Sam Sterry's blog: Small businesses playing the long game with long-term car hire
26 June 2018
Sam Sterry, Head of SME for Europcar reveals new research on how companies could reduce fleet costs by moving to vehicle usership rather than ownership
The cost of business travel is a major consideration for organisations both large and small, which could explain why more fleet managers are considering a change to the mobility solutions they use for employee travel.
According to new research commissioned by Europcar UK, 43% of senior business decision makers revealed that sustainability is the joint top concern, alongside control of fleet usage and fuel costs when it comes to their fleet policy. Next was control of fleet ownership costs (38%). One in three (33%) respondents think that control of employee mobility costs is one of the most important goals for their fleet policy.
It seems, therefore, that fleet managers are slowly looking at the alternatives to ownership - eliminating the depreciating asset from the balance sheet. By considering their mobility needs more broadly, and moving away from vehicle ownership fleet managers could be addressing the three main concerns identified by our research.
The shift from ownership to point to point travel has, so far, been more accepted by younger travellers - especially those living and working in urban areas. No doubt, constant media speculation about the decline in car ownership has had a role to play as we see, almost weekly, predictions about the decreasing appetite for owning and running a car. But the need for mobility is clear. Individuals want personal mobility, more streamlined transport, without the heavy price tag associated with ownership.
How do fleet managers make this approach work for businesses? Car sharing, car-pooling and even chauffeur services are all mobility solutions that can be integrated into a holistic fleet strategy, alongside the more conventional vehicle hire.
Moving away from a short-term, short-sighted vision, long-term hire is also becoming increasingly popular. Eliminating the need for a business to make a commitment to a 3-4 year lease or outright ownership, long-term hire meets many of the needs of today's businesses. And by offering access to brand new vehicles, through a quality long-term hire partner, businesses not only have the duty of care challenges covered, but can tackle fuel efficiency too. Controlling costs is easier too through a service like Europcar's long-term hire, with no vehicle maintenance costs and no lost work or reputation caused by vehicle downtime.
Businesses looking to reduce their fleet costs could consider moving from ownership to usership, especially as more mobility solutions are being delivered by key suppliers as an integrated service offering. In an uncertain climate, businesses need flexibility, free from the commitment of lengthy contracts, as well as the ability to expand or reduce their fleet to meet demand and help manage cash flow.