NYC’s Fleet Management Plan to Reduce Fleet Costs by $71 Million

NYC fleet vehicle police carA recent report from New York City Mayor Michael Bloomberg’s Office included recommendations that will save NYC taxpayers an estimated $71 million in fleet management cost over the next four years by streamlining government fleet management, centralizing fleet operations, cutting vehicle fuel use, and decreasing the number of fleet vehicles. It’s part of the Mayor’s overall plan to save taxpayers over $500 million over the next four years by significantly increasing government efficiency.

According to the NYC Mayor’s Office report “the city spends approximately $667 million annually on fleet operations — this includes $283 million on maintenance, $120 million for fuel, $14 million for fuel tank compliance, maintenance, and spill remediation, and approximately $250 million for vehicle and equipment procurement. Maintenance expenditures consist of salary, which includes overtime, differential and fringe benefits; overhead – including building maintenance and rent; and vendor expenditures,  including parts and maintenance services. Salary alone represents 70% of the NYC’s expenditures for maintenance.”

Bloomberg’s administration wants to centralize the city’s fleet operations. One of the best ways that the NYC Mayor plans to reduce fleet costs and improve fleet efficiency is by implementing a GPS Fleet Tracking System and Management Software. Implementing a GPS tracking and management system will help the city to cut costs and improve fleet operations simultaneously. The report showed  high quantity of decentralization across the city’s fleet operations which is not very efficient. The city employs more than 1,500 fleet management people that repair vehicles at 126 shops, each with their own set of equipment, staff, and parts inventory. Based on these numbers alone, it is clear that there is room for improvement in the fleet operations department.

The report outlined the following challenges in fleet administration:

  • There’s limited attention to customer service and streamlined processing
  • Fleet Management utilizes inconsistent performance metrics to track operations
  • There is limited transparency and accountability for the fleet operational costs
  • Redundant and decentralized resources exist across all 9 fleet management agencies (e.g. fueling, maintenance, and technology)
  • Fleet vehicles are not optimally right-sized
  • Citywide standard operating procedures for maintenance parts management and fueling are either unclear or non-existent
  • NYC  maintains outdated systems for vehicle tracking

In order to improve the fleet management operations and cut costs by $71 million, the following changes were recommended:

  • Agency maintenance shops will be consolidated; outsourcing of fleet parts management will be considered
  • Outside maintenance service contracts with commercial repair shops will be considered may be required to ensure success of the maintenance consolidation process
  • Standard performance metrics for fleet maintenance and fueling operations will be created. The city will manage a city wide database to improve accountability and transparency of fleet operations. This will help agency managers easily identify trends in their agency’s vehicle use, reduce downtime, decrease the number of fleet vehicles, reduce fuel use, and avoid expensive breakdowns by providing preventative maintenance on a regular and consistent basis.
  • Fueling operations will be consolidated and some fueling stations will be totally eliminated
  • The use of more car-share programs will be considered
  • A Committee for Fleet Management will be responsible for creating and implementing the city’s fleet policies and standard operating procedures
  • The city will consider privatizing the auto auction process and online purchasing services from reputable auto retailers in order to leverage nationwide buying power

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