Auto Rental News 2011 Handbook by Kelly Bracken

THE

STEP-BY-STEP GUIDES TO: ACQUIRE AN AUTO RENTAL COMPANY EFFECT LEGISLATIVE CHANGE RENT ELECTRIC VEHICLES COACH THE FRONTLINE

READERS CHOOSE FAVORITE RENTAL CAR OF ALL TIME!

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table of contents 2011 Handbook • Volume 24, No. 2

6 THE HOW– TO ISSUE

Step-by-step Guides to: 6

Acquire an Auto Rental Company Are you ready to expand? Buying out another rental company can be a quicker path to new revenue than opening up a brand new store—if you can avoid the pitfalls going in.

10 Increase Sales Conversions with Language Techniques Motivating your frontline sales team to use active, service-based language during the rental process will boost your bottom line.

12 Determine if EVs Are Right for Your Fleet First adopters will gain free publicity and a high rental rate. But with uncertain resale values, range issues and limited initial availability, the decision to acquire electric vehicles for your rental fleet is not to be taken lightly.

DEPARTMENTS 4

DTAG and Avis Budget Group Provide FTC Update ● Business Travel Spending to Grow in 2011 ●

17 Effect Legislative Change Between your state and local representatives, Chamber of Commerce and industry associations, you have the power to shape legislation that will directly affect your business.

BONUS! 20 Readers Choose Favorite Rental Car We asked ARN readers to choose their favorite rental car of all time and tell us why. Toyota Camry tops the list.

Industry News

Product and Vendor News ●

25 28

Learn more about these products at the Car Rental Show!

Ad Index RentAlert ●

Keynote speaker presentations announced for the 2011 Car Rental Show.

On the Cover: ©istockphoto.com/evirgen

AUTO RENTAL NEWS (ISSN 1075-9409) (USPS 011-305) (CDN IPM# 40013413) is published bimonthly with additional issues in February and December, by Bobit Business Media, 3520 Challenger Street,Torrance, California 90503-1640. PERIODICALS POSTAGE PAID at Torrance, California 90503-9998 and additional mailing offices. POSTMASTER: Send address changes to Auto Rental News, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks for address changes to take effect. Subscription Prices - United States $25 per year; Canada $30 per year; Foreign $75 per year. Single copy price - $10; Fact Book - $30. Please allow 6 to 8 weeks to receive your first issue. Bobit Business Media reserves the right to refuse non-qualified subscriptions. Please address Editorial and Advertising correspondence to the Executive Offices at 3520 Challenger Street, Torrance, California 90503-1640.The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. Printed in USA

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industry news DTAG and Avis Budget Group Provide FTC Update Dollar Thrifty Automotive Group Inc. and Avis Budget Group Inc. released a joint statement on Jan. 11, regarding their attempt to achieve antitrust approval from the Federal Trade Commission. “Avis Budget and Dollar Thrifty believe substantial progress has been made in the discussions with the FTC on these issues, but the FTC’s position with respect to the competitive issues remains uncertain,” the companies said in the statement. The two companies said they have told the FTC a potential

acquisition of Dollar Thrifty by Avis Budget would not reduce competition in the rental car industry. They also said a merger would result in significant cost savings and operational efficiencies, which would benefit all rental car customers, particularly Dollar Thrifty’s core leisure customers. The two companies said they expect an official decision from the FTC by the end of March or early April. They also reiterated in the statement that they have not made any agreements with respect to any merger or other business combination.

NBTA: Business Travel Spending to Grow in 2011 Business travel spending, a key indicator of the overall health of the U.S. economy, is expected to advance by 5 percent in 2011, according to the National Business Travel Association (NBTA). The association also estimated that overall growth of business travel spending in 2010 reached 2.3 percent, a sharp contrast from the 14.1 percent drop reported in 2009. “Based on the way 2010 began, the year wrapped up better than expected thanks to a number of factors, including higher than expected GDP, stronger exports and very strong corporate profits. These trends are translating into greater business travel spending as companies invest in travel to drive revenues and compete aggressively in a recovering economic environment,” said Michael W. McCormick, NBTA executive director and COO. The NBTA forecasted that outbound U.S. international business travel spending grew 16.9 percent in 2010, an improvement from the 32.1 percent decline recorded in 2009. International spending is expected to increase more modestly in 2011 — 3.2 percent — as a result of a weakening dollar. The NBTA said group travel flattened out in 2010, but will recover in 2011 with a projected growth rate of 5.5 percent for trips and 3.2 percent for spending.

