Managing director Gary Smith explains how Europcar UK Group is becoming a seamless mobility provider in the corporate sector. Editor Ralph Morton reports.
Wondering which brands Europcar operates in the UK?
Here’s our quick guide
- Europcar – corporate and retail rental
- InterRent – low cost rental
- Brunel – chauffeur car hire
- E-Car – electric car sharing
- Ubeeqo – car sharing
IT used to be so straightforward. Europcar did daily rental and some long-term rental. Full stop. That’s Europcar in its box, then.
But the company has been breaking boundaries for several years now as it makes progress on its journey of transforming itself from a rental company to a mobility provider.
The box sort of doesn’t fit any more then…
Time to reassess, clearly.
At the beginning of the year, the Europcar Group bought Italian car sharing company GuidaMi through its car sharing company Ubeeqo, in which Europcar has a majority share.
Earlier this summer, Europcar went further and bought SnappCar, the second largest peer-to-peer car sharing player in Europe.
Meanwhile, Europcar continued to play to its box with the purchase of Goldcar and several European van and truck rental companies to bolster its commercial vehicle rental business.
Nevertheless, the fleet and corporate rental market represent 57% of Europcar UK’s overall rental business. And an important part of that business is with leasing companies, whether it’s pre-lease and replacement vehicles (whether for damage or servicing), or providing a daily rental service on behalf of the leasing firms.
So, Gary, what’s it all about? Rental or mobility specialist?
“The business is about providing a convenient service for our customers, keeping them mobile and providing the vehicles in the right requirements.
“Therefore we are both those businesses. Our strapline is to be the global mobility leader,” explains Gary.
“We want to make sure we can provide all the steps of the service from A to B, whether it’s a taxi – (the company acquired London based chauffeur and executive driver services company Brunel in September 2016, which operates in 75 countries) – car sharing (eg Ubeeqo), EV car sharing (eg E-Car in the UK), traditional short term rental and long term rental. So it’s about matching the service to what the customer needs. We’ll provide the services that are most suitable at the time.
“Car sharing has brought technology to the sector. And that’s what it is giving us now. We’re not the only one, but such technology does enable you to walk down the road and open a car and drive off. You look on the app for your nearest car, then walk up to it, open it and drive away.
“Technology is really playing a part in rental. The next step for us is linking this to the local transport infrastructure to really become a global mobility provider.”
As you might expect, the concept of service is key to this mobility growth strategy.
“We want to make it convenient for our customers to use our services. You can walk down the road and access a car share vehicle, go to one of over 250 locations that are within eight miles of any postcode or we can deliver to your door.
“Some people can’t drive but that shouldn’t prevent them from being a Europcar customer through our chauffeur company. In the future, of course, their needs might be serviced by self-driving cars, but chauffeurs will do for now.”
Update on Europcar UK investigation in repair cost overcharging
- Following the recent commencement of an investigation, last June 23, by UK Trading Standards into repair costs levied by Europcar UK, the company is undertaking a thorough investigation and Europcar UK is fully cooperating with the authorities. Given the ongoing investigation Europcar cannot provide any more substantive comment at this stage.
- At this very early stage of the investigation, the Europcar Group has decided to record a provision of an amount of €44 million in its financial account for the first half of 2017.
Gary believes that, as well as being useful for the corporate sector, Europcar’s technology-led services are ideal for the small business and SME market. “They will take a view of how they use their capital – whether it’s buying or leasing – but because your business might change, Europcar can provide the flexibility that change requires through our suite of services.”
Our interview took place before Europcar found itself embroiled in ‘repairgate’, where the company has been accused of overcharging customers for repairs. The allegation is still under investigation – see Europcar’s statement on the investigation in a separate panel.
While the scandal will have done little to inspire consumer confidence in rental services, Europcar is pressing on with the rental side of the business.
Expanding the commercial vehicle rental offer
In which case, how does Gary see the rental market developing?
