This is Part One of a two-part Interview with Mike Hardesty, former Motor Pool Manager for Indiana University.
Mike Hardesty is a seasoned fleet manager with nearly 30 years of experience running the motor pool at Indiana University in Bloomington. A Certified Automotive Fleet Manager (CAFM), Hardesty is a well-respected member of NAFA, having served as the Chapter Chair of the Tri-State IN Chapter, a Co-chair of the NAFA’s Public Service Committee, and an At-Large Director for National Council of State Fleet Administrators.
Part 1: Outsourcing a Motor Pool: Good Idea or Rough Terrain?
Q: Indiana University’s motor pool back story is that you had a motor pool, but it was decided to outsource it before bringing it back in-house. Tell us a little about how that happened.
A: The daily rental portion of the Indiana University Motor Pool was a fleet of 82 units available to faculty, staff and students on approved university travel. The balance of the fleet was 468 units of all types of vehicles and construction equipment. The trustees of Indiana University decided to outsource the entire university motor pool function. We lost internal control of the daily rental pool, one of six services the motor pool provided to the university and most regional campuses. Knowing the trustees wanted to “cash out” the motor pool assets, I chose a leasing partner who bought the fleet vehicles and placed them under lease. The daily rental fleet was sold. We raised about 3.5 million dollars which was transferred to other university accounts. A private rental agency opened a branch office at our motor pool location and began taking rental reservations. While I did not agree with the decision, it was made by personnel who were not well-informed about how the motor pool provided essential transportation services that enabled other university departments to meet their goals.
Q: How did people like the outsourced motor pool and what effect did it have on personal vehicle use?
A: People were very unhappy because many of the services were no longer available and costs were higher. At the same time, travel reimbursement on personal vehicle use rose sharply as drivers preferred to use personal vehicle instead of driving vehicles provided by the rental company. Paying for personal use of vehicles was at a much higher cost than utilizing vehicles traditionally provided by the motor pool.
Q: Your fleet had special vehicle requirements in rough terrain. How well did the outsource partner handle that?
A: The university owns and operates a Geological Field Station in a remote location in Montana. The Geology Department holds classes there each summer. The field station requires vehicles that are off-road and can handle rough terrain. Before outsourcing, our motor pool worked hand-in-hand with the Geology Department to ensure they had the right vehicle types to do the job.
During the outsourcing, the first year was a disaster. Some of the vehicles didn’t have the clearance needed to handle rough terrain. The tires were too light to handle the off-road conditions. When the vehicles were returned, the Geology Department was forced to pay significant chargebacks. Some of the vehicles were disabled for long periods at the station since the closest tire repair shop was miles away.
In the second year, the Geological Field Station purchased 10-ply tires for all of the vehicles and had them changed before trips and changed back upon return. Not only were the tires costly, but the additional rental days to install the 10-ply tires and remove them added to the cost. These high costs put the future of our Geological Field Station programs in danger.
Q: How was outsourcing working out for the rest of campus?
A: During the second year, the rental agency closed the campus branch and forced all renters to their two locations off campus. Many of the commitments made at the beginning were now rescinded. Now they were enforcing a minimum driver age, vehicles couldn’t be taken off-road, rates were raised again, campus users were now in full complaint mode. Letters were sent to the campus vice president office reminding them of the great service and best pricing they had received when the service was in-house. The Geology Department decided they could no longer operate the Field Station without suitable vehicles and began exploring the possibility of bringing the motor pool in-house once again to manage their vehicles.
As a result, the Bloomington Campus Motor Pool purchased the 21 vehicles needed for the Geological Field Station. We prepared the vehicles, had an excellent summer and saved thousands of dollars. As we began to lease additional vehicles for the daily rental pool, the private rental agency agreed to provide prime-time vehicles to the daily rental pool. We were in business again thanks to the unique needs of the Geology Department. Using the Agile Fleet FleetCommander system, we leased 64 vehicles. We were selling as many rental days as we were before outsourcing the pool, reduced costs significantly, and our customer service was restored.
Part 2 of our Interview, "Customer Service Tips for University Motor Pools," with Mike Hardesty, former Motor Pool Manager for Indiana University, is now available here.