Work Truck Logo
MenuMENU
SearchSEARCH

What To Do When Flat-Rate Mileage Fails Your Most Productive Fleet Drivers

Flat-rate mileage is failing drivers. Learn why real costs vary, how inequities grow, and what fleets can do to build fair, data-driven reimbursement programs.

November 25, 2025
Graphic showing a speedometer background with bold text reading “Are You Failing Your Drivers?” suggesting unfair mileage reimbursement practices.

Flat-rate mileage might feel simple, but for many drivers it’s anything but fair. Costs vary by region and the gap is growing.

Photo: Work Truck

5 min to read


If your team spends their days behind the wheel, whether visiting job sites, making sales calls, or supporting customers in the field, what you pay them to drive really matters. And as fuel prices bounce around and operating costs swing wildly from one region to the next, more companies are discovering that a flat-rate mileage reimbursement is doing the opposite of what it was meant to do. 

Ad Loading...

Instead of fairness and simplicity, it might be creating some very real inequities baked right into the system.

Ad Loading...

That’s something Ryon Packer, Chief Product Officer at Motus, sees every day. Motus powers vehicle reimbursement programs for thousands of household-name brands and has a front-row seat to what’s happening out on the road. 

Spoiler alert: it’s not great for drivers in expensive markets, nor for employers trying to control costs. Let’s dig into what’s happening, why it matters, and how data is finally catching up with the real world.

Flat-Rate Reimbursement Isn’t Going Away… Yet

You’d think with fuel prices swinging 30%, 40%, even 50% in some regions, flat-rate mileage would be fading out. But it’s still everywhere.

“Flat-rate mileage allowances are still surprisingly common,” Packer explained. “Many companies stick with them because they’re simple and familiar. The problem is that they ignore real-world cost differences across regions, from fuel prices to insurance to maintenance.”

The result is what you’d expect. “The program is either too generous in some places or not nearly enough in others, which creates inequities and unnecessary spend.”

Ad Loading...

So, while it feels simple, it’s not fair. And drivers can feel that.

The Gap Between High-Cost and Low-Cost Markets

Here’s where things get bumpy. When two employees receive the same reimbursement but face totally different costs to operate a vehicle, someone is losing. Usually, it’s the person who is working the hardest.

“In high-cost regions, drivers can be hundreds of dollars underwater each month compared to peers in lower-cost markets,” Packer said. “Think about a sales rep in California who is paying five dollars or more per gallon of gas versus a peer in Texas or the Midwest. With a flat rate, one is subsidizing the other.”

That adds up month after month, and it doesn’t go unnoticed.

This Isn’t Just a Sales Problem

Maybe you’re thinking this is a niche challenge, limited to road warriors or heavy-duty mileage jobs. Not so.

Ad Loading...

“This issue is really industry agnostic,” Packer noted. “Any company that relies on its team to visit customers and job sites regularly and has people in different geographies faces the issue.”

Fuel and insurance alone make up about half the cost of owning and operating a vehicle. When those costs double in one state compared to its neighbor, even nearby teams can experience very different realities.

Person in a suit holding a paper with a sad face over their own face, standing in front of a backdrop of hundred-dollar bills, symbolizing financial strain.

When reimbursements fall short of real costs, drivers feel it first. And yes, it shows in morale.

Photo: Work Truck

Why Fleet Driver Morale Takes a Hit

Drivers are smart. They know when a system feels stacked against them. And, in today’s labor market, fairness carries real weight.

“Employees know when they’re being treated unfairly,” Packer said. “If you’re driving thousands of miles in a high-cost region but receiving the same rate as someone in a cheaper market, then it doesn’t feel equitable.”

Packer warns that this leads to “frustration, lower engagement, and ultimately turnover.” And if there’s one thing every fleet leader wants to avoid, it’s losing their most productive people because of a reimbursement policy that hasn’t been updated in a decade.

Ad Loading...

Why Company Cars Don’t Solve the Problem

When someone raises the issue of fairness, the company car conversation usually isn’t far behind. But that’s not the magic fix some hope it will be.

“To make a company car program affordable and sustainable, the company makes all the decisions about the car,” Packer said. “These choices don’t work for many employees.”

And the stories? They’re real. “I’ve heard stories including how tall someone is, how big their family is, a desire or need for certain options, their hobbies, or their pets that make the company choice in the car the wrong choice for them.”

There's also the practicality factor. Many employees don’t want two vehicles in their lives, one for work and one for everything else.

And importantly, this isn’t just about the employee. “The IRS has defined multiple solutions that give companies options about how to provide their employees with a fair reimbursement for the type of car, down to options and insurance coverages, that the role requires,” Packer explained.

Ad Loading...

That means employers still get control over program cost and risk. 

“With the right solution provider, reimbursement programs give employers equivalent levels of risk mitigation without the burden of being accountable for the vehicle 24/7," he said. "With most accidents, especially high-claim injury accidents, happening on evenings and weekends, this can make a big difference to a company’s bottom line.”

Data Is Finally Making Reimbursement Fair

Good news: technology can fix this. Location-based cost data, automated mileage capture, and program analytics are changing the entire reimbursement conversation.

“Data is the difference-maker,” Packer emphasized. “With accurate mileage capture and cost indexing by geography, companies can ensure that reimbursements reflect real costs. This means that employees are fairly compensated, and employers aren’t overpaying.”

Software solutions like Motus can also keep the program compliant and consistent behind the scenes. “Modern, data-driven solutions can automate compliance, risk checks, and reporting, so the program is both equitable and efficient.”

Ad Loading...