Enterprise Rent-A-Car to Offer Chevrolet Volt Enterprise Rent-A-Car said in January that it will begin offering Chevrolet Volt extendedrange electric vehicles (EVs) for daily and weekly rentals. The Volt will be available at the Mark Christopher Auto Center in Ontario, Calif., along with a new charging station. Enterprise said additional EVs will be offered at other Enterprise locations as manufacturers make them available. The company said 500 Nissan LEAFs will be available at select Enterprise locations nationwide, and on-site charging stations will be installed to support the vehicles. “By embracing new, clean fuel and engine technologies like electric vehicles, Enterprise can help the passenger vehicle remain relevant by giving alternatives a chance to become commercially successful,” said Lee Broughton, director of sustainability for Enterprise Holdings.

NBTA U.S. BUSINESS TRAVEL OUTLOOK U.S. Domestic plus International Outbound

Yr-to-Yr % Change 2012

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

2007

2008

2009

2010

2011

2012

■ TOTAL U.S. BUSINESS TRAVEL TRIPS ■ TOTAL U.S. BUSINESS TRAVEL SPENDING

The National Business Travel Association forecasts that total U.S. business travel trips and spending will increase in 2011.

FOR THE RECORD Auto Rental News incorrectly stated in the 2011 Fact Book issue that Enterprise had a score of 766 in J.D. Power and Associates’ 2010 Rental Car Satisfaction Index Study. The correct score is 786, the highest of the 2011 survey.

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industry news ALG: High Rental Fleet Sales Still Damaging Residual Values Rental fleet sales improved in 2010, but have negatively impacted both the residual performance and perception of quality for certain vehicle brands, according to the Automotive Lease Guide (ALG). Rental fleet penetration (RFP) is ALG’s measure of the total number of vehicles sold into rental fleet channels divided by total vehicle sales. RFP for the industry increased from 11 percent in 2009 to 13 percent in 2010, resulting in an increase to ALG’s used supply forecast. ALG said it recommends RFP levels below 10 percent for mainstream brands and less than 5 percent for luxury brands to avoid any negative impact from rental fleet sales on residual performance. Chrysler showed the highest increase in RFP with 49 percent in 2010 compared to 19 percent in 2009. The Dodge and Jeep brands also showed year-over-year increases in RFP with levels at 32 percent and 18 percent for 2010, respectively. ALG said the increase in RFP will negate much of the used supply impact on residual values due to the decline in perceived quality and residual performance relative to the competitors. ALG said that rental fleet sales have an even more detrimental effect on residual values and perceived quality for luxury brands compared to mainstream brands. Cadillac showed the highest year-over-year increase in RFP, jumping from 9 percent in 2009 to 17 percent for 2010. ALG believes the increase in RFP will place Cadillac at a disadvantage compared to

other luxury brands. Other luxury brands had small changes to RFP levels and averaged less than 5 percent for both 2009 and 2010. Both the mainstream and luxury domestic brands showed higher rental fleet trends versus their import counterparts, ALG said.

