The business case for automated mileage capture and how to gain acceptance

Automated mileage capture brings substantial financial benefits to a business when brought in to replace manual expenses submission, and as such is common policy even in jurisdictions like France and Germany with the strictest data privacy laws.

But, given that the policy involves mandating employees to disclose their locations to claim reimbursement for their fuel expenses, it can come under scrutiny from Data Privacy teams and Workers’ Councils before implementation.

In this article, we outline:

  1. The clear business case for automated mileage capture
  2. The legal considerations in GDPR countries
  3. Some tactics for gaining acceptance of Workers’ Councils.

The Business Case

There are two key drivers of cost savings when comparing automated mileage capture with a traditional ‘expenses’ reimbursement solution without mileage capture.

The first is to ensure that business vs personal mileage is accurately recorded (not estimated at infrequent intervals like the end of each month) and submitted at the correct rate. With a traditional ‘expenses’ reimbursement solution, we almost always see that:

  1. Very rarely do expense claims get recorded accurately or properly (for example, the precise distances, whether the trip took place, and whether the trip was for business or personal purposes); and
  2. Expenses systems aren’t always that good at calculating the correct reimbursement amounts. Typically, organisations use various reimbursement rates which are linked to fuel type and engine size. Drivers can easily (and mistakenly) input the incorrect vehicle and engine sizes when requesting reimbursement.

Automated mileage capture ensures that each trip for which expenses will be claimed is backed up with an accurate trip record and submitted with the correct rate. Typically, the range of savings associated with accurate and compliant mileage records can be anywhere between 10% and 18% of the fuel bill depending on nature of fleet (e.g. LCV versus company car/cash).

Secondly, in many countries throughout Europe, if an employer provides beneficial fuel to drivers there is a benefit charge (called ‘social charge’) that the employee pays, and another social charge that the employer pays (like National Insurance).

Getting an accurate split of business vs personal mileage allows employees and the corporate to benefit from reduced social charges and taxation. Specifically, in France, there is a high cost when fuel for company car drivers is treated as a benefit (whether implied officially or not).

As an example, on a fleet of 1,000 vehicles, the difference between separating business and private fuel where the employee is responsible for their own fuel can be more than €500,000 per annum.

Legal considerations in GDPR countries

In order to ensure GDPR compliance, companies need to ensure that:

  • the processing of Personal Data in relation to automated mileage capture is done for a “legitimate interest” and in a proportionate way to achieve that interest,
  • personal data is being collected and processed in a secure and appropriate way
  • the drivers can exercise all of their other rights in respect of their Personal Data.

Taking these in turn:

1. “Legitimate Interest”

  • Materially reducing operational costs is a legitimate corporate interest in accordance with Article 6 of the GDPR.
  • Processing Personal Data, including the start and end location of trips taken for business purposes, is necessary to implement automated mileage capture and achieve this interest in the form of substantially reduced fuel bills (see “The Business Case” above).
  • This is the basis upon which many companies, even in France and Germany, are able to mandate the usage of automated mileage capture solutions as part of their company expense policies.

2. Proportionate approach

  • The specific approach taken will depend upon the vendor chosen to deliver the service.
  • At Brightmile, when we deliver automated mileage capture & reporting, we ensure a proportionate approach with the following measures:
    • The driver has full control to classify Trips captured as “Business” or “Personal”.
    • Only Trips classified by the Driver as “Business” will be included in the mileage reports to be submitted to the employer.
    • Only start and end locations, as well as total mileage driven, of previous Trips (i.e. never real-time locations), are reported to an employer.
    • Trips are automatically captured, to save the Driver the time and hassle of manual start/stop, however “Privacy mode” enables the Driver to pause all data collection at any point in time.

3. Personal Data Security & Processing

  • Ensuring that appropriate levels of personal data are being collected in order to achieve the objective and that this personal data is being processed in a secure and appropriate way, will also be a vendor-specific exercise.
  • A Data Privacy Impact Assessment (DPIA) and IT Security review is commonly conducted before the initiative is fully implemented.

4. Exercise of rights

  • Again, ensuring that drivers can exercise their rights in relation to their personal data will depend upon the measures and processes put in place by the mileage solution provider.
  • At Brightmile, we process personal data in accordance with our Privacy Policies (publicly hosted for Android and iOS), which clearly set the drivers rights as data subjects and how they can exercise them.
  • Each Driver also acknowledges the Privacy Policies before they are able to sign into and use the Brightmile App.

Tactics for gaining acceptance of Workers’ Councils

As well as GDPR compliance, it will often be necessary to gain sign off from a Workers’ Council in order to implement an automated mileage capture initiative. Here are some tactics and arguments that have proven effective in securing a green light:

  • Clearly lay out the business case and the legal/data privacy position as per the above sections.
  • A case can also be made that employees, as well as the employer, will be better off following implementation of the policy:
    • In France, there is a heavy burden of taxation where companies are paying for fuel that their employees use for personal trips - reducing these social charges can see the driver materially better off.
    • In addition, being able to accurately determine the costs of providing private fuel helps with the setting of policy and potentially a better benefits offering for employees. Either better grade vehicles could be deployed, or vehicles with higher specifications and safety features made standard. Having the accuracy of the data and the ability to plan vehicle policy and selections helps to produce a better and more cost-effective offering for employees.
    • And finally, where mileage capture tools have inbuilt safety solutions, driver wellbeing is visibly at the top of the agenda. Workers’ Councils are aligned with company management in their incentive to get employees home safely to their families at the end of each day, and implementing a driver safety solution is proven to drive a 25-35% reduction on collision rates.

 

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