A growing number of organisations are looking at merging fleet, travel and expense management to improve cost control and compliance, new research suggests.
Around one in 20 companies already employs a dedicated mobility manager, while more than one in five (22%) believe their fleet and travel management departments could merge, and are interested in an IT platform to deliver this.
Analysts believe this could eventually lead to organisations paying employees a mobility allowance, rather than providing a company car, in an effort to encourage cheaper, more sustainable travel.
Martyn Briggs, industry principal for mobility at Frost and Sullivan, told Fleet News: “We are witnessing a shift away from just considering the total cost of ownership of fleet towards managing the total cost of mobility for the organisation.”
Crucial to this transformation will be the smartphone, thanks to a proliferation of applications to compare travel modes, view travel information, hail cars on demand and even access and operate car-sharing vehicles.
“This connectivity has opened a new opportunity for businesses to utilise such services, whether to save costs or increase convenience and options to employees,” said Briggs.
Frost and Sullivan spoke to more than 450 key fleet and travel decision-makers employed at organisations across five European countries, to test the current usage, policies, and willingness for such new mobility business models in the corporate world.
Half of those it spoke to were already piloting or deploying mobility solutions, particularly around corporate car sharing, integrated mobility and car clubs.
It also discovered that the boundaries between fleet, travel and expense management are becoming increasingly blurred, with continued convergence and adoption of mobility management expected.
Briggs explained: “We spoke to several personnel who were already employed to handle both , especially in regional headquarters of multi-nationals looking to rationalise their administration spend.”
The Fleet Industry Manifesto, which has been produced by the BVRLA, ACFO and Fleet News, calls on the next Government to support car clubs and mobility services through a range of measures.
They include offering incentives to encourage drivers to choose car clubs and car rental over private car ownership; and enabling car club and car rental information systems to integrate with public transport systems.
For its part, the current Government announced in last month’s budget that it will introduce new ways for Government employees to book transport and accommodation through the ‘sharing economy’ when travelling on official business.
The sharing economy takes a variety of forms, often leveraging information technology to empower people and businesses with information that enables distribution, sharing and reuse of excess capacity in goods and services.
The Government says it will encourage local authorities to use their business rates discretionary relief powers to support the sharing economy, including car clubs.
Meanwhile, two pilot schemes will be launched in 2015-16 in the Leeds and Greater Manchester areas, to trial initiatives in shared transport.
BVRLA chief executive Gerry Keaney said: “We want policy-makers to understand the integral role that car rental and car clubs are already playing in the sharing economy, and their potential for future growth, given the right Government support.”
The growing popularity of pay-as-you-go road transport is already helping to reduce congestion and air pollution in urban areas and has the potential to achieve even greater benefits. A 1% increase in the use of car rental at Heathrow would eliminate 225,000 unnecessary car journeys to and from the airport, says the BVRLA.
In London alone, car journey sharing and car clubs could grow by 80% to include as many as 800,000 members by 2020. This would mean 79,000 fewer cars on the road, resulting in a 4.6% fall in NOx emissions and a 5.6% fall in CO2 emissions.
Frost and Sullivan measured the interest in short-term vehicle access, in its Future of Corporate Mobility report. It found that 52% of respondents in the UK currently used corporate car sharing, pooling or a car club, but a further 17% were interested in using them in the future.
France had the highest current use (66%) and Belgium the least, with just 46% employing car sharing services.
More than two-thirds (69%) of respondents to a study, which was organised by the International Auto Finance Network and sponsored by Grant Thornton, said they expected to see significant growth in the demand for mobility services over the next few years (Fleet News, April 2).
Leasing companies and traditional car rental operators have been quick to develop products to take advantage. Alphabet has its car-sharing service, Alpha City, Hertz has launched 24/7 and Enterprise Rent-A-Car has developed its CarShare programme, for example.
Enterprise has also acquired City Car Club, Britain’s biggest independent car sharing company, to support what it describes as a fast-growing demand for car sharing and mobility services amongst businesses (read more on page 16).
But what sort of services do companies want to see delivered to them and their employees through one integrated platform?
The Frost and Sullivan research shows that more than half of respondents, when asked to rank their top five services for integration, were keen to see hotel and flight booking (55%) and car rental (53%) included. Train ticketing (44%), car fuel payment (41%), trip planner (38%), parking payment (29%) and taxi payment (23%) services were also preferred.
Briggs said: “Our key finding was that there is a fundamental shift in the way organisations are providing B2B mobility solutions to their clients. Those that can deliver a compelling user experience to handle the pre-trip, in-trip, and post-trip information and reporting are likely to succeed in penetrating more of the corporate market in years to come. This is attracting industry sectors, from vehicle manufacturers and third parties such as leasing and rental companies, to technology firms and travel management companies, all aiming to deliver their take on an integrated door-to-door corporate mobility solution.”
In the UK, almost a quarter (23%) of fleets questioned said their preferred supplier would be a leasing company, while corporate travel agencies came a close second with 21%. But just 8% said they wanted a technology provider to supply them with integrated services.
Frost and Sullivan says the continued demand for data and reporting will drive the mobility market, especially when more than half (52%) of the sample did not know how much they spent on mobility services, whether as a quantified range or as a percentage of company turnover.
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