HRG's consulting division has launched a suite of car rental analytical and sourcing tools to help in what it called a growing area of expenditure for clients. Although HRG reckons car rental accounts on average for only 2 percent of corporate travel expenditure, it expects these costs to rise, especially in Europe, because car rental is gaining in popularity at the expense both of in-house fleets and private vehicles.
HRG said rental is becoming an attractive alternative to leasing because of high fleet costs. Meanwhile, using private vehicles is losing popularity in the United Kingdom in particular, due not only to the British government's increasing taxation on corporate mileage allowances, but also a new duty of care law. Companies are reviewing their travel programs to ensure compliance with the Corporate Manslaughter and Corporate Homicide Act, which comes into force this April. The legislation, intended to make it easier to prosecute companies for gross oversights in health and safety practices that lead to fatalities, likely will shift business travel from private to rental cars to transfer liability to rental companies for vehicle maintenance and oversight of drivers' insurance and licensing.
HRG Consulting is launching a bid-analysis tool that factors in not only the daily rate but also rental company fees for extras, such as collection and delivery charges, surcharges for young drivers and fuel. "We looked at refueling charges for one client and it added up to several hundreds of thousands of euros," said Ian Flint, head of global consultancy for HRG Consulting. "Some of its executives will always be in too much of a hurry to fill up their vehicles, but if it could be reduced by a certain percentage, there are savings to be had."
Flint said companies are more reluctant to commit money for consulting on car rental than they might for air, because the lower volumes involved are perceived to make the return on investment marginal. Flint said HRG's new tools automate the process sufficiently to lower transaction fees and make the investment worthwhile.
"Daily rates, especially in the United States, are still highly competitive," according to Flint, "but additional costs are growing on both sides of the Atlantic."
Travel management companies are taking an increasing interest in car rental. Last year, Carlson Wagonlit Travel launched a ground transportation practice that also covers limousines and rail
(BTNonline, July 23, 2007).