Under moves to slash the cost of running its annual $250 million fleet leasing service, the NSW government has initiated car sharing arrangements that require officials to use commercial car hire.
Official use of less salubrious, shared commercial rides is being trialled over the next 6 months. Agencies are invited to join their colleagues for travel, especially across highly-networked metropolitan areas.
NSW’s minister for finance, Dominic Perrottet, said in a statement that metropolitan Sydney offers a pool of high-tech car sharing services. These include the GoGet service as well as Hertz 24/7 and GreenShareCar. These services offer a more efficient alternative to the state-owned fleet, he said.
“Collaborative consumption” in vogue
The government said a car sharing model leverages a new trend involving “collaborative consumption.”
This concept supports a shared economy that enables consumers to share in the cost of using goods or services. Among the trends, peer-to-peer accommodation, peer-to-peer travel or car sharing and commute bus sharing is in vogue.
According to Perrottet, the government is spending too much on providing services that in many cases are readily available and already offered by private sector operators.
“Currently, government and taxpayers pay all associated costs of vehicles regardless of how frequently they are used,” he said.
An earlier review of the government fleet by the Office of Finance and Services has helped deliver savings of nearly $14 million.
“I’ve asked my department to examine the feasibility of private companies having greater involvement in providing vehicles and fleet management services for government agencies,” he said.
In with the crowd
He noted that more competition within government fleet should lower expenses for agencies and deliver savings to government and taxpayers.
“These funds can be redirected to provide new services covering other areas of need,” he said.
A shared model reduces administration charges and enables the government to only pay for the length of hire and the kilometres driven
An earlier Pricewaterhouse and Coopers review of the government-owned StateFleet warned that this service had a monopoly on leasing vehicles to government agencies.
The review recommended greater competition to improve service quality and reduce costs. One key proposal suggested testing the market and deciding if the private sector could help reduce the costs of government fleet leasing and management services.
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