Car hire

Car clubs, shar­ing pools and even the prospect of self­driv­ing ve­hi­cles could trans­form the way the car rental sec­tor op­er­ates, writes Rob Gill

The Business Travel Magazine - - Contents -

Tech­nol­ogy is help­ing to shape all el­e­ments of busi­ness travel but it may be that car rental is the sec­tor that will see the big­gest changes of all over the next few years.

While tra­di­tional car rental still makes up the bulk of sales for the sec­tor’s big names – Avis, Hertz, En­ter­prise, Sixt and Europ­car among them – they are all hav­ing to di­ver­sify the ser­vices they of­fer to cor­po­rate trav­ellers to com­bat the emer­gence of new play­ers within the wider ground trans­port in­dus­try.

This in­cludes of­fer­ing ad­di­tional op­tions such as car clubs – Avis Bud­get Group has owned Zip­car for five years, for ex­am­ple – and car-shar­ing pools. Europ­car pur­chased a mi­nor­ity stake in peer-to-peer car-shar­ing spe­cial­ist Snap­p­car in 2017.

Car hire firms have also moved into other ar­eas such as pro­fes­sional driver ser­vices: Hertz launched a ser­vice with trans­fer spe­cial­ist Black­lane last year while Sixt of­fers its own my­driver chauf­feur prod­uct. The lines be­tween ground trans­port sup­pli­ers are be­com­ing in­creas­ingly blurred.

Iain Collinson, prod­uct man­ager at FCM Travel Solutions, says: “Car rental com­pa­nies are re­think­ing their of­fer­ing, in­creas­ing flex­i­bil­ity and look­ing to re­tain busi­ness that might oth­er­wise have been lost, or to ac­quire new cus­tomers.

“An ex­am­ple would be Zip­car that of­fers rentals from £0.29 a minute. As more op­tions are pro­vided by sup­pli­ers, we’re see­ing more ques­tions be­ing raised by our clients. But many of these op­tions are yet to be used as much as they are dis­cussed.”

A key strat­egy for car hire firms has been to of­fer cor­po­rate cus­tomers a more flex­i­ble and di­verse range of ground trans­port op­tions – par­tic­u­larly to at­tract younger 'mil­len­nial' trav­ellers who are ac­cus­tomed to us­ing ride-hail­ing ser­vices such as Uber or My­taxi.

Mia Ehrn­rooth, man­ager of Global Busi­ness Con­sult­ing, which is part of Amer­i­can Ex­press Global Busi­ness Travel, says: “To­day’s trav­ellers are in­creas­ingly pre­oc­cu­pied with how to in­te­grate busi­ness travel into their busy lives, giv­ing rise to de­mand for flex­i­ble rental op­tions.

“Evolv­ing ride-shar­ing ser­vices re­main a key ground trans­porta­tion trend and will con­tinue to in­flu­ence the car rental market.”

The rental firms have clearly been lis­ten­ing to this mes­sage and are aware of the threats and op­por­tu­ni­ties af­fect­ing their fu­ture prospects, even if the adop­tion of some of their new prod­ucts can ini­tially be slow.

Clive Forsythe, Cor­po­rate Sales Direc­tor for Europ­car UK Group, says: “We recog­nise the im­por­tance of flex­i­bil­ity and choice when sup­port­ing busi­ness trav­ellers in cre­at­ing and im­ple­ment­ing the most ef­fec­tive travel plans for em­ployee journeys, tak­ing into ac­count cost, safety and en­vi­ron­men­tal ob­jec­tives.

“We of­fer a holis­tic ap­proach that en­com­passes car use by the hour, chauf­feur-drive and even the in­te­gra­tion of pub­lic trans­port as part of the jour­ney.”

As well as car clubs and car-shar­ing, rental firms are also of­fer­ing more en­vi­ron­men­tally friendly ve­hi­cle op­tions such as elec­tric cars and hy­brid tech­nol­ogy which help to re­duce emis­sions. Some new prod­ucts also fo­cus on re­duc­ing un­nec­es­sary journeys for busi­ness trav­ellers such as a 'pick-up' ser­vice be­ing of­fered by sis­ter brands En­ter­prise and Na­tional.

“It elim­i­nates the need for ex­tra park­ing at cus­tomer premises, saves on CO2 as only one car is used and is of­ten vi­tal for last­minute rentals,” ex­plains Rob In­gram, Direc­tor of Busi­ness Devel­op­ment EMEA at En­ter­prise and Na­tional Car Rental.

“More fleets are turn­ing to pick-up over de­liv­ery and col­lec­tion as well as the adop­tion of En­ter­prise Car Club. These ve­hi­cles of­fer in­stant ac­cess, re­duce the need for tra­di­tional pool fleets and fa­cil­i­tate the in­tro­duc­tion of elec­tric and hy­brid ve­hi­cle op­tions into a com­pany’s mo­bil­ity mix and travel pol­icy.”

One area that may be hold­ing up the wider use of elec­tric cars by busi­ness trav­ellers around the UK is the lack of suit­able charg­ing points and fears about how far these ve­hi­cles can travel be­fore los­ing power.