LARGEST INCREASE IN RENTAL FLEET PENETRATION FOR MAINSTREAM SECTOR, 2010 VS 2009 BRAND

RANK

2010 YTD RFP

INCREASE IN RFP YOY

CHRYSLER

49%

+30.3 PPTS

DODGE JEEP CHEVROLET MERCURY AVERAGE

2 3 4 5

32% 18% 26% 36% 17%

+19.8 PPTS +13.6 PPTS +12.7 PPTS +11.7 PPTS +4.6 PPTS

LARGEST INCREASE IN RENTAL FLEET PENETRATION FOR LUXURY SECTOR, 2010 VS 2009 BRAND

RANK

2010 YTD RFP

INCREASE IN RFP YOY

CADILLAC

17%

+7.6 PPTS

JAGUAR PORSCHE LEXUS BMW AVERAGE

2 3 4 5

3% 1% 1% 1% 5%

+2.2 PPTS +0.7 PPTS +0.1 PPTS +0.1 PPTS +0.3 PPTS

Hertz Partners with Beverly Hills Rent A Car The Hertz Corporation and Beverly Hills Rent A Car, a provider of luxury and exotic vehicles in Southern California and Las Vegas, have partnered to provide Hertz customers with exotic car rentals. “High net worth individuals grew worldwide by more than 17 percent in 2009 and there’s growing interest in luxury travel. We’re confident our ability to offer customers exotic and luxurious car rentals in conjunction with Beverly Hills Rent A Car will be appreciated by high-end travelers who are seeking unique rental options while traveling,” said Mark P. Frissora, Hertz’s chairman and CEO. Beverly Hills Rent A Car’s selection of vehicles includes such exotic cars as the Ferrari 458 Italia, Porsche Panamera, Mercedes SLS and Rolls Royce Ghost. In addition, the company offers customers VIP pick up service at baggage claim, complimentary pick up service to and from each of its six Southern California and Las Vegas locations, and delivery to hotel, home or business. “Beverly Hills Rent A Car prides itself on providing its customers the best products and services in the exotic car rental market and we’re confident that working with Hertz will enhance our customers’ experience,” said John Vincent of Beverly Hills Rent A Car.

DTAG Implements No-smoking Policy for Rental Cars Dollar Thrifty Automotive Group Inc. has implemented a new policy prohibiting smoking by renters at all Dollar and Thrifty corporate stores and participating franchise locations in the United States. Renters who do not comply with the new policy and return vehicles after smoking may face a charge of up to $250. Rental cars that have been smoked in will be immediately grounded upon inspection and removed for a thorough detailing before being returned for customer use. All rental cars in Dollar and Thrifty fleets will display “No Smoking” stickers notifying renters of the potential charge for noncompliance. “We think it is important to follow suit with the rest of the U.S. travel industry’s non-smoking approach so that travelers always have a smoke-free means of transportation,” said Scott Thompson, Dollar Thrifty president and CEO.

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ACQU

HOW TO

Are you ready to expand? Buying out or merging with another rental company can be a quicker path to new revenue than opening up a brand new store— if you can avoid the pitfalls going in. BY JIM TENNANT

WHY TAKE OVER SOMEONE ELSE’S BUSINESS?

To get into a new geographic area. Opening a store from scratch in a new area can be very time consuming and costly. You need to find a suitable location that presents a good face to the public and has a place to clean and store your cars—not easy in some areas. You will need to spend money on leasehold improvements, signs, furniture and equipment, computers, etc. You may have to deal with zoning and licensing issues. You will need to hire and train employees or take them from your existing locations.

PHOTO: ©ISTOCKPHOTO.COM/RICARDOREITMEYER

ou can probably remember the days when there were eight separate, standalone national car rental companies. There are still eight separate brands visible to the public, but behind the back walls just four companies (as of this writing) own the eight brands. The companies have realized substantial savings through combined fleets, employees and support infrastructure, and have probably strengthened the industry by keeping the eight brands alive in the public’s eyes. Merging operations have worked for the large national companies. Can it also be a winning strategy for much smaller, local or regional companies? Can you strengthen your company and improve your bottom line by merging with or buying another car rental business?

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QUIRE

Jim Tennant and the Tennant Group Roundtable return to the Car Rental Show for a two-hour, pre-conference seminar (Tuesday, March 8, 10 am – noon).This year’s session will feature a confidential, one-on-one analysis of your company’s operating and financial data by an experienced, non-competing roundtable member. Free, pre-registration required.

AN AUTO RENTAL COMPANY The day you open, you will have zero business. You will face a long building process before the store is covering its overhead and putting money toward your bottom line. Is there an existing business in the prospective new area? Would it be better for you to take it over instead of starting from scratch? In the early days of our company, we operated a small location near San Francisco International Airport (SFO), and we had dreams of opening in downtown San Francisco, an area with great tourist and local business potential. It was probably not as difficult an area as Manhattan, but close. It was too much for our limited resources, so it did not happen for the first three or four years we were in business. One day we spotted a classified ad offering a small downtown car rental business for sale. We were able to buy it on good terms and instantly had a downtown location complete with parking, a wash bay and, most importantly, a steady stream of existing business.

