Tell us about Corporate Reimbursement Services’ current focus?
Initially, our focus was primarily on vehicle reimbursement, hence the name: Corporate Reimbursement Services. Our primary goal was to transition companies out of fleet programs based on company-provided vehicles into a reimbursement model. Our business model depended on convincing a company that they were better off shifting from company-provided fleet vehicles to reimbursement.
We have evolved from that model. Now, our focus is primarily on our clients’ mobile employees and ensuring our clients have access to technologies, services and solutions that will equip those mobile employees with the best solutions to conduct their jobs in the most productive manner. In fact, this evolution has led us to rename and rebrand the company from Corporate Reimbursement Services to Motus, Latin for “motion”, later this year.
Does that mean reimbursing employees for the personal use of their own vehicle or reimbursing them for expenses they incur on the road?
Both. Originally, our technology platform was designed to calculate how much to reimburse an employee for the business use of their personal vehicle. By reversing the process, our technology can also be used to calculate how much an employee should be charged for the personal use of their company-provided vehicle. You can think of it simply as putting it into reverse, it’s the same platform, it’s the same application.
What are the benefits of a fleet based on reimbursed cars vs. the corporate provided vehicles — owned or leased?
Reducing risk and liability is the number one reason why companies call us. That can be attributed to the liability and the risk exposure associated with a company-provided fleet vehicle. There are differences in the type of exposure.
When a company provides a vehicle, generally the company is liable 24 hours a day, 7 days a week. If an employee is out on a Saturday night, has a couple of drinks, gets into an accident, God forbid he or she injures someone, the company will be responsible for that. Many clients have come aboard because they found themselves in an unfortunate situation that resulted in them settling a significant claim.
A properly run reimbursement program significantly mitigates corporate risk and exposure. It moves the liability of the company from 24 hours a day, 7 days a week with the company provided vehicle, to only being liable during business use.
Even if there is an incident during business use, the individual employee’s policy would kick in as primary and the company would be considered secondary. In other words, they would only be responsible for any claims that went above and beyond that individual driver’s policy.
If something were to happen during non-business use, generally nights and weekends, it would now have nothing to do with the company whatsoever. So, statistically, it does represent a fairly significant variance in the type of liability and risk exposure to the company.
What other benefits does your technology provide?
Our technology gives a company the ability to fairly reimburse the employee for the business use of their personal vehicle, or to fairly charge for the personal use of a company-provided vehicle. That puts a company in a position where they can provide either as an option, where it really becomes nothing more than personal preference for the employee. Our platform supports both models equally well.
When a company tries to determine whether it makes more sense to provide employees with a company-provided fleet vehicle, whether it be leased or owned, or to reimburse the driver for the business use of their personal vehicle, there are several different key variables.
What we have been able to demonstrate time and time again, is that if a company reimburses a driver for the exact same vehicle that it otherwise would have provided, the company will save $3,000 per driver, per year, just by choosing reimbursement. The bulk of that cost savings is from the elimination of unreported personal use.
However, if a company is accurately charging for the personal use of that company provided vehicle, the economics should end up being about the same. That’s why companies have found it very exciting that they can leverage our platform, our technology, to calculate a fair and accurate personal use chargeback for each driver, each month, based on their actual personal use.
Now, from a cost standpoint, with our technology, even if a company wants to provide the option of both programs, they come out about the same. They may tell the driver, “If you would prefer some of the convenience or perceived benefits with a company-provided vehicle, we will give you that vehicle. If you would prefer a reimbursement program because you would prefer the flexibility and choice; that is great.”
Either way, if the company has a program in place that is going to fairly and accurately reimburse a driver for the business use of their personal vehicle or fairly and accurately charge the driver for the personal use of that company provided vehicle, cost-wise, it is going to be about the same.
At this point, it’s more of a cultural decision. There are still some companies that are better off only reimbursing. There are companies that are definitely better off only offering a company-provided vehicle.
It seems to us, that most companies are probably best off by providing a combination of both. It’s along the same lines of, “does it make more sense for us to require our employees to wear a suit and tie or does it make more sense for us to allow business casual?” Is it a JP Morgan culture verses a Google culture? Does it make more sense that we have the floor-to-ceiling windows and a very buttoned-up environment or does it make more sense to have bean bag chairs and colorful trinkets on the desks? That is a cultural question or a cultural dilemma for a company to solve. We feel as though reimbursement vs. company-provided falls into the same category. Culturally, there may be one that makes more sense for your employees.
We understand that your technology can be used equally well for company-provided vehicles or reimbursement. But let’s talk in more detail about reimbursement models.
