Interview: Donlen VP John Korte on the mobility revolution

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While mobility as a service – known in the fleet world as “MaaS” – is gaining traction among fleets in Europe, there isn’t as much activity to report. Mark Boada spoke to John Korte, vice president of Donlen’s mobility business development team, to find out what his company is doing about it.

John Korte, VP of Donlen

John Korte, VP of Donlen

What kinds of products and services is Donlen offering to providers of mobility as a service that could also be used by traditional fleets?

At Donlen, over the last 12 to 18 months we’ve come up with several new products and services that are being used by ride-hailing and ride-sharing companies, three of which we could ultimately offer to our traditional corporate fleet clients.

One is mobile maintenance. In pooled fleets that don’t assign vehicles for exclusive use by a driver, there isn’t a driver who can to take the vehicle to a traditional location for service. In those cases, there’s an opportunity for us to send a service technician to the vehicle.

Mobile fuelling is another opportunity that we’ve developed for the shared mobility space. Today, we can send a truck to multiple locations throughout a city and fill the tanks of fleet vehicles, even with unleaded gasoline, something that has not always been the case.

Finally, we offer a mobile solution for light reconditioning, car washing, and detailing. We’ve got vendors we partner with today in that space that can do a waterless wash on site, detailing, even light body work, to make sure that that car is ready and fully cleaned before the next share or rental happens.

 

Which mobility providers are your  customers for these services?

We provide one of the largest ride-hailing companies and a couple of larger car-share companies preventative maintenance and accident management services.

How do you see fleets being impacted by the shift away from traditional fleet management toward mobility management? What can fleet managers do to prepare for that?

Donlen sees that transformation already starting. For it to come to fruition, though, fleet managers of traditional corporate fleets really need to be out front and be leaders in each of their individual companies, to help them understand what a mobility solution could look like so it can be incorporated and shared into their current fleet structure.

More often than not, there’s not going to be a complete elimination of the traditional fleet program. What you’re going to see is that shared mobility is going to augment the fleet program, where a fleet will be hybrid of the two. You already have businesses that manage both a traditional fleet operation and a reimbursement program. We believe a managed mobility budget program could be a third pillar of their operation.

What this means for today’s fleet manager is that they’ve got to work cross-functionally with human resources, with the finance team, the safety and risk team, and the legal department to understand how would this change work for them. A mobility program could mean incorporating the use of a ride-hailing company, a car-sharing company, public transportation, peer-to-peer car sharing, or just any of the multitude of options that are out there. Some fleets might have a stand-alone program in which one subset of employees get a company vehicle, another subset is on reimbursement, and then another subset that prefers a mobility budget to be able to move from Point A to Point B in their job.

 

Is Donlen ready to provide that kind of service for traditional fleet, or is that in the future?

At Donlen, we’re developing that product. But while we really feel like that’s where the industry is going, it’s going to take a while before they’re going to be ready to use the services of a full mobility integrator.

 

Is Donlen is well-positioned to play that role?

Yes – at Donlen, we believe we’ve got an advantage. Being part of the Hertz family we’ve got mobility options above and beyond just the traditional fleet management company. With Hertz, we feel we can leverage many of the things that they offer into the fleet marketplace to really be that full-service mobility provider, whether you need a vehicle for one hour, one day, or a year or five years.

Since Donlen operates overseas, would you compare how far along Europe is in developing a mobility solution as opposed to the United States and Canada?

When you compare fleet operations in Europe and North America, there are differences in both the way fleet operations are handled and in the demographic environment in which fleets operated that have allowed Europe to be further ahead from a mobility solutions standpoint for fleet managers.

One is the way leases are treated and structured in Europe versus the US. In Europe, they rely more on a traditional closed end lease structure, where the leasing company has residual value risk. Another difference is that in Europe a fleet vehicle is treated as part of the driver’s compensation. But in the U.S. and Canada, the open-end TRAC lease is predominant, so the fleet enjoys the benefit of potentially higher residual value and the vehicle generally isn’t treated as a form of the driver’s compensation.  It’s either a service vehicle or it’s a means for that sales person to do their job and get from Point A to Point B.

Mobility solutions are also more readily adaptable to the geography and the urbanisation of Europe, where most people live in the large cities with robust public transport options. The factors have led to more of an early adoption of mobility as a service, shared mobility, and made it much more popular. We are catching up in the US as our urban population is growing and cities are taking a more proactive approach by increasing public transportation options and driving shared mobility solutions to decrease the number of single occupancy vehicles in cities. So in the coming years the solutions in the US will be catching up to the rest of the world and we need to be prepared for a successful in launch of mobility as a service as a part of fleet management.

 

So, overseas, does Donlen already offer mobility services that you will eventually bring to North America?

Yes. In Europe today, we partner with Athlon [a vehicle leasing and fleet management company based in the Netherlands] that offers many of those mobility solutions as a mobility integrator. It enables Donlen’s customers in Europe to manage not only traditional fleet programs, but also to layer in some of the other mobility solutions. So, our partnership with Athlon enables us to make sure that we have a mobility solution in North America that will produce the same result.

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