Article

Fleet Reduction and Culture Change in Philadelphia: 10 Steps to Success

July 2005, Government Fleet - Feature

by Jeffrey Friedman and Robert Fox

Motivated by a tight budget and the desire to develop and implement best practices, the city of Philadelphia committed itself to reducing the size of its vehicle fleet. As a result, the city will avoid $9 million in spending over the next five years because it has eliminated 330 vehicles, approximately 6 percent of the fleet. This cost-avoidance calculation includes acquisition, parking, maintenance/repair, and fuel. This total also includes an expenditure offset for Philadelphia’s groundbreaking automated vehicle-sharing program. No department or type of employee was exempted from this fleet reduction program: the police and fire departments participated, and directors and commissioners as well.Philadelphia achieved these results by following these 10 steps:1. Appreciate the importance of reducing fleet size.
Fleet size is the super-variable driving overall costs. Aggregate fleet costs (FC) can be represented by the equation, FC = [A + R/M + F + I/O] x #V, where A = acquisition expenditures, R/M = repair/maintenance costs, F = fuel costs, I/O = indirect/overhead costs, and #V = number of vehicles. The right side of the equation is calculated for each departmental vehicle class (using averages for the four variables) and then summed to determine aggregate fleet costs. Regardless of how well costs are managed and efficiencies generated through process reengineering for the first four variables, fleet costs will be proportional to the overall fleet size.2. Get high-level buy-in.
Fleet reduction advocates initially secured the support of the mayor, finance director, and managing director. Getting the CEO, CFO, and COO’s support was critical to the project’s ultimate success. Also, the project team regularly doubled back with these senior personnel to ensure continued support of orientation and strategy.3. Assemble a representative and authoritative project team.
The project team included representatives from the finance department, managing director’s office, office of fleet management, and public financial management. This representative project team had the stature, capacity, and autonomy to move this complicated project forward in a politically and sometimes emotionally charged environment.4. Identify ambitious quantitative and qualitative goals.
From the beginning, the city committed to purging underutilized and passenger vehicles (primarily sedans and SUVS) from the fleet with an overall goal ranging from 300 to 500 vehicles. Establishing this goal early on ensured that the project team remained focused on results. While we wanted to reduce the fleet and save money, we also wanted to change the entitlement culture involving personally assigned sedans and SUVs.{+PAGEBREAK+} 5. Develop implementation strategies.
Two implementation strategies drove this project: First, as practicable, sedans and SUVs were removed from the fleet, and second, vehicles subjected to fewer than 8,000 miles per year were relinquished unless their retention could be justified.6. Develop accommodative measures.
To mitigate and eliminate negative impacts on service delivery, the city of Philadelphia promoted its existing mileage reimbursement program and created automated vehicle sharing and vehicle allowance programs for employees who were compelled to relinquish their vehicles.7. Innovate.
Philadelphia’s municipal automated vehicle sharing program (AVSP) is the first of its kind in North America. Employees can now quickly make reservations via the Internet or telephone and use vehicles for periods as brief as one hour. Employees can access a pool of vehicles - managed by an external partner - through AVSP technology that enables secure access 24/7, without any administrative staff. For more general information about car sharing in Philadelphia, go to PhillyCarShare’s Web site at www.phillycarshare.com. For more information about car sharing in general, go to the Car Sharing Network’s Web site at www.carsharing.net.8. Create supporting policies and procedures.
Implementation strategies and vehicle-assignment policies were memorialized so fleet reduction and containment efforts are advanced consistently in the future. Policies include clear direction on the appropriate use and assignment of city-owned vehicles.9. Follow up and follow through.
The Fleet Reduction and Containment Committee (FRCC) has continued to communicate and meet regularly to discuss project advancement. Its persistence and tenacity has indicated a strong and ongoing commitment to fleet reduction, which has elicited both respect and compliance from departments and agencies.10. Never stop.
Prospectively, it is the intention of the FRCC to continue efforts to reduce and contain the fleet. Monitoring the size and configuration of the fleet should be an ongoing process, with opportunities for downsizing and optimizing constantly identified and acted upon.A Tremendous Success
The reduction project has been a tremendous success and Philadelphia’s automated vehicle-sharing program has garnered international attention. Not all are satisfied with the results, though. Losing a personally assigned vehicle and adjusting to a new culture of efficiency and innovation have been difficult for some. However, there have been no discernable negative service level impacts, even with a fleet that is hundreds of vehicles smaller than before. While more nuance and detail is required to inform and successfully implement a fleet-reduction project than articulated in these 10 steps, we believe to have provided a summation of the critical elements. Although this project took the time and dedication of many, it is an initiative that could be implemented by any state, county, or local government.

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