Hertz targets car sharing as rental volumes contract
Sun 14 December 2008
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A leading car rental company, Hertz, has announced that it will roll-out its new car-share programme in December, starting with New York, London and Paris. In the UK this will mean competing with independent operators such as City Car Club, Streetcar and Zipcar.
Car club members typically pay an annual fee which gives them access to cars which can be rented by the hour. The concept has been enjoying rapid growth in the UK in recent years and now has approximately 60,000 users, particularly prompted by the increase in car taxes, fuel costs and parking fees. Meanwhile, demand for traditional car rentals has declined. Unlike other car clubs, Hertz "Connect" club is focusing more on the cost of car ownership, hoping to attract families and others who are economising during a recession.
"It's an alternative to car ownership; for us it's a great growth opportunity" said president of Hertz Europe, Michel Taride. The Director General of the British Vehicle Rental and Leasing Association (BVRLA) and LowCVP Board member, John Lewis, added: "Car clubs appeal to urbanites who still need to use a car, but don't want the hassle of owning one. Rental companies have an existing fleet of vehicles, so it is just a case of making it even more flexible and convenient to use them."
Hertz indicated that it has already begun keeping cars for longer than the six to eight months that were normal in the past. Under the new car club model, at the end of its life in the car rental business Hertz would move the vehicle to its car sharing service for another six months or a year. Hertz also claims it is able to use its existing infrastructure of call centres, relationships with car manufacturers, insurers and marketing partners, to grow quickly.
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