Is corporate car hire getting the hard shoulder?

Corporate car hire interview

When it comes to managing a corporate travel programme, it’s not just about flights and hotels. There’s ground transport to consider too; should you use chauffeur driven transfers or organise a hire car?

If you’ll be travelling to multiple towns and cities in one destination, then hiring a car is logical. You can ensure you make the right impression with clients, and there’s the added benefit of not having to spend time working out and filing petrol expenses.

But with many companies now shining a spotlight on carbon emissions and CSR targets, and road transport accounting for 20% of total global carbon emissions, is corporate car hire getting the hard shoulder? We spoke to Sez Beecher, Corporate Land Product Manager at FCM, to get her view on the future of corporate car hire.

Is corporate car hire getting the hard shoulder?

What trends are you seeing in the use of car hire by corporate clients, particularly in the UK and other major markets?

 

While car rental remains the largest mobility solution, we are seeing our clients begin to take advantage of the increase in alternative methods of transport. This is largely due to the recent focus in the ever-growing chauffeur transfers sector within the corporate travel industry as service levels, technology and integration begin to catch up with the current car rental offering.

This, coupled with the fact that many client travel policies are beginning to look deeper into traveller welfare, means that many corporate clients are considering it safer for their employees to use transfers over self-drive options, particularly after long-haul or overnight flights.

As a combatant for this, we are seeing the car hire companies really begin to step up to show their value in other areas. For example, Avis acquired Zipcar, which now means that travellers do not need to worry about dropping cars off or arranging someone to pick a car up on collection; they can simply drive it close to home and leave it there. These vehicles are revolutionary in the industry as they can be hired by the minute, hour or day, potentially saving thousands for businesses as flexible working becomes more popular.

Similarly, Sixt dived into the transfer market at the beginning of 2013, with their MyDriver transfer product. It offers both on-demand and advance transfer options, which is gaining more focus and traction within the company as transfers become more popular.

Value adds are another great trend within the car industry. More and more rental companies are joining forces with airline loyalty schemes to allow their clients to earn points in conjunction with other membership schemes they are already part of. Avis is one such supplier; it has been part of the coveted Oneworld alliance in partnership with British Airways for some time. Points can be earned on any of Avis’ products, including ZipCar.

Sixt are part of the Miles & More airline scheme which allows points to be earned on both transfer and rental products. And Hertz has recently become the first non-air affiliate to join the SkyTeam scheme.

Car hire at airport

Is the use of car hire falling with the growth of other types of ground transport – eg: car-sharing, car-pooling, ride-hailing etc?

I believe it’s natural to see this in the corporate sector, as previously mentioned. Companies are shifting their focus to employee welfare, while also looking at how to keep costs down.

However, if you look at the leisure sector, I would predict the complete reverse. While market share may be shifting, more people are travelling for business overall - so our segment of this market continues to grow healthily as car rental is the backbone of most corporate ground transport programmes. 

Are you introducing any new programmes or technology to help corporate travel buyers/SMEs to book, manage and analyse their car hire use?

FCM and our parent company Flight Centre Travel Group are consistently developing our technology offerings to clients at a phenomenal pace.

We hope that upcoming technology improvements will make it simpler to book delivery and collection rentals within the online booking tools. This will allow our clients to build a more holistic view of their car hire spend, with our current analytical tools provided in FCM Hub. Using the data, clients will be able to gather all the information they need in one place and analyse it in depth and efficiently.

We are also working closely with our Online Booking Tool partners to improve payment options offered to customers, because we recognise that billback and e-vouchers are a vital part of our customers’ requirements. Being able to deliver this more succinctly through online tools is vital so will become a focus in our technology developments in this field.

Data Driving

What are you doing to improve sustainability within your operations? Can you also provide data on carbon use/mileage etc for clients?

Hybrid and electric vehicles are making a massive impact in the car hire world now, which is great to see. They are easily bookable and comparable to conventional fuel vehicles in our booking channels.

The average mileage for our UK client rentals with one supplier during 2018 was 290 miles, for example, and of these bookings, only 27% were diesel fuelled cars. When going through the car rental RFP process we identify the most important aspect to our customers and many customers opt for these electric or hybrid vehicles in order to comply with CSR policies, as well as lower costs on fuel and carbon emission taxes.

In these instances, we work with our car hire providers to ensure we find the best possible way to deliver this for our clients and at the best possible outcome, based on both service and price, for them and their needs.

Are you expecting any big developments or trends in the global car hire industry in 2019 and beyond? 

Cars in general have always been a great example of the leap forwards in technology. Recent developments already allow us to unlock our rental cars using our mobiles; I believe technology is going to be key in this industry and how it develops.

Specifically, the next big technology developments for the general car industry are e-vehicles and driverless vehicles. I’m interested to see whether, in the not-too-far future driverless cars come into the sector to compete with transfers, or whether this will be considered an unnecessary expense.

In conjunction with this kind of ‘gadget tech’, I believe we will also see a larger uptake and tech advancements in the ‘green’ vehicle space to encourage and support the growing CSR focus on environmental impact and carbon neutrality.

Another big development, announced earlier this year, is the 10 step code of conduct implemented for car rentals. This will reduce the likelihood of rental vehicles being used in public terror attacks. While not directly related to corporate rentals, this will set a challenge for car providers to be able to ensure safety, security but also quick access to cars and enhanced user experiences.

One of the biggest projects previously has been ensuring all corporate clients are signed up to supplier loyalty schemes to ensure their time picking the car up is reduced. I believe with improved technology and databases, this will be a focus of car providers to reduce wait times and encourage a flawless pick up process with minimal human interaction. Avis has already set this in motion with its investment in Zipcar, and most recently in its upgraded app, which allows you to choose your exact vehicle from your phone once you have a reservation.

Car rental companies have, for a long time, gained a reputation in the corporate world for unnecessary upsell and being sales focused in depot. However, this is changing - and in the future KPIs will be far more customer experience and service centric. One provider leading the way here is Enterprise, which only promotes internal staff if their personal customer satisfaction ratings reflect good work and happy customers, regardless of how profitable the depot might be. This is extremely important to corporate clients who do not wish to have the hassle of disputing an invoice after the rental has taken place.

 

Want to find out more about corporate car hire for your travel programme? Speak to FCM’s expert travel team today.