Bloomberg Government Insider

Philadelphia's Savings in Fleet Management


Philadelphia's Savings in Fleet Management

Photograph by Sacramento Bee/Zuma

Philadelphia, seat of the American Revolution, undertook a revolutionary way to cut costs when the city’s government dumped more than 700 cars from its nonemergency fleet and started renting from Zipcar (ZIP).

Under an entrenched system common in many local governments, cars had been assigned to individual employees, who came to view them as their personal wheels. The vehicles often sat idle during the day, even when other workers on city business needed a ride, then went home at night and on weekends.

Faced with a citywide budget crisis in 2004, the Office of Fleet Management (OFM) set up a system under which employees reserve a rental car electronically for official business, specifying the time, date, destination, and official purpose. Cost savings have averaged $1.8 million per year, according to K Wilson of OFM’s budget office, through reduced spending on auto maintenance, fuel, and parking charges. Those costs are now the responsibility of Cambridge (Mass.)-based Zipcar, which took over the contract from a nonprofit in 2008.

“The public sector has to become more like the private sector,” says James Muller, who heads the OFM and came up with the car-sharing idea. “The old days when government was perceived as being less than efficient have to end.”

Under the old system, with the OFM shouldering all costs, there was little incentive for the city’s individual departments to monitor use. Now devices installed in all cars log the number of miles driven, so Muller and his crew can track activity and spot any abuses.

David Wilson, OFM’s first deputy for administration, points out that the program has environmental benefits, too, as many of the autos supplied by Zipcar are hybrids. A Zipcar spokeswoman declined to comment, saying that only OFM was authorized to speak about the program.

Philly’s experiment has not gone unnoticed. In 2006 the project was nominated as one of 18 national finalists for the Innovations in American Government Awards, which are overseen by Harvard University’s John F. Kennedy School of Government.

Muller, who began his career more than three decades ago as a city auto mechanic and is set to retire later this year, is proud of what has been accomplished. “Looking back, I think we’ve made a positive difference,” he says.

Dolgow is an intern for Bloomberg Businessweek.

Later, Baby
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