CAR RENTAL
A buyer’s considerations
Deborah Short, global travel manager, Willis Towers Watson Willis Towers Watson was created at the beginning of 2016 by the merger of professional services specialist Towers Watson and global insurance company Willis.
Its car programme has a budget of US$2 million per annum and covers 20 countries. Experts often recommend managers consider the total cost of travel, not just the rate a supplier offers for a specific item. Short says she went one step further and took account of the total financial effect on the company rather than just the cost of the rental.
money on taxis or it might opt for a car-shar- ing solution where the mileage and time taken can be recorded, who did it and their department,” he says. He points out that many people who
buy car rental also manage fleet and that car-sharing is evolving into an option for requirements formerly fulfilled by fleet.
2 Taxi and ride-hailing services Ride-hailing – a term used traditionally for the taxi sector – often now describes tech- nology-based alternatives, such as Uber and Lyft. Both are increasingly becoming part of the managed travel programme. More travel departments are negotiating a taxi service for the whole organisation to replace a process of reimbursing expense claims for taxis. And traditional car rental companies are responding to this trend. Europcar, for example, acquired Brunel,
a chauffeur-drive company used by many London-based corporates, especially invest- ment banks, law and advisory firms, and financial institutions. Customers can use an app to book a point-to-point taxi/ride-hailing service throughout the UK.
3 Car rental Car-sharing and ride-hailing may be the new darlings in managed travel’s ground transport stable, but that doesn’t mean that car rental is standing still. Traditional car rental companies are
one option; a broker, such as Nexus Vehicle Rental, another. Nexus doesn’t own rental cars but it makes use of an extensive network of partnerships to offer corporate clients a wide range of vehicles. Dean Rose, head of national accounts and new business, explains that the organisa- tion works with 220 suppliers which can offer 550,000 vehicles at more than 2,000 UK locations.
BUYINGBUSINESSTRAVEL.COM
THE BUYER
1 Programme and policy Whether fleet manager, travel manager or procurement manager, the person with responsibility for the programme must identify and communicate its requirements. Many organisations offer travellers a
choice – being driven (chauffeur-drive), traditional car rental or carpooling and fleet. Travel policies often include guidelines for when each option might be used. Duty-of-care is a consideration. One large multinational corporate limits eligibility for airport car hire to those arriving on flights of less than 13 hours’ duration. Some com- panies restrict how many of its employees may travel together in the same vehicle. Restrictions on eligibility because of age or driving history are common. Standard
Contracts are usually awarded on the
basis of price. Deborah Short, global travel manager at Willis Towers Watson, explains: “Car rental is far more cost-driven than hotels and air because there’s not a lot of service differential between the large global car rental companies. All generally have the same size of cars, at the same airports and offer the same service.” The rental companies might argue to the contrary but they all operate on a virtually global basis and the different cultures and levels of business maturity mean that differ- ences are likely to be greater among markets than from supplier to supplier. UK organisations differ from their overseas counterparts in ground transport requirements in two significant ways: (i) insurance and (ii) collection and delivery.
“Car rental is far more cost-driven than hotels and air because there’s not a lot of service differential between the car rental companies”
practices vary in different markets. Willis Towers Watson (see box, above), for example, ensures its people are chauffeur-driven in India, the Philippines and South Africa. Buyers need to be aware that suppliers’
offers will be driven by the cost of delivering to the corporate’s travel requirements. What is the average duration? Are there a lot of one-way trips? Basic rules will apply. The higher the volume, the keener the rate.
2 The package Requests for proposal are commonly short term. Europcar’s Smith says: “Contracts are generally for 12 months and include a quarterly review to look at driving and usage behaviour. We have conversations about whether the service is right for the customer.”
The UK is the only market where a cor-
porate can self-insure and 90-95 per cent of UK corporate business is thought to be COI (customer own insurance). UK corpo- rates also have high demand for so-called delivery and collection, ie, taking a car to, or collecting a car from, the traveller’s home or office, rather than airport pick-up and drop-off which is common in other markets, such as the US. UK corporates also need to address the
same concerns as buyers in other markets: duty-of-care, data and technology, and the vehicles themselves. But how global are some programmes?
There may be a demand for ground transport solutions but some companies might want to manage it locally. For example, Sixt is
BBT March/April 2018 87
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