An exercise in cost saving: carsharing.

• Author: Friedhan, Jeffrey Allen
• Position: Philadelphia, Pennsylvania

Fleet 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...