Next, the public sector

As the pressure on central and local government continues to affect public spending, this creates one of the biggest challenges – and opportunities – for the daily rental sector.

Currently there is a strong view that there is a serious lack of execution on the ground when it comes to managing vehicle rental and mileage allowances in the public sector, with hundreds of millions of pounds being spent every year on vehicle rental and on paying private mileage allowances to staff who use their own cars on government business.

But the combined efforts of the rental industry as a whole could tackle this challenge, and deliver significant cost savings.

For example, if all this activity was brought together into a single procurement exercise and accessed through a single portal available to all government users, there would be immense benefits.

Back-office functions that can easily and more cost-effectively be serviced by specialist suppliers could be cut, freeing up resources to deliver the services taxpayers have a right to expect.

Integrated solutions to tackle grey fleet usage could also be implemented in order to reduce costs – and improve safety. Nexus has pioneered a system that allows users to input business mileage, the type of vehicle to be used and the amount paid per mile.

This then compares the cost of a staff vehicle to rental costs. If rental is cheaper, the user can simply press ‘use rental’ to book a vehicle from an approved supplier. It’s an incredibly simple and cost-free tool that could save millions.

Now let’s consider the needs of smaller and medium-sized companies.

These businesses need flexibility and cost control when using rental as part of their transport strategy. Being able to do business online is absolutely crucial – keeping down in-house people costs while leaving the experts to guarantee vehicle availability at the best rate.

What’s also crucial for smaller organisations is cost control –particularly when it comes to grey fleet usage.

The big challenge for UK employers that have staff travelling for business is managing the economics of private vehicle usage or providing a rental vehicle for the trip.

Employers paying out for mileage on private vehicle use really need to make sure they make the right financial choice for each journey. They also need to think about safety.

If an employee uses their own vehicle, is it suitable for the journey and is it in good condition? It’s very hard to monitor the condition of employees’ own vehicles, and there could be serious liability risks for an employer should there be an accident.

But there is often a misplaced belief that it’s cheaper for an employee to use their own vehicle rather than renting.

And we mustn’t forget that businesses are meant to be moving towards meeting the government’s stated aims of managing and reducing CO2 emissions.

The Nexus ‘Mileage versus Rental’ tool, accessible via our rental management system, provides an eminently simple one-step process to identify whether it is more economical to choose a private or a rented vehicle for a particular journey.

If rental is shown to be more cost-effective, the vehicle reservation can be made automatically online. The system also offers the option to rent a smaller-engined vehicle, providing both cost and environmental benefits.

How can the daily hire industry, and daily hire intermediaries, help fleet managers to reduce costs?

Short-term rental has a clear role in the fleet manager’s toolkit.

But with a heightened focus on cost control across all areas of the public and private sector, how do fleet managers decide where it should fit alongside outright vehicle purchase, long-term leasing and contract hire and grey fleet usage?

Working with the right provider, short-term rental delivers flexibility – you only rent when vehicles are needed. It offers well contained cost control – paying by the day means idle vehicles won’t be incurring cost for the business user.

Rental offers the right vehicle for the job, and the facility to choose the vehicle group by emissions to help a business meet its CSR objectives. And it offers the assurance of vehicle quality – rental vehicles are maintained to a high service standard.

Typically, short-term rental is considered by fleet managers to be the next step up from private vehicle usage. It can step into the breach at short notice; providing tight cost control, good quality management information and valuable insight into driver usage.

It also provides the quality assurance that business drivers are in the best quality, serviced and maintained vehicles, backed up by 24/7 roadside assistance.

The sheer flexibility of rental can help fleet managers reduce cuts. Hourly and one way rentals for example, backed up by delivery and collection cut down miles incurred and cut fuel use. Plus, the longer the rental, the more cost-effective it can become.

There are dozens of rental companies. If a fleet manager wants to have just one supplier, how should they select them?

The fleet manager can use this checklist as a starting point for their selection process:

Nationwide coverage: Make sure the supplier can provide vehicles when and where you need them wherever staff might be in the country. That might seem an obvious requirement, but it’s important to think about the extent of coverage you might need.

Do bigger customers get served first? Make sure your provider has sufficient supply to meet your needs. If you are a smaller company or a small user of rental, you might find you don’t have the same pulling power as bigger customers and this may affect your ability to get vehicles when you need them.

Delivery and collection: Do you need it to cover both home and business addresses? If so, make sure to ask the rental provider if they can meet this as it will save money.

Managing your carbon footprint: If you have an eye on your carbon footprint, any provider that can give you information on CO2 emissions, even if it’s only post-rental, will help your cause. Though it’s obviously better to select the vehicle based on emissions before making your reservation.

Vehicle choice: Consider whether you will need refrigerated vehicles, vans with tail-lifts or specialist vehicles and make sure the provider can mix and match.

Meeting the peaks and troughs: Seasonal demand or unexpected contracts can hit a fleet hard. Rental can fill the gaps, so it’s vital to use a provider that has a big enough supply chain to meet your requirements, whenever they occur.

Maintaining your reputation: Choose a rental supplier that can provide like-for-like vehicles, so that your business can maintain a seamless level of customer service.

Online reservations and management information: Intelligent rental management tools will give you an accurate and efficient service while controlling your costs. They will put you in control of your drivers too, giving you the facility to monitor vehicle use and driver behaviour.

Not all rental is short-term: If you are not sure how long a vehicle will be needed for – perhaps due to contract work or seasonal fluctuations in business – check that your provider can provide flexible short to mid-term rental solutions at a cost-effective rate, and that this can be negotiated on a longer-term basis. It can save a lot of money and hassle compared to owning or leasing.