Car rental companies are boosting their fuel-efficient and alternative-fuel vehicle offerings in response to growing corporate interest in environmentally friendly ground transportation as well as rising fuel costs.
Hertz Global Holdings in June announced that it was expanding the availability of hybrid cars from its car rental locations, adding 3,400 Toyota Prius hybrids to its fleet by 2008. This follows the company's launch of a "green collection" last year, in which it restructured its fleet to boast about 35,000 cars with fuel-efficiency ratings of at least 28 miles per gallon, including such models as the Toyota Camry, the Ford Fusion and the Buick LaCrosse
(BTN, Sept. 25, 2006). It's part of a multiyear effort to achieve a fleet with 265,000 vehicles getting at least 28 miles to the gallon and 176,000 cars, or 47 percent of the fleet, getting 32 miles to the gallon, Hertz chairman and CEO Mark Frissora said.
Avis Budget Group said more than 50 percent of the vehicles in its fleet have a fuel efficiency rating of at least 28 miles per gallon. It also has added the Toyota Prius at locations in California; Portland, Ore.; Seattle and Washington, D.C., said senior vice president of corporate sales Bob Lambert.
"There is growing interest from corporate customers in hybrid vehicles," Lambert said. "We are also looking to expand the markets and add more hybrid vehicles to further diversify the fleet and meet demand as it increases."
Enterprise Rent-A-Car, which is in the process of acquiring the National and Alamo brands, also last month announced that it was designating its Washington, D.C., branch as an "E85/FlexFuel branch," where more than half of the fleet will be able to use fuels that are 85 percent ethanol, meaning they reduce greenhouse gas emissions by up to 20 percent. Enterprise also has more than 3,000 gas/electric hybrid vehicles in its fleet, and about 47 percent of its fleet, or more than 334,000 vehicles, have a fuel efficiency of at least 28 miles per gallon.
Neil Abrams, president of Purchase, N.Y.-based car rental consulting firm Abrams Consulting Group, said car rental companies have become more savvy about marketing these fuel-efficient fleets, but the reconfigured fleets also make economic sense for the companies. "It's a demand-driven business," Abrams said. "They happen to be renting a lot of smaller cars, and there's less demand for sport utility vehicles."
Car rental companies also are changing internal policies to improve environmental performance. Enterprise, for example, is offering hourly rentals to help reduce urban congestion and is funding fossil fuel alternative research. Hertz has vapor recovery in 99 percent of its fleet, recycles its wash water and contracts only with vendors who recycle oil, Frissora said. Hertz also offers hourly rentals at three locations in Manhattan and plans to expand that, Frissora told BTN. He said Hertz has seen more environmental policy components in corporate requests for proposals.
"The corporate interest is much higher than we anticipated," Frissora said.
Avis Budget's Lambert said he would not be surprised to see hybrid rentals included on requests for proposals more regularly in the near future.
Part of the continued growth of these programs depends on the auto manufacturers and the type of hybrid and alternative-fuel cars they make available, Abrams said. Customers also must demonstrate the demand for the initial programs the car rental companies have put in place, he said.
"Now that the rental car companies are demonstrating their newfound awareness," Abrams said, "what remains to be seen is whether the consumers are willing to step up to the plate."