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Preparing for the green car rental revolution

Preparing for the green car rental revolution

Green Motion CEO Richard Lowden featured in an exclusive interview with Fleet Europe magazine covering the future of car rental and mobility as a service this week - click here to read the full article.

Embracing cutting edge software and systems has enabled low CO2 car hire company Green Motion to take on the established daily rental giants in more than 40 countries worldwide, and the evolution of this industry is about to accelerate, says CEO Richard Lowden

Fleet Europe: Who is Green Motion?

Richard Lowden: We were established in the UK in 2007 with a clear plan to offer low CO2 rental vehicles to increasingly environmentally aware consumers. From the outset, we have always been technologically driven, continually investing in the latest software and systems to keep us agile and innovative.

FE: And how many countries do you operate in today?

RL: Our investment in XML-based software means we have been very successful at plugging into the Online Travel Agencies and price comparison websites and we can get a new franchise office up and running and taking bookings very quickly anywhere in the world. We now have representation in 29 European countries with an expanding global footprint of 400 locations in more than 40 countries. Our fleet size varies according to the season, but our peak summer fleet hit around 45,000 vehicles this year and we are looking at 25-30% growth next year.

FE: What proportion of your business is corporate rental?

RL: There’s a real blurring between retail and corporate, which is down to the evolution of the low cost market to the extent that business users now know that they can get a better rate through a price comparison website than they can through a corporate travel agent. When we first set up Green Motion, we were almost exclusively targeting corporates and SMEs looking to reduce their carbon footprint, but as time went on, through our embrace of online systems, we very quickly found ourselves on a number of emerging price comparison sites, so we’ve exploited that to expand our retail offer very, very quickly.

FE: How green is Green Motion and what about the future of alternative powertrains in your fleet?

RL: We have been running low emission vehicles from the outset to differentiate us from the established players, but it was the explosion in demand for hybrid vehicles in places like California that really drove the uptake of hybrid and electric technology.

Back then, the choice of hybrid vehicles was limited to the Toyota Prius and one or two rivals, but in recent years, the options have increased dramatically and that process is about to accelerate.

The increase in sales volume drove process down and now we have reached the point where green technology isn’t just about saving the planet – it is actually a lower cost solution to the mainstream alternatives.

We’re expecting our fleet to be around 20-25% pure electric by 2022, but electric vehicles are just the start of major disruption in the rental sector over the next five to seven years. Autonomous vehicles are here and now and they will enter the mainstream quicker than anyone believes. Their impact will be seismic. Increasingly, the question isn’t just: will the vehicles be electric; it’s: will our customers actually be driving them? We’ve been developing a business model that future-proofs us for the move into autonomous vehicles so the key question for us is: does a rental vehicle in 2025 look like a conventional car, or is it going to be a self-driving unit?

FE: How do you go about charging for additional services, for example charging services or roadside assistance?

RL: We’ve had some bad press about excess charges recently so we have moved to redefine honesty and transparency in the rental industry. From December 2018, we are quoting four price points with what’s included clearly indicated: Basic, Plus+, Premium and Premium Plus+. At the Basic end of the spectrum, there’s a mileage limit, high excess and high deposit. At the other end of the spectrum, the daily rate is much higher, but pretty much everything is included.

In terms of roadside recovery, every car we operate in the UK has got full 24/7 recovery and replacement car service – we don’t try to unbundle that from our rental package.

When it comes to charging electric vehicles, we are not planning on passing on a recharge fee to the customer. The rapid chargers we are currently installing in the network can replenish the battery to 80% in under an hour and the energy cost is so low that it will be bundled into the rental fee.

FE: How do you see the evolution to Mobility as a Service (MaaS) and what will be the role of Green Motion in MaaS?

RL: Renting a car anywhere in the world at the moment is a fairly frictionful process – even for business users with corporate accounts. For consumers, it’s even less convenient. This doesn’t make car rental an attractive component in the Mobility as a Service market. The future benchmark we have set for ourselves is Über because it’s completely frictionless – both for consumers in terms of convenience and business users in terms of reporting and accounting. The direction of travel in the car rental space/MaaS space is a very different landscape than the one we are looking at now. There are so many new entrants coming into this space that we either have to develop and evolve, because if we stand still, we will not be a player.

FE: What kind of services do you have, specifically for business customers?

RL: Our franchise structure means that we are essentially a small but very agile company which can adopt new technology very quickly. But we have another advantage in that we operate under a single unified software system worldwide. So from February 2019, we will be rolling out an app-based booking system which – once they are registered – will allow customers to reserve a vehicle and gain access to it via their mobile phone. This means there’s no need for the customer to check in or check out at the office and it will also allow corporate customers to arrange delivery at short notice and bring their rental to an end remotely via the app. And if the future is autonomous, this is the first step towards providing keyless access to a chauffeured service which delivers the car to the end user irrespective of whether they want to drive it themselves or, indeed, be driven.

Author: Mark Sutcliffe