We provide a significant amount of customization or flexibility for the client. A key point is that we don’t tell the client how much they should be reimbursing their drivers. We will provide consultative guidance if they ask us, but more often than not the question is reflected back to the client: “What are your financial goals and objectives? What are your cultural goals and objectives? Let us design a program that insures both are successfully addressed.”
For instance, if a company is looking for a “richer” reimbursement program, they can choose a series of parameters that would produce a richer reimbursement rate. For example, they can base their reimbursement on a more expensive vehicle. Or, they can base their reimbursement on a shorter retention period. Do they want to pay for their drivers to be able to replace their vehicle once every two years or once every five years? It is going to mean a richer reimbursement if the drivers are reimbursed as if they are replacing their vehicle more frequently. It is going to be a richer reimbursement if you want to reimburse the driver for a $27,000 car than if you want to reimburse the driver for a $17,000 car.
Our clients rely on our expertise to select the right combination of program parameters, which ultimately determines just how rich or lean that program is going to be. Most of our clients will have multiple sets of parameters. For example, they may say we are going to reimburse their sales reps on an Impala, or its equivalent, managers on a Camry, and VPs on an Explorer. Clients tell us what parameters to apply to any particular group of employees. We then calculate a fair, accurate, and defensible reimbursement rate for those groups of employees, based on the parameters that the company has selected.
Can you share a success story?
I am proud to say that we have a long list of those. I suppose one of the first to come to mind is one of our earlier clients. This was a company that transitioned onto our program to provide drivers with a fixed and variable rate reimbursement. They started with about 5,700 drivers on our program, which is a great-sized client. As we have innovated and developed more solutions and more features on our platform, this client has readily embraced our new offerings and has typically been one of the first clients to adopt some of the new technologies.
They had a population of drivers that were part-time, low mileage drivers and were using a Concur program to reimburse those drivers on a cents-per-mile basis. So, we had to develop a technology that was designed for lower mileage drivers. These are drivers for which a fixed and variable methodology wasn’t the most appropriate and we had a cents-per-mile solution that made a lot of sense. When we rolled that out, they immediately signed their drivers on and added another 10,000 to 12,000 drivers.
They also have employees that are hourly and were using our technology to clock-in and clock-out. In addition, they use some of our technologies that relate more to general expense management. They still have some drivers that are in fleet vehicles and are benefitting from the application that calculates how much to charge those employees for the personal use of the company provided vehicle.
They are a real success story, I think, really in two ways. They viewed their relationship with us as true partnership, because as their business has evolved over the years, they have found that we have been right there, side-by-side. Because of our commitment to technology and innovation, we have been innovating in a way that has enabled us to provide increased value to them over time.
How do you position yourself in the market? What is your edge?
As far as our edge and how we position ourselves in the market, we have really evolved to be more of a technology company and a platform on which we offer and deliver these services. We have talked a little bit today about the fact that we have some clients that are just on reimbursement. We have some clients that are just on fleet, and they are using our technology to calculate how much to charge employees for the personal use of their fleet vehicles. We have a significant number of clients today that are now on a combination program of both fleet and reimbursement.
That really changes the way we position ourselves and the way we market ourselves in the industry. We are not out there anymore trying to convince a company that they should not be providing fleet vehicles. We are not out there trying to convince a company that they are better off reimbursing than providing fleet. We are able to take a step back and objectively guide our clients through that decision, whether reimbursement makes more sense, whether fleet makes more sense, or whether a combination program makes more sense.
At the end of the day, we have solutions for any of those situations. So, we don’t have any vested interest in trying to convince a company that it is better off one way verses another. And that is a very different message, as we understand it, in the marketplace. We understand from the marketplace and from clients and prospective clients, that it is a very different message. It is very different position that we are taking on this particular issue, and it’s why, as I mentioned earlier, we are in the process of rebranding the Company from Corporate Reimbursement Services to Motus.
Gregg Darish is the Founder and Executive Chairman of Motus, LLC (formerly, Corporate Reimbursement Services, Inc. (CRS)), an innovative and award-winning company that provides the leading software-as-a-service (SaaS) mobile workforce management platform. The company’s integrated solution offers automated vehicle reimbursement, fleet personal use capture, expense management, mileage tracking, route optimization, and time management solutions for companies with mobile employees.
Gregg is a nationally recognized expert on IRS tax law and accounting regulations relating to vehicle reimbursement. He currently advises hundreds of companies, including many of the Fortune 500, on best practices for managing costs and compliance, mitigating liability and risk exposure, and increasing efficiencies.
An active leader in the business and non-profit communities, Gregg is a board member of Young Presidents Organization and sits on the board of several non-profit organizations. Gregg attended Northeastern University where he majored in Business Administration and minored in Entrepreneurship.