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Breakdown cuts do fleets a disservice
Date: 28 November 2007
The money men behind RAC and The AA just aren't taking The Insider's needs into account
I don't know why I should still be surprised at evidence of corporate cost-saving after all these years, but I am.
Take the 24-hour emergency Audi hotline I called on Saturday. My borrowed car hadn't stopped running, but I needed help to steer me through an apparently broken link on the complicated interface. So I call, and realise it's an RAC-provided service when I'm in a telephone queue to speak to one of that company's assistants. I queue and queue, until my dream of speaking to some crisply teutonic expert who would be on hand to answer my question starts to fade. I hang up and drive on.
The RAC is a good example. The image is of an organisation building on its heritage to offer specialist help to fleet and private customers alike. They do have dedicated staff on board - I've dealt with some of them. But they are part of the huge Aviva organisation - also home to Norwich Union - and that means each day a team of expensively educated MBAs coldly assesses its earning potential. Put it this way, Aviva didn't come to be worth £18bn by paying to put crisply teutonic experts on Audi-branded hotlines.
However, it did make itself a lot of money by selling insurance, loans and anything else that people buy from a recognisably trustworthy name. The private equity-run AA reached the same conclusion. Does that help us, the fleet customers? Not a bit. Even the extra money earned isn't ring-fenced by dint of it being a separate company, as it would before. As a separate company the windfall might have put more vans on the road, more windscreen centres near where you might be situated. Now it goes to feed the cravings of the cold-hearted MBAs.
“As a separate company the windfall might have put more vans on the road, more windscreen centres near where you might be situated. Now it goes to feed the cravings of the cold-hearted MBAs.” |
The Insider |
You might think I'm naive and possibly I am, but I'm not about to congratulate a parent company on maximising its earning potential when I'm faced with a (private) bill for a windscreen that turns out to be double that of a local independent fitter - who'll fit it for free today.
The latest news on RAC is that they're restructuring, which will include "an enhanced proposition for our corporate partnerships", whatever that means. The Aviva parent (the one worth £18bn, remember) said recently it plans to reduce costs by £350 million across the board, while some expensively educated MBAs elsewhere have speculated that Aviva might off-load RAC to "achieve a share price re-rating without a break-up".
The reality versus perception problem in the service industry regularly penetrates my professional life, which is why I'm happy to be mostly dealing with cars. It's true what they say: you can't spin a bad motor.
