comes first

Firstly, we can best envisage the future of fleet management through the ongoing shift in focus from the asset to the end-user. Customer centricity is defining the service mobility providers now offer – no longer is the vehicle the most important element.

Customers are becoming increasingly demanding and are already seeking access to flexible mobility solutions, especially in urban areas. We are starting to see business travellers incorporating mixed modes of mobility into their regular journeys covering everything from rental vehicles to public transport and on-demand ride-hailing services such as Uber.

The rise in the subscription economy is percolating through to the B2B market too, which has led to the creation of car clubs and sharing services. We expect this to be a large category for growth within the next decade, especially in cities where it may not be economically viable to own a vehicle in future.

Flexible fleets

Customers will want greater choice and flexibility, a behaviour driven by the current economic climate, but a trend expected to continue over the next ten years.

Uncertainty due to Brexit is already affecting business mobility decisions and many companies are reluctant to invest in depreciated assets or longer-lease contracts.

Currently, short and medium-term solutions such as daily rental are already proving popular as fleet capacity can be scaled up or down very quickly and easily as demand requires. Businesses only have to pay for vehicles when they need them, which avoids downtime and unnecessary expenditure as fleets become more efficient.

Mobility suppliers are responding to this shift. For example, similarly to how Uber has grown to become the largest taxi provider without owning any vehicles, Nexus was founded by spotting a gap in the market by connecting business customers to the UK’s largest vehicle supply chain. We achieved this without needing to own any assets, keeping costs lean.

Legislation nation

Decisions like this are also being driven by government policy. The ongoing demonisation of diesel will mean smaller diesel vehicles for everyday journeys will soon be a thing of the past – there is still some way to go for hauliers and HGV operators, however. The ban on new diesel and petrol vehicles by 2032 is ambitious but the direction of policy is necessary as we transition towards a cleaner mobility future.

Government plans also mean that all vehicles must effectively be ‘zero emission’ by 2040. While this requires innovative solutions from vehicle manufacturers, fleet managers will increasingly be considering low-carbon alternatives like electric vehicles (EVs). The creation of Ultra-Low Emission Zones (ULEZs) – launching in April 2019 – and the introduction of congestion charges are also fuelling this shift for fleet managers operating vehicles in urban areas.

Currently, the main barriers to EV adoption are battery range and charging infrastructure, as well as cost, but once these have been cracked, we can expect to see fleets of EVs transporting people and goods around the country. For business travellers, EV sharing clubs will be the norm in ten years with some suppliers already offering hourly rates.

Likewise, logistics firms and courier companies will operate silent vehicles through the night to fulfil their delivery requirements while avoiding congestion charges.

Innovation and intelligence

Helping to drive these transformations is technology. The proliferation of fleet management software and vehicle innovations have provided customers with the digital capabilities to demand the exact vehicle they want, in the right place and at the right time.

The Internet of Things (IoT) and the connected car will continue to grow in importance. Artificial Intelligence (AI) will continue to be built into vehicles and fleet management processes and one day soon we may be able to summon an autonomous vehicle through a voice-activated assistant. While once the dreams of science fiction films, we are not that far away from this being a reality – although don’t expect this within the decade.

All in all, the future of fleet management can be defined by “usership” rather than ownership. While government policy and economic uncertainty will persist for the short and medium-term, the future of fleet management will be defined by technology and innovation as Mobility-as-a-Service (MaaS) grows in popularity.

Consumers and businesses alike are demanding flexible, multi-model solutions that make mobility more efficient.

Eventually, we will see autonomous EVs being hailed by smartphones but until then, the focus for fleet managers will be to provide the most effective and efficient form of transport.

David Brennan is CEO at Nexus Vehicle Rental