With each day more present tendencies in business systems to focus on core processes, the position of the transport activity and the vehicle fl eet within is imperatively examined: is it an activity creating an added value to the core system or a mere unavoidable cost-maker. A decisive role is attributed to the manner of defi ning the vehicle utilisation and the way of realisation of fl eet related activities. Therefore, a link between activity based costing and the transport department (subsystem) has been presented in this paper. This link is especially important in public utility fl eets. The legislation adopted in this respect announces changes in the corporate environment and conditions of public utility companies. As large fl eets represent an integral part of the public utility systems, new conditions will cause a need for fl eet cost allocation improvement, and therefore activity based costing. Will this engender the need for the creation of city fl eets?