“I think you need to consider what are the mobility needs of a company first and then what do they want to drive and what do they want to travel in. So we have everything from EVs , hybrids and diesels, to specialist vans, dropsides, tippers. So we’re not offering the vanilla product we have expanded our network of services by listening to what our customers want.
“For example, we’ve learnt over the last 18 months our service in light commercials was too narrow. That has proved to be very positive for our customers.
In terms of rental, Gary lists the top five most rented vans as
- Small Vans (CDV)
- Medium Vans (SWB)
- Large Vans (LWB)
- Extra Large Vans (XLWB)
- Luton vans with tail lift (Luton)
“We have a nationwide van product with a combination of 14 supersites and hubs around the country. These are specialist van locations with dedicated van sales personnel that concentrate purely on our specialist commercial vehicles, and we have vans available at 100 of our 250 locations.”
Europcar in the UK now operates 7,000 commercial vehicles – all of which are diesel with Euro 6 engines, having significantly invested in expanding the commercial vehicle offering over the past two years which includes a broader choice of specialist vehicles to match customer demand.
“Our commercial vehicle fleet is now made up of a mix of core vans such as CDV, SWB, LWB as well as an unrivalled extensive range of specialist vehicles from Crew Vans to ready to rent Chapter 8 and 4X4 pick-ups,” says Gary.
Testing new ideas in the Paris innovation lab
Responding to customer demand is one thing, but providing new products into the market is another. So Europcar has an innovation lab in Paris to see what the right products are to bring to market. “Not all of these work,” Gary continues, “but it’s important to innovate all the time.
“One such idea was the SME Business Ready product which came from the UK and was fed into Europcar Innovation Lab. Business Ready was subsequently launched in mid-2016 and we have extended the service to four major airports with a view to rolling this out across the entire network.
“It means you step into the car ready to do your business. So Business Ready cars are equipped with sat nav and Bluetooth – the business essentials – and are diesel only. They are typically priced at a £3-£4premium above the normal compact rate, but the take up on this from SMEs and corporates has been very good.”
Will rental exist in the future?
Given the company’s transformation into a mobility provider, and the power of technology, I wondered if rental will exist in the future?
“Absolutely. We always believe car rental will exist in one shape or form. Self-driving cars will arrive at some stage but not everyone will be comfortable with that. It might be because a customer needs a car for varying amount of time. As a nation we like our cars. And we have them sitting around idle for a large part of the time but with the availability to drive at any time.
“So getting the right car to the customer at the right time is very much our ethos. And car rental will exist. In 10-15 years time it will look different. But certainly in the medium term it will be here.”
Changing to greener rental
The type of rental car will certainly start to change as customer sentiment turns towards cleaner and greener options. In response Europcar plans to have 5% of its vehicle stock EVs by 2020 says Gary.
“We have a role in the environmental area. We work with OLEV because we can help play a role in the future of driving down emissions in the UK.
“The rental car parc is the most efficient on the road on both emissions and NOx. The cars are 4-6 months old, so they are the newest the manufacturers are making.
“We can help reduce car ownership through use on demand and help clean up air in the cities. Car sharing in cities takes it to a different level. In Manchester Mayor Andy Burnham decided not to have a congestion zone but if he wants to control air quality in Manchester we are talking to him to see what role our business can have in delivering cleaner air.
“Another example is at Milton Keynes Central rail station – now you can pick up an electric car from us to finish your journey once you step off the train.”
Innovation and the changing market
Gary believes that innovation will be the market driver over the next five years, playing a greater role than it has in the last 20. “We have to be fleet of foot to ensure we can play a role,” believes Gary.
“Of course, everyone wants to be efficient – including cost-efficient – that’s a challenge and opportunity. We want to cut down wastage and increase utilisation – which is over 80% currently.
“More to the point, we want to provide flexibility which includes long term solutions. For example, the ability to change terms on both the car, say estate to saloon, and length of the rental.
“But above all, the one thing I would like to achieve with Europcar by the end of this year is this: that everyone understands the whole suite of mobility we provide, from the small business to the leasing companies. It’s perhaps not as well known as it should be. That’s my goal for the rest of the year.”