The hidden costs of unsafe driving - and how companies can manage them

With over 125,000 fatalities and up to 50 million injuries on the world’s roads each year, the human cost of distracted and unsafe driving is tragic and undeniable.

Thankfully not all unsafe driving leads to a collision and not all collisions involve human damage. However, all unsafe work-related driving hits businesses where it hurts – right on the bottom line.

In this blog post, we look at the unexpectedly high cost of unsafe driving, and the significant savings businesses can realise by implementing an effective driver safety programme.

Bias to inaction

Most businesses are aware that their employees aren’t angels on the road, but it is easy for managers to turn a blind eye. 

After all, collisions are infrequent (taking place on average around every 60,000 miles), companies operate in a fast-paced environment, and (outside of traditional fleets) driver safety is rarely any one employee’s number one priority (although it is coming more and more onto the radar at Board and C-Suite level).

Furthermore, the overall cost of unsafe driving is rarely consolidated and hard to pinpoint, making it difficult to create a business case for action. Until now!

Breaking down the costs

We can broadly break down the costs of unsafe work-related driving into the following buckets:

• Insurance. Safer driving leads to a reduction in both the frequency of collisions and the average severity of each collision, and this feeds through over time into more competitive insurance premiums.
  
  As a rough estimate, there could be a gap of greater than £300 between the insurance premium on a company car from a fleet with a ‘good’ vs. ‘bad’ collision record.

• Uninsured losses. Insurance premiums are a relatively visible cost for a company. But this is just the tip of the iceberg - less visible and far larger are the uninsured costs of collisions.

  

  In fact, the International Loss Institute estimates that for every £1 paid out by an insurer in relation to an incident, the real cost to a company is between 8 and 53 times that amount when the full cost of deductibles, employee downtime, replacement vehicles, loss of business, brand reputation, and administrative hassle are accounted for.

• Vehicle Maintenance. Unsafe driving leads to greater wear and tear on company vehicles, meaning that parts need to be replaced more frequently, vehicles spend more time off the road being serviced, and company-owned vehicles need to be depreciated at a faster rate on the company balance sheet.

• Fuel. Unsafe driving also correlates to more unecological driving. With fuel costs as high as £4,000 per annum for a frequent company driver, even a small improvement in miles per gallon can drive significant cost savings, right to the bottom line.
  
  The Brightmile app also includes a mileage expensing manager, allowing companies greater visibility over the accuracy of expenses claims.
  
  Furthermore, this is a cost saving that applies to any vehicle driven for work including grey fleet drivers.

• Fines. In the UK, companies have a Duty of Care to drivers under Health & Safety legislation, breach of which could lead to large fines (based on a percentage of company turnover) or even a corporate manslaughter charge where a fatality occurs.
  
  In the USA, liability is even greater – the average cost of a loss related to a fleet vehicle accident is $70,000 and the record employer pay-out in relation to a fatality caused by a company driver whilst distracted is an eye-watering $21.6 million.

Aggregating the costs

The precise cost of unsafe workplace driving, and therefore the potential gains from addressing the issue, will of course vary between businesses and depend on fleet structure (e.g. type of vehicle, owned vs. leased vehicles etc.).

However, we conservatively estimate that, in the majority of cases, savings in excess of £500 per vehicle can be realised by implementing an effective driver safety programme.

And if this number doesn’t immediately make you sit up and take notice it should be remembered that these savings go straight to the bottom line. 

So a company operating on a 10% margin would need to bring in an additional £5,000 of revenue per employee to have the same impact on profitability.

Enter Brightmile

At Brightmile, we know that defining potential cost savings means nothing without an implementable plan for achieving them.

That’s why we help our customers to ensure effective realisation of these savings in the following ways:

• Return on Investment. It’s all very well making savings across the business, but if these are swallowed up by the cost of the programme itself then the bottom line impact is negated or perhaps even out-weighed.
  
  As a software-only solution, Brightmile offers a free pilot, no upfront costs whatsoever, and single digit monthly rates, making it easy for our project sponsors to build a business case and deliver a high Return on Investment.

• Getting up and running. We know that each company is different, so at the start of each project we sit down together with our customers to ensure effective on-boarding and programme structure.
  
  Technically, Brightmile can be up and running at the click of a mouse, but we don’t hand over the keys until each customer is set up for success.

• Ongoing support. We also work with our customers throughout the programme.
  
  As per our previous blog post, we engage the majority of drivers to sustainably change their driving behaviour via a number of modern gamification techniques embedded in the Brightmile app.
  
  Other drivers will require more active intervention from company managers - the Brightmile team is available to advise on this and we are also able to offer automated hands-on driver training that is tailored to our assessments.