Businesses fail to plan properly for e-tolls

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IOL pic aug15 etoll highway Independent Newspapers File picture: Thobile Mathonsi

Despite the roll out of e-tolls on Gauteng freeways last year, only 14 percent of companies with vehicle fleets have an account with the SA National Road Agency, according to the findings of a new comprehensive survey of the country’s vehicle fleet market.

In addition, 47 percent of firms have not made provision in their vehicle fleet policies to cater for these toll costs, while only 38 percent reimburse employees for e-toll costs that are incurred on business mileage

. This implies that 62 percent of companies expect employees to fund the additional costs.

The findings were obtained in a survey of 107 medium to large corporates conducted by Eqstra Fleet Management in association with Jerry Botha of Tax Consulting into how corporate travel is being managed in South Africa. These firms employ about 243 000 people and operate about 36 000 company vehicles.

The survey revealed that 10 percent of firms used an e-toll strategy linked to a fuel card; 29 percent were aware of e-toll payment strategies but were not concerned about it.

The survey also showed that 45 percent of companies had traffic fines redirected to their drivers, which indicated that most firms were not compliant with or aware of the Administrative Adjudication of Road Traffic Offences rules.

Fuel

Fuel had become the single biggest expenditure in business travel, contributing more than 40 percent of all vehicle fleet-related costs.

The proportion of firms that allowed employees to choose between a company car or a travel allowance has more than doubled, with 29 percent of respondents providing staff with a choice compared with only 14 percent last year.

The survey said this was largely due to tax legislation neutralising the impact on employees between a company car and travel allowance and was broadly in line with European standards where most companies favoured offering a choice rather than one option.

It found that the percentage of corporates using their own cash reserves to finance fleets had increased to 53 percent from 40 percent last year.

The report said there appeared to be a willingness by corporates to investigate alternative fleet management solutions, with 92 percent indicating they would consider other options if proven to be financially beneficial.

Murray Price, the managing director of Eqstra, said most fleet-funding decisions in the country were still made by a company’s finance department and South Africa was lagging behind global trends because most companies now used procurement departments for these decisions.

The market was also lagging behind global trends in regard to the outsourcing of the finance and management of their fleet, with more than 70 percent of corporates in Europe electing to outsource.

Price said only 30 percent of firms in South Africa outsourced the total fleet-related processes, including finance, fuel, maintenance, telematics and accident management.

“The European trend is far higher towards outsourcing. As local fleet management companies start offering more integrated and transparent solutions, the corporate sector will follow suit in terms of outsourcing the total fleet management process.”



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