EXECUTIVE REPORT


A typical United Rental franchisee in County Down…


United we stand


Could vehicle hire provide a profitable additional revenue stream for tool and plant hire operations? Dan Jenkins talks to United Rental Group about its franchise offering.


Despite the well-documented woes of British car manufacturers, the UK van market remains buoyant. Recently the Society of Motor Manufacturers and Traders (SMMT) revealed that March 2019 saw the highest-ever sales of light commercial vehicles (LCVs) in a single month, with more than 66,000 new registrations.


In this growing market, one company has spotted synergies between vehicle hire and plant or tool hire. United Rental Group exhibited at this year’s Executive Hire Show, promoting an ‘out of the box’ solution.


Its franchise programme, United Rental System, has been operating for almost 30 years. It aims to provide start-ups with all the business support and finance required to help them establish successful vehicle hire operations. It claims that utilisation rates of 70% are realistic, along with lower-priced vehicles, thanks to the Group’s buying power.


Natural expansion


Aaron Firth, Marketing Director, said: “Since 1991 we have developed a model which works for both existing car rental businesses and for new starts, such as people involved in another area of hire who see vehicle hire as a natural expansion. That model isn’t just about acquiring a fleet, but also accessing deals on vehicle finance and software to run the business. We have about 40 partner suppliers in total.


… and another of its outlets in Glasgow.


“Over the last couple of years, equipment hire has been an area of increasing enquiries for us. It is not too difficult for someone involved in plant or tool hire to extend into vehicle hire. They deal with the same issues of asset utilisation and depreciation. Also, they have an existing pool of customers who are themselves probably hiring vehicles for various reasons.”


United Rental System is a licensee network of more than 570 independent vehicle hire companies, operating from over 700 locations throughout the UK. The combined fleet is over 81,000 vehicles, ranging from cars and light commercial vehicles


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to minibuses, 4x4s, trucks, tractor units and, even, vehicle-mounted access platforms. Providing commercial vehicles accounts for around 70% cent of its business.


The operation’s senior management team vets potential licensees to ensure they are the right people to represent its brand. The process includes being mystery-shopped and checked for quality - in fact, successful applicants must first satisfy a 14-point pre-entry criteria list.


However, while the process is thorough, Aaron Firth claims that it is not overly long. “It can be set up in a matter of weeks. First, we need to establish there is market share available and that there isn’t another licensee in the area. The next step is making sure that the finances stack up, but beyond that it is a very simple process.”


The rise of Clean Air Zones


A key driver (no pun intended) for short-term hire over the coming years will be the rise of Clean Air Zones (CAZs) in major urban areas.


London’s Ultra-Low Emission Zone (ULEZ) came into force on 8 April, with non-compliant HGVs facing charges of £100 per day to enter. Birmingham and Leeds have already confirmed they will implement CAZs by 2020, with more cities expected to follow suit. Trucks that do not meet Euro 6 emissions standards will be charged to enter these Zones. Some will also charge vans which do not meet these regulations.


“Most of the vehicles in our hire fleet are less than 18 months old, so it is absolutely part of our offering to help customers move from using older vans and trucks,” added Aaron Firth. “The market is changing all the time: we are now seeing more hybrid vehicles and petrol vans are making a comeback, whereas in the past they were only offered as diesels. We are pretty much ‘agnostic’ across vehicle marques, so that enables us to try and keep one step ahead of these changes.”


• 01246 282000 www.unitedrentalsystem.co.uk


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