The rise of car clubs is changing the way buyers look at the evolving rental market
IN THE PAST FEW YEARS LARGE CAR RENTAL FIRMS have introduced buyers to their shiny new ‘car club’ products. Names such as Zipcar and BlaBlaCars are established in the corporate sector and are helping to cut carbon, costs and administration issues.
Car clubs range from collaborative ‘sharing economy’ schemes to commercial solutions offered by the big rental firms. So how do they help corporate travel buyers?
The thorn in the side of the buyer is ‘grey’ fleet – employees who use their own vehicle for company business may have the convenience of falling out of bed and into their car, but the employer is still responsible for what happens to them in that vehicle, and the figures are not encouraging.
Research by Enterprise found that 17 per cent of grey fleet drivers get their vehicle checked only at its annual MOT or service, and 10 per cent say they have had a road accident that was either ‘probably’ or ‘definitely’ caused by a lack of proper vehicle maintenance. In addition, 41 per cent of grey fleet drivers are using a car that is more than six years old and 18 per cent are using one more than a decade old.
This could be seen as a reason car clubs are playing an increasing role in corporate life, bringing with them safety, convenience and control. And the cars concerned can be kept on company premises and in smaller numbers than the grey fleet they are replacing.
“For many of our customers, the car club is an integral part of business mobility,” says Enterprise director Adrian Bewley. “The cars enable organisations to cut costs and reduce admin, but it is really about delivering true mobility on demand so that workers can do their jobs.” Car clubs also often lead to lower business miles than grey fleet expense claims, possibly because people only use them for a specific – and necessary – purpose.
A FLEXIBLE APPROACH
The service options include fee per use, a monthly fee for unlimited access to a pool of cars on office premises and a hybrid arrangement, where the company’s pool cars are run with Enterprise Car Club technology.
Rival car rental firm Europcar recognises the need to take a more flexible approach to car rental, embracing car use by the hour, ride-hailing, chauffeur-drive and even the integration of public transport. As a result, in 2015 it invested in Ubeeqo, which provides a single booking platform for taxi, car club and car rental. This ties in with the acquisition in the same year of E-Car Club, which provides hourly electric car hire. Europcar has also taken a share in Wanderio, which calculates the best transport solution for each journey, based on price and length of trip, with links to more than 700 airports and 4,000 rail and bus stations.
“We can offer dedicated car-sharing vehicles in an organisation’s car park for use by authorised drivers, which means a customer’s fleet size can be reduced by sharing vehicles rather than owning or renting them,” says Clive Forsythe, corporate sales director for Europcar Group UK. “This can also include regular servicing, maintenance and cleaning, enabling businesses to endorse sustainable mobility solutions and minimise budgets spent on taxis and mileage allowances.”
One of the main challenges of implementing car clubs into corporate travel programmes is changing traditional views on car rental. “The success of a car club depends on employees’ involvement and commitment, as well as support from the top,” says Richard Bowden, VP of commercial sales at Hertz. He suggests promoting the idea by launching it with a pilot scheme, perhaps just one car.
In addition, linking HR issues with car clubs can also work well, says consultant Chris Pouney. “For example, companies hate a lack of car parking spaces, so giving access to people prepared to embrace car sharing can be a good way to ensure success in this area. It presents an opportunity to adopt more modern forms of fleet.”
Car clubs can be run alongside daily hire, providing management information (MI) that is essential for companies to work out what they need and when. For longer trips, daily rental may be a better option. Car clubs work for shorter journeys – between offices or regular trips to the same locations. This is particularly useful in the public sector, where they are under pressure to reduce costs and emissions, and where grey fleet was the primary option in the past.
Engineering company Cullum Detuners encourages employees to share cars: “We do try and get people to go with a member of staff who has a company car, where possible, and to share cars to airports,” says Cherry Salvesen, PA to the directors. “We are also happy for employees to use someone else’s company car and people seem quite happy with that. It adds to their business mileage, so there are tax advantages.”
