Car clubs target the public sector

Consolidation in the car club sector has begun in earnest, as companies begin jostling for position in the corporate sector.

Billed as the low-cost, low-risk and low-carbon option, car clubs see significant potential for fleet growth despite a recent report showing that companies are ignoring their benefits (Fleet News, March 18).

US-based Zipcar, which has sites in London, has acquired Streetcar, one of the UK’s biggest car clubs with a fleet of 1,400 vehicles operating out of eight cities. It has 75,000 members, of which 6,000 are corporates.

Streetcar will be rebranded as Zipcar and will now start offering a greater range of hybrid cars to fleet and retail customers.

Brett Akker, co-founder of Streetcar, said: “Our business membership is growing fast, with 20% of all new members signing up as business members. Streetcar can help organisations optimise their transport usage by cutting the overheads of maintaining pool cars and only paying when they need a vehicle.”

He says the company plans to expand coverage to include Bristol, Glasgow and Edinburgh.

James Finlayson, managing director of City Car Club, which acquired WhizzGo last year, said: “Car club membership offers businesses a cost effective and greener alternative to running a fleet of pool cars and paying employees’ mileage expenses for using their own cars.

“It also removes many of the duty-of-care issues associated with grey fleet vehicles and pool cars, with the car club operator responsible for vehicle maintenance and insurance.”

City Car Club has more than 500 cars in 13 cities across the UK and says 40% (8,000) of its members come from the corporate sector.

As with many car clubs, members can book a car for as little as 30 minutes, accessing the vehicle via a smart-card before entering a personal identification number into the in-car computer.

It has seen a 90% growth in membership in the past year and has set aside £1.8 million towards a 50% expansion of its fleet by 2011.

“A large reason for our growth has come from demand from business,” explained Finlayson.

Surrey County Council’s Travelchoice team linked up with Streetcar for a cost reduction of 26% per mile driven by the local authority.

“It helped us reduce transport costs and encourages our staff to walk to work or use public transport in the knowledge they have access to a car for business purposes,” said Kay Hammond, Surrey County Council’s member for community safety.

“This is helping us reduce our carbon footprint and ease traffic congestion.”

Paul Balmont, managing director of Commonwheels, says around 25% of its 700 members come from the corporate sector.

“Businesses have had to change the way their staff travel to tackle climate change and congestion, while the liability of grey fleets is becoming an issue which is motivating businesses to change behaviour,” he said.

The UK car club charity Carplus has announced a series of seminars aimed at promoting the concept to business users.

According to its annual survey, car clubs operate out of 46 UK locations, with a combined membership of more than 112,000.

Case study: Leeds City Council

Employees at Leeds City Council were signed up as corporate members in 2004 when WhizzGo (now part of City Car Club) began operating in the city.

“It gives us practicality without having to run pool cars,” explained Tim Draper, senior road safety officer at Leeds City Council.

“We use public transport where possible but at certain times – when carrying equipment and going to meetings at short notice – using a City Car Club car makes good sense.

"If I had to go to a meeting at work in the past, I might have considered driving into Leeds and using my own car but now I don’t have to.”

Research has shown the council is saving £60 per member of staff each year.

“There is an added benefit of having detailed information on car club usage, which helps with monitoring costs and CO2 emissions,” added Leeds City Council travel behaviour team leader Ray Hill.