Hourly rentals displace company cars

Businesses are increasingly adopting car sharing as a cost-saving alternative for employee travel. Workers can step outside their company's front door and into a car they can drive to a business meeting or sales call, and — during breaks or lunch hour — use for errands or shopping.

For companies, car sharing is a way to reduce rental costs, fleet size or use of car livery services. The hourly rentals, with gas, insurance and parking included, can also help businesses bolster their green credentials by offering hybrids as well as electric plug-in cars.

Hill Holliday, an advertising company based in Boston, switched last year to Zipcar, the pioneer of per-trip rentals in the United States, to trim costs and give its employees flexibility, said Michael Sheehan, Hill Holliday's chief executive.

''We have people going places all the time, using taxis, rental cars or car services," Sheehan said. "We still use these, but for clients outside of Boston, our employees can use a Zipcar at a fraction of the normal rental cost."

Steve Kauffman, a senior vice president for strategic planning at Hill Holliday, drives a Zipcar to one of the agency's clients, Dunkin' Donuts, at an office 25 minutes southwest of Boston. Before the agency signed up with Zipcar, employees scheduled a shared minivan to travel to outlying clients.


''Now, when clients want me to stick around an extra five or 10 minutes, or want to talk about something else, I can spend that time without any worries," Kauffman said. "I just punch in my cell phone or computer to extend my usage. This gives me a lot of flexibility."

The average employee of the agency uses a Zipcar about 180 times a year, the company has calculated, or about 3.5 times a week. The company concluded that it was spending $6,500 annually per employee for Zipcar versus the $43,000 per employee each year for a car-and-driver service.

Zipcar, in Cambridge, Mass., has been wooing corporate customers to expand its 400,000-client list. Zipcar has signed up 10,000 company clients under its Zipcar for Business program, said Scott Griffith, the company's chief executive.

"The downturn in the economy has encouraged smaller businesses, in particular, to look for ways to save money," he said. Car sharing, he said, also simplifies billing and employee reimbursements and eliminates costly servicing and refueling.

Employees reserve online, unlock the door with a programmed card and drive away. Car-sharing costs run from $5 an hour for a small car to $17 for vehicles like a BMW sedan. Companies and their workers, even on personal errands, typically pay the same hourly rate. And these per-trip renters avoid lines, lengthy contracts and confusing insurance options at the auto rental counter.

Big-name rental giants like Hertz and Enterprise, as well as U-Haul Truck Rental, are now offering their own self-service programs. Connect by Hertz last year signed up the insurance and financial services giant USAA and Marriott International for car sharing.

Google offers Enterprise's WeCar auto-sharing program at its headquarters for business travel or personal use and plans next year to add five more cars to its existing 30 hybrids. Recreational Equipment Inc. in Seattle also offers car sharing.

Hertz is tapping its list of corporate rental customers for Connect by Hertz, and Robert J. Stuart, its senior vice president for global sales, said it had signed up 50 companies in 24 states since the program began in December 2008.


''We're starting to see more traction from companies who see this as part of their green initiatives, and as a pretty nice benefit for employees," he said.

Hertz and Zipcar also have fleet management software for corporations to track and maintain their vehicle pools. Zipcar's is called FastFleet, and Hertz's is called Connect to Go. Stuart said the software pinpointed a vehicle's location, when it needed to be serviced and when fuel should be added.

One issue that could affect Zipcar's future is that it is not currently at airports. Julian Espiritu, managing director of Abrams CarSharing Advisors in Purchase, N.Y., said that large companies "like the economic benefits, and love the environmental aspect, but they are concerned about coverage at airports where their sales forces travel." But, he predicted, "soon you will find car sharing at airports, and the whole car rental industry will shift to this model."

How or even whether that will affect Zipcar's corporate market share is yet to be known. Zipcar has 500,000 members in 13 cities (and 225 college campuses) in the United States. Zipcar, which has 8,000 vehicles, took in $130 million in revenue last year but has not turned an annual profit since its founding in 2000 because of the high costs of expanding to new locations.

USAA, based in San Antonio, provides rides for employees facing emergencies, but not for personal chores. Instead, the company's Connect by Hertz pilot program offers its 14,000 employees the use of three Toyota Priuses at its suburban parking lot for $5 an hour.

''I head out at lunch to run errands," said Janelle Dziuk, a manager in the products and services innovation department.

With the new Connect cars available, Dziuk said, she has taken a half-dozen excursions. But she noted: "I will be in the car a lot more when it comes closer to Christmas. I can get a lot more shopping done, and be more productive at work."

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