Nina Bell, Manag­ing Direc­tor of North­ern Re­gion at Avis Bud­get Group, says: “At present, the UK’S charg­ing in­fra­struc­ture is patchy and the dis­tances elec­tric ve­hi­cles can travel are rel­a­tively un­known, which makes each car less de­sir­able.

She con­tin­ues: “But as charg­ing in­fra­struc­ture be­comes more read­ily avail­able, we ex­pect driv­ers to be­come in­creas­ingly open to rent­ing elec­tric ve­hi­cles.”

Self-driv­ing fu­ture Look­ing fur­ther ahead, there is also the tan­ta­lis­ing prospect of how au­ton­o­mous or self-driv­ing cars will have the po­ten­tial to rev­o­lu­tionise the cor­po­rate car hire sec­tor.

For ex­am­ple, Waymo, which is Google par­ent com­pany Al­pa­bet’s self-driv­ing ve­hi­cle project, is cur­rently part­ner­ing with Avis on the pi­lot of a ride-hail­ing ser­vice in Ari­zona. Uber and Lyft are also work­ing on au­ton­o­mous ve­hi­cle projects.

It may still be way too early to as­sess the long-term im­pli­ca­tions of driver­less ve­hi­cles, but most car rental firms think they have

As charg­ing in­fra­struc­ture for elec­tric cars be­comes more read­ily avail­able, we ex­pect driv­ers to be­come in­creas­ingly open to rent­ing elec­tric ve­hi­cles”

a big part to play in fu­ture de­vel­op­ments.  Rob In­gram, from En­ter­prise and Na­tional Car Rental, adds: “Many driv­ers ex­pe­ri­ence new au­to­mo­tive tech­nolo­gies for the first time in rental ve­hi­cles.

“The car rental in­dus­try will no doubt be an early adopter and will be able to help in­tro­duce au­ton­o­mous driv­ing tech­nol­ogy to mil­lions of con­sumers, just as we’ve done with anti-lock brak­ing, stop-start tech­nol­ogy, hy­brid elec­tric ve­hi­cles and other new tech­nolo­gies,” he points out.

Har­ness­ing tech­nol­ogy With driver­less cars not likely to be­come a prac­ti­cal op­tion for busi­ness trav­ellers to use for sev­eral years (if not longer), car rental firms are cur­rently con­cen­trat­ing on more pro­saic tech­no­log­i­cal ad­vance­ments such as im­proved book­ing and mo­bile sys­tems, new part­ner­ships with other trans­port providers and adding tools that pro­vide en­hanced data to cor­po­rate clients.

Sup­ply­ing clients with key in­for­ma­tion around their em­ploy­ees’ ve­hi­cle use and the emis­sions pro­duced is an im­por­tant el­e­ment of car rental com­pa­nies’ ser­vices.

Europ­car’s Clive Forsythe says: “We were the first com­pany to in­tro­duce car­bon emis­sion and per­for­mance data by car group, al­low­ing cus­tomers to make in­formed choices when se­lect­ing their ve­hi­cle. Europ­car UK has pub­licly stated a com­mit­ment to mov­ing its fleet to five per cent elec­tric ve­hi­cles by 2020.”

There is also an in­creas­ing aware­ness of duty of care con­cerns by car rental firms – some­thing they are tack­ling by in­tro­duc­ing new tech­nol­ogy that can mea­sure risk fac­tors such as fleet age, main­te­nance stan­dards and the mileage driven, as well as track­ing sys­tems.

This data will only be­come richer over the next few years, says Hertz’s Richard Bowden, and even in­clude in­for­ma­tion on driver fa­tigue lev­els and de­tailed be­hav­iour.

“This will help cor­po­rate cus­tomers cre­ate per­son­alised and smart poli­cies but also dra­mat­i­cally in­crease driver safety.” he says.

With so much fo­cus on the fu­ture and the on­set of ma­jor tech­no­log­i­cal ad­vances, it can be easy to for­get about a more press­ing ques­tion that’s nearly al­ways on a travel buyer’s lips: how much is car rental ac­tu­ally go­ing to cost this year?

Carl­son Wagonlit Travel and the GBTA (Global Busi­ness Travel As­so­ci­a­tion) Foun­da­tion have pre­dicted a “slight price hike” in av­er­age global car hire rates in 2018 as de­mand im­proves and rental com­pa­nies “shift from a sim­ple market-share fo­cus to­ward prof­itabil­ity goals”.

CWT sug­gests that buy­ers can mit­i­gate these ex­pected price in­creases by in­creas­ing lever­age with car hire sup­pli­ers by “know­ing your cur­rent global pat­terns, how costs are distributed and the global market place, in­clud­ing in­for­ma­tion about strong re­gional sup­pli­ers”.

The car hire sec­tor may be on the precipice of a fun­da­men­tal tech­nol­o­gy­driven change in the way it op­er­ates but, just like ev­ery other as­pect of busi­ness travel, prices will con­tinue to be a key fo­cus for buy­ers, par­tic­u­larly with more po­ten­tial com­pe­ti­tion shak­ing up the ground trans­port sec­tor.

The data sup­plied by car rental firms will be­come even richer, mov­ing from track­ing sys­tems to even in­clude in­for­ma­tion such as driver fa­tigue lev­els and de­tails on driver be­hav­iour”

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