To grow your business much faster than organic growth allows. The major companies realized significant savings by combining back room operations and fleet. Economies of scale exist in almost all businesses and a 20 to 30 percent or greater increase in your revenue might be much more valuable than the same revenue operated as a standalone business. Buying another business in your present area could make a lot of sense. You can expect that the combined businesses will lose some existing revenue to the competition in a merger, but handled correctly the loss can

Keep your eye on the local market and keep an open mind.Your competition is also a potential takeover target and there are many ways you can strengthen your operation by merging it with another.

Keep your eye on the local market and keep an open mind. Your competition is also a potential takeover target and there are many ways you can strengthen your operation by merging it with another.

be minimal. Additionally, under the right circumstances, you can capture new revenue from the merged company by offering a wider range of vehicles, newer vehicles or additional services, such as customer pickups from a wider area.

You might buy a business for any number of reasons, some of which are outlined above. However, when you buy it, you inherit certain things that you need to think about carefully.

To get into a new market segment. Have you wanted to offer luxury vehicles or large passenger vans? Have you been looking for a way to get business from a large corporate account or government business in your area? Like a new geographic area, you can enter these segments on your own and suffer the missteps and startup labor and costs that go with it. But what if there is a business already in that segment? Would it make sense to buy this business? Those business owners have already done the work and made the mistakes that you might make. When we bought the little downtown business, it not only had the steady stream of walk-in business because of its excellent location, the staff also had good contacts with hotels and local corporate accounts. We offered a wider range of newer and much nicer vehicles and were immediately able to increase this business.

WHAT DO YOU GET WHEN YOU BUY A BUSINESS?

Location. The physical location might be your main reason for buying or you may unwillingly acquire a location as part of the deal. If you plan to keep it, be sure you can. When we bought the downtown business, the sellers were on a month-to-month lease because they were not sure of the future of the business. Before committing to buy, we met with the landlord, who was delighted to have stable, experienced operators as tenants. We were able to lock up the location in a very favorable long-term lease. On the other hand, if you do not plan to keep a location, the cost of getting out of the lease, if any, is part of the acquisition cost of the business.

Employees. You may or may not want to keep the business’s existing employees. Our experience in taking over a number of businesses is mixed, to say the least. Some of the best and some of the worst employees have

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come from businesses we have taken over. When you take over a business, the seller should discharge all employees and take care of any sick time, vacation or other pay owed and any other commitments to the employees. You will start fresh. If you need employees, the previous employees are obviously a good source, but there are many potential pitfalls. Do not hire all the employees. If you took over the entire staff, employment regulations may view you as merely new owners of an existing business, and you would then be liable for their years of service and other employment obligations. The seller should first explicitly terminate the employees, and then you should have them apply, just as they were coming off the street. Plan on retraining and spending time orienting the new employees—you will have bad habits to break. If possible, move employees around so that old and new employees are working side by side. There are pitfalls, but the old staff knows the area, has a relationship with the customers and knows the market segments that are new to you. You’ll want to take advantage of this while not degrading your existing business.

With the recent turmoil in the industry, loss of financing, insurance or sources of affordable vehicles can all be great motivators for prospective sellers. For someone facing these types of issues, a potential buyer, willing and able to put together a fair deal, could be the best thing that ever happened to him or her.

Vehicles. It is difficult—if not impossible— to get out of vehicles in the middle of their lifecycle, so often the seller’s vehicles are a big part of the deal. When we bought the downtown business, the sellers were running older vehicles. We ordered additional vehicles, but they would not be delivered for a few weeks. The sellers were able to sell off some of their fleet immediately, but as part of the deal we leased the balance of their fleet at their carrying cost while they sold them off one or two at a time. It was a small price to pay to let them

get out cleanly and for us to have sufficient vehicles to keep the business running. We bought a much larger local company many years later and the vehicles were the major consideration. The seller’s vehicles were all financed through Ford Motor Credit, which was delighted to have our company, with its perfect history with Ford, take over the financing. We worked out an equitable arrangement to cover the difference between the amount owed and the actual value of the vehicles, taking into account that we would hold and sell the vehicles at the end of their normal life cycle. The seller’s vehicles will often be the most difficult part of the deal. It is important to understand the seller’s problems and then get creative in coming up with an equitable solution.