TOOLS OF THE TRADE
Technology plays a major part in convenience for travellers. Enterprise drivers can book club cars online, unlock them with a secure key card or app and access the keys with a PIN. Hertz users enter a code into the on-car pinpad, or swipe a Smart Key over the reader.
For further MI, onboard electronics in Europcar vehicles provide real-time data on pool use, potentially leading to reduced fuel consumption and maintenance management. And the Ubeeqo app includes motivational methods for employees, such as gamification to encourage more eco-friendly driving and better road safety. Enterprise and National’s apps allow users to view or modify reservations, directions to a branch, call roadside assistance or book a car.
Enterprise’s B2B tool gives online booking, management reporting and customisable authorisation tools. Similarly, Europcar.biz allows travel managers to ensure vehicle use is matched to travel policy: the system will ensure that drivers can’t book larger vehicles without authorisation, and numerous bookers can manage live reservations on behalf of drivers.
Picking up and returning cars can still be a huge undertaking, requiring endless queues and paperwork, but suppliers are working at relieving the tedium. Europcar rental staff can see bookings on corporate accounts, so there’s no need to discuss upgrades and ancillaries, saving customers’ time.
Cullum Detuners uses Avis, which offers paperless pick-up and apps, but the company does not use them. “We have an electronic voucher for drivers to carry on their phone or in hard copy, and that works well,” says Salvesen. “But we have some issues in the US, where car rental companies like everything on paper.”
Insurance is an area for consideration – if a fleet policy covers rental vehicles, additional insurance may not be necessary and drivers should be advised of that. And car rental companies can monitor adherence to policy, such as size of car and where and when delivered. “Hertz is able to deploy dedicated booking microsites, which feature only car groups and products employees are allowed to book, based on their contract/company policy,” says Hertz’s Richard Bowden.
Cullum Detuners does not take a full insurance package because over time, that costs more than having to pay the excess if someone has an accident. Company policy allows single travellers to rent a compact car, medium-sized for more than one, and for several travellers, an SUV or larger vehicle, so that the group doesn’t need two cars. When travellers are together (usually no more than three people), Salvesen says: “We try to get them all assigned as drivers, so they can take it in turns on long journeys.”
Suppliers are also under some obligation to ensure that the final bill bears some resemblance to the original quote and embraces policy. “The customer’s travel policies and rules are always hardwired into the booking platform to ensure the business can more easily control aspects of vehicle rental that can otherwise seem to the employee to be discretionary,” says Enterprise’s Adrian Bewley.
Combine the increasingly broad brief of car rental companies with the ease with which their clients’ travel policy can be written into their systems, and the days of gratuitous upselling should soon be a thing of the past.
Car pool saved council £90,000
BY TAKING ON EIGHT HOURLY RENTAL, low-emission pool cars that are kept on the premises, Aylesbury Vale District Council (AVDC) saved £90,000 in the first year.
Enterprise Rent-A-Car, in conjunction with AVDC, reviewed employee mobility, analysing the council’s vehicle usage data. It then introduced the Enterprise Car Club cars for short journeys and daily hire vehicles for trips of more than 75 miles or eight hours. Together these have replaced the grey fleet and formed part of the council’s new travel policy.
This was changed to focus on safety, and council staff members still using their own vehicles for work first complete a form, ticking boxes against aspects such as safety, insurance, driving licence, health and fitness and vehicle condition. AVDC has also cut grey fleet mileage reimbursement from up to 65p per mile to 15p to encourage employees to use the Enterprise services.
The initiative has allowed AVDC to re-introduce a 50 per cent bus subsidy on all four locally operated bus routes. Overall, AVDC claims its transport carbon emissions have been reduced by half.
“Enterprise helped us analyse where, how often and why staff were travelling, which was vital if we wanted them to be more efficient,” says Alan Asbury, sustainability and energy manager at AVDC. “Our new policy was based on this understanding. Enterprise also helped us work with our employees so they understood the aims of the programme, and demonstrate what we were trying to achieve.”
Read top tips for corporate car rental