Renting a car or van is currently “too cheap” and there is a risk that fleet managers and leasing companies will simply opt for the lowest price, rather than choosing the supplier that offers the best service.
That’s the view of Roger Hancock, managing director of Thrifty Car & Van Rental, who has been involved in the business since 1986. Back then it was Scot Hire but in 2006 it acquired the Thrifty master franchise for the UK and became Scot Group, trading as Thrifty Car & Van Rental.
“The marketplace today is too price-sensitive,” he says. “There is an over-competitiveness. We are a crazy industry that underprices because there is generally over-supply.”
He insists that Thrifty won’t “chase every piece of business that is available”.
“We are looking for the cream of the corporate sector as our partners,” he says. “We engage with partners for long periods of time, partners that understand the relevance and importance of service rather than price.”
The majority (75%) of Thrifty’s business is corporate. Its partners include the top five companies in the FN50 (Lex Autolease, LeasePlan, Alphabet, ALD Automotive and Arval) and most of the top 20. The company has picked up numerous customer service awards from its leasing partners over the years and was named LeasePlan’s rental supplier of the year for 2014.
Caroline Gallagher, sales director at Thrifty, was awarded leasing hero of the year for an outstanding contribution to the LeasePlan account.
“In the 28 years that I have worked for the business, we have never lost a corporate customer on service,” says Hancock. “We have lost a customer or two on price but never on service. And some of those customers have come back to us because of poor service elsewhere.”
Fleet News: How many customer complaints do you get?
Roger Hancock: We have a contact rate of 0.5%. Those are not complaints, they are contacts – people querying their fuel bill, or some damage, or the duration of the rental. We would class 10% of the 0.5% of customer contacts as complaints – that’s where we have investigated and haven’t delivered the service we strive to deliver. We run regular reports that go to all of the senior team, so everyone is aware of how we are performing. We guarantee a resolution within three working days for corporate customers.
We feel we manage it well because we do everything from cradle to grave in one centre, which stops matters escalating. Everything we do is in-house – it’s about control of customer service. All of the sites we operate are ours and all of the people who work within them are our direct employees. We have no sub-franchisees and no agency drivers, and all the vehicles are ours.
FN: Damage recharges can cause tension between fleet managers and rental companies, how do you address that?
RH: It’s an unfortunate consequence of vehicle rental, but it’s one that needs to be dealt with consistently, fairly and openly – which is what we try to achieve.
Each vehicle that is delivered has a pre-assessment that the customer sees and is able to challenge before they drive the vehicle. At the end of the rental, if there is something additional to the pre-rental damage report, that area of damage is photographed so it is evidence to the renter and it is done in situ.
We charge the same level of labour and parts to every customer, irrespective of how we have had it repaired, whether it has cost us more or less, and we have a consistent charge-out rate to the customer. It isn’t a profit centre for us.
FN: How do you reduce cost for corporate customers?
RH: I am passionate about not offering bundled rates. We offer menu pricing. If someone doesn’t want their vehicle delivered, then it shouldn’t be as expensive as someone who does. If someone wants it in office hours it shouldn’t as expensive as someone who wants it outside office hours. Similarly with returning vehicles outside hours.
All of the things that add cost to the service provision we look to charge for, so the customer can decide whether they want to access those additional services or not.
FN: What other new products or services have you introduced recently, or have in the pipeline?
RH: We’ve introduced Thor, the next generation of our online booking system, which we have built in conjunction with a major high street bank, ensuring the highest levels of security.
We have just launched our Elite Car service, which is principally built around Jaguar Land Rover and BMW product, in response to retail customer requests and some requests from our corporate customers. Those vehicles will be offered at every site.
We have also just launched hourly rental, which I know a number of our competitors have, too. We are about to extend our opening hours so every location will be open from 8am until 6pm on weekdays. We expect to launch a 24-hour service by the summer, which will be based in our reservation centre, and we will have locations on call to service requirements.
We are just about to launch Flexi Xchange for our Flexifleet customers so they can upgrade, or downgrade, or change their vehicle for between two and four weeks in any six month period within their agreement, for a small consideration, rather than having to rent an additional vehicle.
FN: Will you look at car clubs or car sharing schemes?
RH: That’s not something we’re likely to be involved in. I’m not here to criticise that industry, but I have concerns about duty of care – ensuring that each time a vehicle is rented it has been checked, that something hasn’t happened in the car between one customer and the next. I want to touch that vehicle each and every time so when we rent something to a new customer they know, and I know, that the vehicle has been checked.
On an hourly basis, with street parking, that is impossible to achieve. I understand that, and I’m not critical of it, but that’s not where I want to be. With our hourly rental service the vehicles will be collected from our locations and returned to our locations. Before each car goes out it will be cleaned and it will be checked.
FN: How have you lowered your fleet’s emissions?
RH: Our average CO2 on our car fleet has come down from 137g/km to 118g/km, which we believe to be the lowest in the industry. Because we do less buy-back business we are able to acquire more efficient vehicles. We do that for common-sense reasons, as well as environmental reasons.
We have 250 plug-in hybrids on our fleet. We don’t have any fully electric vehicles, because we have no requirement from any customers. As and when we do, we will endeavour to supply them. Our new booking system allows customers to select vehicles by CO2.
FN: Why did you decide to become a Freight Transport Association Van Excellence partner last year?
RH: Our head of commercial vehicles is very keen on what Van Excellence has achieved. We are audited and it demonstrates quality. It also enables us to engage with other Van Excellence members. The van market is growing – and we intend to grow with it.
Hancock says that the business has “grown organically and sensibly over the past 30 years”.
“Our growth over the past five years has been double digit year-on-year,” he says.
This year he intends to open a number of new sites – subject to contract.
“We will break the 100 barrier by the summer,” he says. “We will open more locations as and when we identify the right locations, and we have a couple of significant business wins that we will announce later. We expect double digit growth again in 2015, with a big curve towards the end of it. But the marketplace needs to have sustainable rates for us to continue to grow. I’m interested in running a profitable enterprise but not at the expense of service levels.”