The Business Name. You will probably want to switch the new business to your name, unless the old name is better or has value itself. However, when you make the switch you should do it in such a way that you don’t lose the goodwill and existing business of the old name. Sometimes a gradual, two- or three-step conversion is best.

THE ACQUISITION CHECKLIST Before making an offer, go through this checklist: ● Price. What is the business worth to me? Everyone focuses on price and it is obviously important. But if the deal is right, price is just one part of it, and you can afford to pay a fair price. If the fit is wrong, you don’t want the business, even if it’s free. The most common valuation method is a multiple of adjusted earnings — net earnings before taxes, but with all the items extracted that are not really part of the business. This includes owners’ salaries greater than what you would pay an outside manager. It also includes family vehicles and other goodies that you draw from the business. A normal multiple would be three to five times, depending on the situation. ●

Employees and Management. Is your management strong enough to oversee a larger number of employees? Are you capable of running a larger company? How does your company handle change? In our experience, this is where you can go wrong most easily. It will be more difficult than you think. ● Financing and Cash Flow. You will need more vehicles, of course, but you also should anticipate increased operating cash needs during the takeover period — they will probably be greater than you think.

● Accounting and Computers. This is critical. You need computers up and running in all offices the day you take over. Be sure your accounting system can begin billing new customers immediately. ● Personal. At this point in your life, are you looking for new challenges or are you satisfied with the status quo? This should be the last question you ask just before you make an offer, but it is perhaps first in importance.You will be leading your company into new territory and you need to be sure! ● The Transition. The best deal can be made much worse by poor planning and execution of the takeover. Who gets the revenue from cars on rent on the takeover date? Who is responsible for damage and third-party claims on vehicles on rent at takeover? What is the procedure for receivables during the transition? How will you handle the announcement to the employees, existing customers, vendors and the public? All these and many more questions should be addressed as part of the agreement, but some details will be missed. Trust and the ability to compromise will be necessary.

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The seller has to give up all rights to the name. Usually, the seller can assign the county fictitious name registration to you, and if he holds a state or federal trademark, it must be assigned as well.

sues, a potential buyer, willing and able to put together a fair deal, could be the best thing that ever happened to him or her. Don’t think that you are unfairly taking advantage of a bad situation.

HOW DO I APPROACH A DEAL?

Other Assets. Computers, furniture, counters, office equipment, shop equipment and other assets have little market value but can be quite valuable to you because they are expensive to replace. Each situation will vary, but these items should be addressed as part of the deal.

WHO ARE POTENTIAL TAKEOVER CANDIDATES? Supposedly everybody has his or her price, but a young, vigorous owner, making consistently high profits with no need to finance, and who is self-insured and has no personal or family issues will have a much higher price. Good candidates are veteran owners, especially if they do not have anyone in the next generation willing or capable of taking over. With the recent turmoil in the industry, loss of financing, insurance or sources of affordable vehicles can all be great motivators for prospective sellers. Divorce, death of a family member, health or other personal issues could play a role as well. Keeping your eyes open for any of these potential candidates could pay back in a big way. For someone facing these types of is-

In our experience, trust is the first and most important key to putting together a deal. Some are good at playing business hardball, but that is not our style. A low-key, win-win approach has worked well for us. Get involved with the business’s advisors early on. Accountants and attorneys often have a more realistic and less emotional view of the business than the owner, but that will not always be true.

Ask questions and listen. Ask all the questions you can at this point. What is the seller’s motivation? What are his problems? What does she really need? How are vehicles financed? How much equity is there in the vehicles or how much are they upside down? What debts are personally guaranteed? What are the terms of the location leases? What are the seller’s plans after the sale? Does he or she want to retire and travel? Would he or she want a role in the company for a while?

