An optimum approach to daily rental

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For companies requiring daily rental services across different countries and regions, the best options are sole and primary suppliers. Curtis Hutchinson asks the leading providers to state their cases.

Avis Budget Group advocates the sole supplier route for businesses with offices around the world or with staff requiring short-term vehicles when overseasIt’s a familiar scenario. Some employees need to travel on business around the world and require transport when they arrive at their destination. For trips involving busy itineraries with travel to multiple locations and requiring maximum flexibility, then access to a car is the only option.

The solution is daily rental, an established means of providing short- and medium-term mobility solutions to business travellers. But how should businesses manage their overseas daily rental usage?

In many cases the onus will be on the employee to source a car at the airport, or their hotel, go for the cheapest deal and claim back on expenses. This could result in employees running around in high mileage hire cars, sourced from an unknown local supplier, which may have been heavily used by holidaymakers over a long and busy season. Whether that car will comply with the business’ duty of care policy, be fit for purpose and project the right corporate image is debatable.

With this in mind International Fleet World approached three of the biggest providers of daily rental to see what they offer corporate customers.

 

The sole supplier route

James Turner, sales director, of Avis Budget Group, advocates the sole supplier route for businesses with offices around the world or with staff requiring short term vehicles when overseas. “There are a number of advantages to having a sole supplier daily rental agreement in place for companies which have offices and staff based across different regions,” he says.

“At Avis Car Rental we operate one of the world’s best-known car rental brands with a global spread of approximately 5,500 locations in 165 countries. This, along with over 70 years of experience working in the industry, enables us to offer a consistent customer experience.

“Additionally, moving to a centralised vehicle rental policy provides efficiency, transparency and flexibility,” adds Turner. “Businesses deal with one local Avis account manager in their country and all the bookings go through a central point with the account manager overseeing the agreement. This ensures the company’s bookers and travellers are familiar with our processes and the way we operate.”

There are also quantifiable cost efficiencies of going down this route, argues the Avis man. “Pooling all global volume to a single supplier also means there are fixed and competitive rates throughout the year, as well as simple pricing and clear terms and conditions, allowing companies to control their vehicle rental costs and policy management more effectively.

“Furthermore, those drivers that hire frequently can join our free Avis Preferred loyalty programme which provides fast-track counter service and member-only rewards,” he says.

The sole supplier route is also advocated by Caroline Parot, chief executive officer of Europcar Mobility Group. “Clearly a sole supplier agreement should deliver cost and operational efficiencies for a business. And where a firm has employees in multiple countries, it should also deliver consistent standards in terms of the driver experience,” she says.

Parot adds that a co-ordinated sole supplier policy helps organisations better understand and manage their mobility needs. “Working with a single rental partner should also mean a business can use one booking and management system, which ideally should provide access to all the different services available from the supplier. This should not only make it easier to apply travel policies across an organisation, it should also mean that real insight can be provided into how mobility services are being used within an organisation to improve efficiencies and reduce costs.

“Crucially, fleet managers and their employers need to be able to understand and analyse how the use of different mobility solutions is impacting financial and environmental targets,” states Parot. “Working with one supplier means they can gain that insight much more easily than if they were working with multiple suppliers.”

 

The primary supplier option

However, according to Rob Ingram, director of business development EMEA at Enterprise Rent-A-Car/National Car Rental, there is also a counter argument for a two-tier approach to daily rental services, with a primary supplier working, when necessary, with third parties to provide daily rental solutions. “The question is whether a sole supplier agreement is realistic for global daily rental, as there are very few circumstances where a sole supplier contract captures all of a business’s rental requirements,” he says.

“It’s more realistic to approach daily rental looking for a ‘primary provider’ first and potentially secondary providers as well,” adds Ingram. “This is why so many organisations appoint a primary supplier as their main partner, supported by secondary rental companies in markets where needed.

“This can be more effective than using a range of different suppliers in different countries, as it allows businesses to develop one tailored, strategic partnership with their primary partner with a set of service indicators and requirements. The partner is then also responsible for ensuring the quality and service delivered by its third parties. Plus, all employees get one service standard and the business can work with the rental company to create a bespoke business travel programme.

Ingram argues such an approach offers flexibility whilst also maintaining standards. “There is much more scope for advising, consulting and adding value where there is one primary supplier engaging with a complete requirement rather than just being one component, so a rental company becomes a business partner rather than just a supplier. For example, we can work more effectively with senior decision-makers to help create a travel policy that reduces costs and keeps employees mobile and we can suggest a wider range of options.”

Clearly there are two distinct daily rental options to be considered for businesses with staff requiring access to cars whilst abroad. While companies can assess the pros and cons of the sole supplier and primary supplier routes, both offer centralised control, budgeting accountability and consistency from the main suppliers. That’s got to be better than a member of staff queuing in line behind holidaymakers for the best deal from an unknown local provider.

 

Trends in daily rental vehicle choices

We asked Enterprise Rent-A-Car/National Car Rental, Europcar and Avis Budget to identify any trends they have noticed over the last 18 months when it comes to businesses specifying the types of cars that staff use for their international travel.

Rob Ingram, director of business development EMEA at Enterprise Rent-A-Car/National Car Rental:

“Hybrid vehicles are becoming a rental workhorse and have become increasingly common in rental fleets. Plug-in hybrids and pure electric vehicles are a growing market that remains more context-specific, say, for car clubs where a number of employees always make lots of short trips, due to range and infrastructure considerations.”

 

James Turner, sales director of Avis Budget Group.

“We plan to have more than 100,000 connected cars by early this year. Our entire fleet in the greater Kansas City area is connected as part of our first-ever Mobility Lab. We have also committed to operating a fully connected global fleet by 2020.”

 

Caroline Parot, chief executive officer of Europcar Mobility Group

“We continue to focus on the delivery of environmentally sustainable mobility solutions, both through the use of hybrid, electric and even hydrogen fuelled vehicles on our fleets and through the delivery of car share solutions, working in partnership with employers and public sector organisations.”

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