Fleets in focus: Addison Lee

Rob Daniels is no stranger to fleet mergers.

In his 10 years running the Addison Lee fleet, London’s largest minicab company, there have been a number of acquisitions.
The latest – the passenger car division of Lewis Day, which took place last November – is the largest to date and saw the fleet swell from 3,500 vehicles to 4,500 on the day of purchase.

Daniels’s priority now is to understand, absorb and streamline the new vehicle fleet.

The fleet is owned by Addison Lee’s sister company Eventech (see ‘The business structure’ panel overleaf), which buys the vehicles using asset finance.

It acts as a leasing company, renting vehicles to individual taxi drivers. Daniels, who is Eventech’s fleet manager, is responsible for buying, maintaining and selling the vehicles for Addison Lee.

A key factor in the efficient running of the Addison Lee fleet is its policy of operating a standard fleet car – the Ford Galaxy – while its VIP fleet consists of Mercedes-Benz E-Class and S-Class vehicles.

The commercial fleet is made up of Ford Transits.

Part of Lewis Day’s attraction was that it, too, ran Ford Galaxy and Mercedes-Benz cars for its chauffeur business.

“It has been a large contributor to Addison Lee’s brand identity,” says Liam Griffin, managing director of Addison Lee.

“You know the vehicle type you’re going to get when you order an Addison Lee car.”

The acquisition also added 250 Toyota Prius cars to the fleet, enabling Addison Lee to claim the largest Prius fleet of any private hire company and enabling it to offer a hybrid option to clients for the first time.

According to Daniels, the first step following an acquisition is to understand the new fleet – the exact volume of vehicles, whether they are with the driver, if they are roadworthy and the funding method.

“Most of the fleets we have acquired have had a combination of outright-purchased and leased vehicles,” he says.

“We find out which are leased and over a period of time we return those vehicles to the leasing company and replace them with our own vehicles.”

Daniels is taking this approach with the Lewis Day vehicles and has already returned 40-50% of the leased vehicles.

Some vehicles were accident-damaged while others have been “sold off because they were sitting round with damaged engines”. This has reduced the fleet slightly to 4,233 vehicles.

So why does Daniels favour outright purchase over contract hire?

“You have full control of the vehicle,” he says. “You can decide to sell that vehicle early or maybe run it slightly longer.

"There are no hidden costs such as excess mileage charges or damage charges.

"Every time we return vehicles to leasing companies there is always a wheel that is scuffed that wants repairing.

"By outright purchasing you don’t incur those charges.”

Streamlining has already taken place post-acquisition.

Addison Lee has closed Lewis Day’s workshops as Daniels already runs three – one at Addison Lee’s head office near Euston, where warranty work is carried out, and two others at Spring Place in Kentish Town, where vehicles are serviced.