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4 September 2018 Interview

Gary Smith, Europcar

From car hire to “mobility solutions”. How Europcar is adapting to consumer needs

Europcar has been a car rental company for more than 50 years. But a strong track record stands for little when the way that people use your services, and those of your competitors, is changing – and changing fast. But for Gary Smith, the company’s UK Managing Director, it’s not just the speed at which you can respond that’s important. It’s about how you can also lead the way.

Challenged by the sharing economy – the rise in car sharing and ride hailing in particular – the Paris headquartered firm has made significant changes to its own business model over the past four years. And in May, as a sign of its commitment to that process, it changed its name from Europcar to Europcar Mobility Group. 

“It’s subtle,” says Smith. “But it tells the consumers what we are, where our focus is, and the fact that we now offer a wide range of mobility solutions, whether that’s ride hailing, car sharing, traditional rental or chauffeur services. We’re now much more than just a rental company.”

But rewind back to 2014 and the company hit the accelerator on its new journey by launching an innovation lab in Paris. Its mission, according to Smith, was to get people that weren’t busy doing the day job to try to understand the dynamics of what was happening in the market and the role that Europcar needed to play. It ran quick-to-market pilots to test theories and, importantly, failure was an accepted part of the process.         

It identified the differences between business and individual users, between the different generations and between those in urban and rural environments. It has helped to develop a portal through which business customers can keep tabs on their usage and the best ways to get from A to B. And it has pushed the business to offer a wider range of vehicles – including electric and hybrids, as well as petrol and diesel.

“We’ve even got some hydrogen fuel cell vehicles on the UK fleet just to cater for all the potential needs that our customers may have,” says Smith. 

Fleet of foot

“The pace of change in mobility is going to be fast. And we’re going to see significant change over the next 10 years, as we have done over the last 10,” Smith continues. “We have got to try numerous ways to understand what the right products are to be making available. We’ve done that through the Europcar lab in terms of innovation.

“Equally it makes sense to take advantage of some more established, albeit relatively young businesses that have already done a lot of the in-depth thinking and have been operating for a couple of years.”

So in 2015 Europcar bought two car-sharing companies – including E-Car, a London-based electric car-sharing business. What it learnt from those has prompted further car-sharing acquisitions on the Continent. Plus it is testing the waters for a business model in which Europcar wouldn’t even own the cars, with a significant investment in Dutch peer-to-peer car sharing service SnappCar.

In 2016, Europcar also bought Brunel, a London-based chauffeur services company.

“We’re now starting to see that evolve quite significantly, from what was just a chauffeur drive operation into a ride-hailing one,” Smith says, adding that its focus is on business customers, rather than consumers.

Ahead of our time

But while monitoring consumer and industry trends is taking Europcar down new avenues, in some instances, demand is yet to catch up.

“We launched some electric vehicles (EVs) for rent in London two or three years ago, and really there’s been limited demand,” says Smith.

Hybrids, of which Europcar has 1,000 on its UK fleet, are much more successful – as people can use them as they would a normal vehicle. But continued range anxiety for EVs, and a lack of charging infrastructure leads Smith to the conclusion that “the UK isn’t ready yet” for the conventional rental of these vehicles.

Smith approves of the aspirations of the government’s recent “Road to Zero” Strategy. “We all buy into having zero emissions by 2050,” he adds. “But there are a lot of practical aspects to be worked out about how we move from A to B, and that’s where business professionals can really have a role to play.”

Within the company, that’s meant looking at how Europcar can reduce its own emissions and provide its mobility solutions “in the cleanest way we can”.

Externally, Smith is keen to do his bit to promote the vehicles, and ways in which they can become a more viable choice.

Dispelling myths

Last October, Europcar ran a roadshow with joint government and car industry campaign Go Ultra Low in Manchester. The day was supported by both the City Council and Transport for Greater Manchester and offered local residents and businesses the chance to test drive the newest electric cars on the market.

“We wanted to dispel the myths about electric motoring, so we got people to see the cars, talk with the manufacturers, and do a number of test drives,” he explains. “The common theme that came back from the test drive is how like a normal car it is.”

Europcar is currently looking to roll out the roadshow to other areas, provided it gets the right support from the local authorities.

From Smith’s point of view quickening the pace towards lower emissions is very much about the right people having the right conversations – and all parties being open to those with different expertise.

But he also argues that government needs to improve its vehicle taxation policy to improve consumer take-up of low-emission vehicles. With the average age of the cars on his books sitting at six months old, his business and others like it can adapt quickly as soon as demand picks up.  

And that would add a very significant piece to the puzzle of what the future could look like for mobility – and for Europcar, as its business continues to evolve.     

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