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Pandemic fuels alternative rental business

Date: 24 June 2020

So-called 'social distancing vehicles' have become vital to operators since lockdown began, while mobility solutions continue to have potential. Jack Carfrae and Illya Verpraet report.

Demand for business rental is said to have spiked during the Covid-19 pandemic as companies have hired additional vehicles to keep employees at safe distances. 

Fleets have been using what are informally known as 'social distancing vehicles' when more than one member of staff is required to undertake the same journey, which has allegedly increased the requirement for short-term hire in certain sectors. 

One fleet operator working in the utilities industry, who spoke to Business Car on condition of anonymity, explained: "We've had to socially isolate or distance teams within single vehicles, so what would have been a team of two employees in a large truck becomes the driver in the truck and someone else in a small vehicle following behind. 

"We've had demand for what we call social distancing vehicles, which can be something like a Fiesta van or a small car - it is literally a conveyance - to follow a 32t truck to site, both get out of their cabs, and then they go to work and dig their hole because [our] clients are not allowing them to spend time in the cab together."

He claimed demand was so high that rental companies were struggling to supply the models in question and described it as "the most obvious case of supply and demand I've seen in a long time", as fleets increasingly sought small, economical support vehicles in a bid to minimise the additional costs. 

"We've struggled because the small cars are the ones that we want and there's none around - certainly small vans - because everybody's doing the same, and I think it's going to get worse. 

"This is an expense we don't really want. We don't want something that's burning fuel left, right and centre because it's following a truck. It's a case of trying to do it as cheaply and cost-effectively as possible, while still remaining flexible enough to move our people around."

In March, Europcar claimed the logistics and delivery sectors were "facing unprecedented demand" and, while its car business suffered during lockdown - as was universally the case for the rental industry - it later reported a 2.6% year-on-year revenue increase from its vans and trucks arm in the first quarter of 2020, citing home deliveries, agriculture, and key infrastructure and ground transportation contracts as the main sources of demand. 

Business Car has experienced similar measures with press demonstrator vehicles supplied after lockdown. Ford, for example, began delivering vehicles accompanied by Tourneo vehicles fitted with partitions, so both employees remain sufficiently distanced during the return journey and the driver of the test vehicle avoids public transport. 

After speaking with two major rental companies, a spokesperson for the BVRLA said there was "absolutely no shortage in supply of cars or vans of any description" but conceded that some businesses were hiring two vehicles instead of one. 

He added: "Most rental companies are in cost control mode. They're trying to reduce their fleets because business has really slumped, so they're probably at a stage where they're trying to control costs rather than add to their fleets. 

"You could imagine why there might be sporadic bits of the market where there is a surge in demand for that type of vehicle. [and] anecdotally, I have heard that there is more demand for minibuses and larger vehicles so people can properly space themselves out."

The fleet operator to whom Business Car spoke suggested the pandemic would likely cause a long-term change in the way firms used business rental and called on the industry to develop more flexible offerings for the corporate sector. 

"A lot of rental companies have talked about the move from being a rental company to a mobility company, without being able to truly describe and quantify what that means - because it's largely still rental. I think there could and should have been a lot more innovation, and whether that comes out of something like Covid-19, I don't know. As a customer, we are going to have to think differently about how we go to work, so we will then be reliant on our supply chain and our framework to help us achieve that."

At the moment, mobility solutions more often than not mean car clubs and short-term rental. Commenting on how these schemes are weathering the Covid crisis, Antonia Roberts, deputy chief executive of Como UK, which represents and promotes mobility solutions, commented: "There is no doubt that Covid has changed the situation for car clubs - they have lost revenue during the time when people weren't travelling in the lockdown and occurred extra costs with new cleaning regimes. 

"The operators all made strident efforts to support key workers, rearranging fleet locations and providing discounted offers. Going forward there will be a mixed picture - some people will have reservations about travelling in anything other than their own vehicles, but those who are aware of the cleanliness regimes which are in place may prefer to use shared cars rather than public transport.

"Longer-term we are likely to see new patterns of travel behaviour with greater shifts to home working. Taking away the need to commute by car is the key to making it possible for households to move from private ownership to plugging their occasional car use through a shared service."

A spokesperson for Enterprise shared the sense of cautious optimism, reporting slowly building bookings for its shared mobility products and anticipating that this will remain an important service for organisations to provide to employees returning to work.

The BVRLA agreed that rental and car clubs can be a solution for those who need to return to work safely and want to avoid using public transport but cannot walk or cycle the required distance. However, the spokesperson wasn't convinced that increased working from home might trigger a major shift in fleets' travel policies: "People are unlikely to voluntarily opt out of having a company car unless their tax situation changes. Employers may reconsider their transport policy but would probably want to wait and see how workplace and travel patterns evolve in the medium term. Grey fleet may be the first target as management looks to tackle unnecessary costs and duty of care risks."

Speaking to Business Car, Alphabet rental services manager Andrew Bovington said the company's short-term rental product, AlphaRent, kept operating through the Covid crisis to support customers. The AlphaCity corporate car-sharing product is still relatively experimental, with a narrow customer base and in continuous development, with big changes planned in the next 12 months. 

Asked about the immediate future, Bovington said: "I think we just need to wait to see what our customers approach us with and make them aware that the AlphaCity product is still there and it is going through a bit of a refresh, a relaunch, and some changes to the product as well."