For years, many U.S. businesses have handed employees the keys to a company car with no questions asked. For all these firms know, their drivers may have a suspended driver's license or a very blotchy accident record.
But the cost of an average on-the-job vehicle accident has risen to $8,200, and companies should no longer take such a casual approachto driver safety, executives at the Hunt Valley-based PHH Corp. say.
PHH is banking on the notion that making company drivers safer drivers will be a good line of business. That's why the multifaceted service company has just launched what it calls its "Fleet Safety Program."
Through its FleetAmerica division, PHH manages 325,000 vehicles for such big corporations as Eastman Kodak, GTE, Chevron,Amoco and Travelers Insurance. Through elaborate computer control systems and a network of suppliers, PHH buys, leases, finances, manages and resells cars and trucks for its corporate clients.
Now FleetAmerica hopes to talk its clients into taking a whole new line of vehicle services -- a seven-point program designed to cut the cost of company accidents.
"It's really a win-win. They keep their employees healthier and safer, and at the same time they're saving money," says Eric Kagan, who is overseeing development of the Fleet Safety Program. He estimates that at least half of FleetAmerica's clients, representing 165,000 drivers, will sign on to the safety program within 18 to 24 months.
The sales calls made by PHH on behalf of the new product have been something of an eye-opener for some of the corporate executives visited, Mr. Kagan says. Few are aware that vehicle accidents are the leading cause of on-the-job deaths or that the cost of virtually all vehicle accidents is rising, due in large measure to higher medical care costs.
In addition, Mr. Kagan says, corporate leaders can be naive about their firms' liability when a company driver is involved in an accident.
"How do you defend yourself in a negligence suit when it turns out that your company driver had a suspended or revoked driver's license?" Mr. Kagan says. Yet he says that a number of U.S. corporations lack any systematic method of checking the qualifications of their drivers and lack effective driver training for their employees.
"The liability can be outrageous," says Tom Andrews, a PHH FleetAmerica senior vice president.
The seven-part PHH safety program is sold on a mix-and-match basis, with each client opting for only those components it wants. "There are about 800 ways to buy this," Mr. Kagan says.
PHH is offering these services:
* Help in creating a fleet safety policy. "Most businesses should have a written safety policy," Mr. Kagan says. It should cover who can drive for the company, training standards for drivers and equipment standards for vehicles, he says. The business should define, for example, whether company vehicles should have such equipment as air bags and anti-lock brakes.
* Checking drivers' records. PHH is offering to pull drivers' records systematically from state sources, after first being sure that employees are aware of the procedure.
"It's not responsible for a company to just hand an employee the keys without knowing that they're qualified to drive on company business,"Mr. Kagan contends.
* Providing safety training for drivers. "Most people haven't had any driver training since they got their license way back when they were 16, 17 or 18. Yet driving is the most dangerous thing they do. Imagine telling an employee to operate a dangerous piece of equipment without giving him any training," Mr. Kagan says.
PHH has developed three driver training programs and prescribes the level of training on the basis of the driver's apparent need. The program employs a videotape, a computer simulator and behind-the-wheel instruction.
* Providing vehicle maintenance programs. Although it has no shops of its own, PHH negotiates with a network of shops to provide vehicle maintenance at pre-determined prices. PHH officials make the point that safety is tied to regular upkeep, including checks on tires and brakes.
* Providing emergency roadside assistance. PHH doesn't operate tow trucks or other service vehicles, but it contracts with providers. By negotiating on a mass scale, it is able to obtain good terms for its clients, Mr. Kagan says.
* Maintaining and analyzing accident and vehicle repair records for companies. By carefully tracking such reports, companies can spot trends and make policy changes, Mr. Kagan says.
* Selling vehicle safety equipment kits. For a fee of $75 each, PHH will provide a client company with a state-of-the-art safety kit to be used in the event of a roadside accident. Many company cars and trucks are not now equipped with such important equipment as safety vests, Mr. Kagan says.