Fleet News Award winner: Environmental Award - Hertz

Competition for Fleet News Awards is usually fierce, but perhaps none more so than the Environmental Award.

It is open to the whole supplier sector and recognises the fleet industry’s commitment to reducing its impact on the environment.

The judges look for clear evidence of work to create services that help fleets reduce their impact on the environment, or specific partnerships with individual fleet operators on successful programmes that have helped drive forward green innovation in the industry.

Given that for many years the environment has been a key component that touches so many areas of how organisations do business, and can be a key factor in how they attract customers alongside traditional factors of cost, value and ability, it can be tough to stand out.

Hertz was able to demonstrate that environmental considerations run throughout its operation, allowing customers to make greener choices while reducing its own impact on the planet.

It has expanded its car sharing business, added new low-emission vehicles to the Hertz Green Collection, used technology to help clients improve management and measurement of CO2 emissions, developed new products and cut back on its own energy use.

Hertz launched the first carbon neutral car club in the UK with BP by committing to buy carbon offset certificates through BP’s TargetNeutral programme.

It offers both corporate and retail customers a number of options when it comes to renting electric vehicles, including its Electric Car Club in Camden, and its electric car pool fleet launched with PricewaterhouseCoopers.

PWC needs to replace two taxi journeys a day or one traditional vehicle rental to pay for the electric vehicles.

Hertz offers electric bike rental in London and other European cities, while Hertz On Demand offers a membership-based pay-as-you-go rental service.

For Hertz UK’s general manager Neil Cunningham, the environment and sustainability has become part of the company’s culture.

Fleet News: How much are environmental issues driven by customer demand and how much comes from within your own organisation?

Neil Cunningham: It’s on our agenda almost daily. When something comes up in our business, our customers’ businesses or a new corporate policy, there are issues or challenges around sustainability that arise.

Legislation has also helped keep it in people’s minds, and vehicle tax linked to emissions helps keep it at the forefront.

Robust P11D reporting has also had an impact because companies are obliged to keep records of hire vehicles used longer than a few days.

FN: Does it mean the drivers are less attracted to the more expensive, and perhaps thirstier, vehicles?

NC: Drivers don’t want to be in high-emission gas-guzzlers. Our fleet represents typical user-chooser fleets. People are now more cost conscious, more tax conscious and more fuel economy conscious.

I was at Heathrow Airport this morning and customers are now cautious about the type of vehicle they are offered when they get an upgrade.

This applies even for commercial vehicles when customers may be offered a Luton van instead of a panel van.

FN: Some of the feedback we have received from fleet operators over the past couple of years has suggested that their own environmental agenda has had to take a back seat as they focus on cutting costs to ensure they survive the recession. How can offering ‘greener’ products and services still be a powerful marketing tool?

NC: A recession can be a good thing for the sustainability agenda. The general drive for low emission cars ticks a whole series of boxes, and the Hertz on Demand car club product allows clients to have multiple pool fleet solutions if they like.

Although some companies have scaled back on things like pool vehicles during the recession, some organisations must still have them.

Heathrow has replaced 12 lease cars with a nine-strong Hertz on Demand hire fleet. They also had the opportunity to specify low emission cars and it has worked really well for them.

FN: Hertz has been at the forefront of offering customers the choice of an electric vehicle. Is renting an electric vehicle a better option for fleets than taking on ownership of one?

NC: Electric cars have an advantage currently for BIK tax and can be perfectly serviceable vehicles for many drivers. Charges for rental vehicles come from the relatively high holding costs, although they can have low operating costs.

Travelling 500 miles in an electric vehicle isn’t possible in one day. But it might cost £1 to travel 90 miles in one.

For a conventional car, 90 miles might cost £15 in fuel, so even if the electric vehicle costs £14 more to rent, the cost to the customer is the same.

But if consumers see an electric vehicle with a higher rental rate than an internal combustion engine vehicle it appears less attractive.
 

FN: How much harder does this make it for people to see the benefits of using an electric vehicle on rental?

NC: There are other advantages, such as the exemption of the London congestion charge and there might be other incentives in some areas such as free parking.

We offer the Vauxhall Ampera through Hertz on Demand and we have one out on long-term rental. It’s still quite niche and will be until purchase prices come down or there is an improvement in residual values.

FN: What are the biggest challenges for vehicle rental companies when it comes to environmental issues and sustainability?

NC: With most rental companies the age of the fleet leads to challenges for tyres and recycling oil and various other issues that crop up after a year.

But there are other issues to consider beyond the vehicles themselves. If you look at some of our locations we’ve installed more energy efficient lightbulbs and for things like that there is immediate payback.

We also recycle waste water and use it for car washing. This also came to the fore more recently, as when it looked like the hosepipe ban might potentially lead to a ban on car washes being used we had to investigate alternatives.

Hertz was an official partner at Wimbledon this year and our vehicles were used for transporting officials. We looked at using waterless car washing, which reduced waste water.

It’s a very effective and very environmentally sound way of operating, as we don’t have to move vehicles to the car wash.

As legislation has helped shape the green agenda for fleets, Cunningham believes legislation will also form the basis of future challenges for the rental industry and continued success will depend on its ability to adapt quickly to the needs of customers.

In rising to the top of the list of contenders for the 2012 Fleet News Environmental Award. Hertz has demonstrated it is not just well prepared to meet customer requirements, but also to anticipate and innovate to ensure it succeeds.