So, What’s Next for Fleets?

Is the flat-rate program disappearing? It’s heading that way.

“All three factors are pushing the shift,” Packer said. Employee expectations, regulatory oversight, and budget pressures are converging. “Flat-rate reimbursement is misaligned with all three of those realities. The shift toward more accurate, data-driven programs isn’t just likely; it’s inevitable.”

That means fleet managers, HR teams, and operations leaders may need to look at their current programs with fresh eyes. Because when someone’s job literally depends on driving, fair compensation isn’t a perk. It’s the foundation of a strong workplace.

And the companies that fix this now won’t just save money. They’ll keep the best drivers behind the wheel and build a culture that feels fair, modern, and ready for whatever comes next.

Prefer to watch? Check out the interview with Packer below! 

Subscribe to Our Newsletter

More Operations

Work Truck graphic calling for industry insights on 2026 trends and 2027 forecasts.
Operations•by Lauren Fletcher•October 29, 2026

Work Truck Seeks Fleet and Industry Insights on 2026 Trends and 2027 Forecasts

Work Truck is seeking insights from fleet leaders and industry partners on the trends that shaped 2026 and what commercial fleets should prepare for in 2027. Participate today!

Read More →
Bob Adamsky, director of fleet management at Arrow International, speaks into a microphone during a panel discussion at Work Truck Exchange, alongside fellow fleet industry professionals.
Operations•by Lauren Fletcher•October 29, 2026

30 Years in Fleet and Still Learning: Lessons Beyond Trucks

After more than three decades in fleet, Bob Adamsky has learned that knowing trucks is only part of the job. The bigger lessons come down to communication, understanding, and never assuming you know it all.

Read More →
Black-and-white portrait of Carolyn Edwards on a Legends of Fleet video thumbnail, presented by Work Truck and sponsored by Legend.
Sponsored•by Lauren Fletcher•October 29, 2026

What Every New Fleet Manager Should Know

Carolyn Edwards shares lessons on finding mentors, showing fleet’s value, and leading teams in this episode of Legends of Fleet.

Read More →
Ad Loading...
Flowers, balloons, stuffed animals, and glowing candles surround the Silver Rail Elementary School sign at a memorial in Bend, Oregon.
Operations•by Staff and News Reports•October 27, 2026

Les Schwab Tires Launches Foundation With $100,000 for Community Recovery

Les Schwab Tires launches a foundation with $100,000 to support recovery for Silver Rail Elementary and the Bend community following a school shooting.

Read More →
Side-by-side photos show pumpkin seeds being scooped out with a wooden spoon and a person carving a jack-o’-lantern with triangular eyes and a jagged smile.
Operations•by Lauren Fletcher•October 26, 2026

Bring Some Fleet to Your Halloween with Our Pumpkin Carving Templates

Download Work Truck’s truck-themed pumpkin patterns, explore more automotive designs, and give your shop or front porch a seasonal upgrade.

Read More →
Work Truck Trucks, Tips & Tours YouTube thumbnail featuring a WEX representative discussing the future of fleet fuel payments, with a WEX-branded backdrop, bold yellow and white headline, and Truck Chat Watch Now button.
Operations•by Wayne Parham•October 23, 2026

How Cardless Fuel Payments Benefit Commercial Fleets

Is it time for fleets to move beyond plastic fuel cards? David Abraham of WEX explains how cardless fuel payments can help reduce fraud, simplify driver transactions, and improve efficiency by allowing drivers to pay for fuel using their smartphones.

Read More →
Ad Loading...
Three overlapping sticky notes in Work Truck brand colors reading “Listen,” “Think,” and “Speak” sit on a worn automotive workbench surrounded by tools and hardware.
Operations•by Lauren Fletcher•October 23, 2026

Good Fleet Leadership Starts With the People You Already Have

From developing future leaders to listening to employees, discover how better leadership can help work truck fleets retain talent and build stronger teams.

Read More →
Work Truck leadership update graphic featuring Page Siplon, president and CEO of the American Transportation Research Institute (ATRI), with his portrait against a blue gradient background and the Work Truck logo.
Operations•by News/Media Release•October 21, 2026

ATRI Names Next President and CEO

Page Siplon, a longtime transportation and logistics industry executive, has been chosen as the next president and CEO of the American Transportation Research Institute (ATRI).

Read More →
Promotional graphic for Coltrain Onsite Fleet Care's sponsorship of the 2026 StaffDNA Cure Bowl, featuring two branded Ford service trucks, the Cure Bowl logo, and the message "Defend the Road. Defend the Cure" against a black, yellow, and pink background.
Operations•by Staff and News Reports•October 20, 2026

Coltrain Onsite Fleet Care Sponsors 2026 Cure Bowl to Support Cancer Research

The mobile fleet maintenance provider is supporting the annual college football bowl game, which has helped raise $6.83 million for cancer research since 2015.

Read More →
Ad Loading...
alt image text for accessibility Work Truck Weekly Cheat Sheet thumbnail featuring Lauren Fletcher, race car driver Isaac Johnson, a blue Republic Services electric refuse truck, and a Ghostbusters-themed Rivian SUV. Text highlights racing lessons, EV fleet growth, and Ghostbusters fun.
Operations•by Lauren Fletcher•October 19, 2026

Racing Lessons, Electric Fleet Growth, and Ghostbusters Lead This Week's Work Truck News

Racing lessons for fleets, Republic Services' electric truck expansion, 40 years of fleet wisdom, truck trivia, autonomous yard trucks, and more headline this week's Truck Chat Cheat Sheet.

Read More →