Know your benefit. Ask yourself these questions. What will buying the business do for you? Are there economies of scale? Are the locations valuable to you? Are they in market segments that would help you? What is the business worth to you?

Analyze the value. How much does the seller want? It may be that the seller would be satisfied with less than you thought, so you should always ask this. In our experience, though, the seller is factoring in a lifetime of work, sentimental value and other things that are of no value to you. Do not react to the price. Just ask more questions as they come up and say you will get back with them.

Structure the offer. Be as creative as possible in structuring an offer. The terms are in some ways as important as the price. A percentage of revenue may be a good approach, because the seller may have a high regard for his business, and you are protected if the revenue comes in lower than expected. You pay a commission to a travel agent — why not pay the seller? When we purchased the local business, the terms were that we took over the financing of the vehicles, with an adjustment for market value at the end of the holding cycle, plus 10 percent of the revenue from the acquired locations for six months. The vehicles are probably an important issue to the seller, so try to come up with an approach that, while not harming your operation, gets the seller out of his vehicles cleanly.

Show respect. Above all, show the seller and his or her business respect for the lifetime of work he or she spent building it. Obviously, mergers and acquisitions in the local and regional end of the car rental business will not keep Goldman Sachs in business, but it can be a great opportunity under the right circumstances.

A HISTORY OF BUYING AND SELLING Jim Tennant was the founder and partner of car rental businesses based in the San Francisco Bay Area from 1982 to 2001. During that time, his company completed the following sales and purchases: ● Bought a small, local downtown San Francisco franchise using a small down payment and a three-year note. Leased a few of the seller’s vehicles for carrying costs until they were sold. The location (which later became a Payless franchise) had a very strong manager and the office paid for itself much faster than anticipated. ● Sold the Payless franchise and business to a sophisticated buyer with no car rental experience. The price was based on a multiple of adjusted earnings, plus two years paid consulting assistance. Gave buyer rights to Ford repurchase vehicles, plus leased

buyer a small number of vehicles to help in transition. After takeover, spent considerable time with the seller, who is very successful today. ● At the same time as the Payless sale, purchased the money-losing but much larger Thrifty Car Rental franchise and business, with TENNANT a down payment plus a five-year note. ● Purchased large local, multiple-location rental business. Very little overlap between new and existing business offices; closed only one office. Paid 10 percent of acquired offices’ revenue for six months, plus took over vehicles that were not yet ready for sale. Ran into many unanticipated problems, in no small part due to broken promises from the telephone company, resulting in a delay in having all offices online.

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LITTLE WORDS LEAD TO

BIGGER PROFITS Proper language during the rental process will increase sales conversions, lower customer complaints and boost the confidence of your frontline sales team. PHOTO: ©ISTOCKPHOTO.COM/ WOSEPHJEBER

BY KEN STELLON

he success behind every outstanding car and truck rental operation is always found in the smallest of details. The best team members approach every detail as though it were the greatest piece of the operational puzzle. It is critical for your frontline team to understand the importance of their words during those critical five minutes in the rental process. Creating an awareness of how the “little things” add up and how words matter will enhance your customer’s experience and lead to a stronger bottom line.

The Power of “We” When pricing a reservation rate, walkup or an upsell, it is critical that the frontline associate always use the pronoun “we” instead of “I.” If an associate says, “I can get you a rate of $49 per day on that,” it implies that the frontline associate solely controls the pricing scenario. In many cases it will open up further negotiation with the customer. This effect is magnified if your sales team is much younger than their average customer. By utilizing “we,” a “strength in numbers” perception is created for the customer because it implies that the perceived entity of the car rental company is behind the frontline associate as well. Using the word “we” instead of “I” is always more effective in a customer service redemption scenario as well. Saying to an upset customer, “Mr. Smith, I understand you

have a concern, let me listen to it, so we can get it resolved,” creates for the customer an environment of collaboration. Measurable Impact: Operators who have a strong service-based sales process in place with follow-up training and coaching can expect to have a stronger upsell conversion than their competitors. They will also have a stronger rate per day on their walkup rentals and a higher reservation conversion rate.

Avoid Passive Talk Implement a defined coaching process that stresses strong, confident dialogues and closing messages. Train your frontline team to avoid using passive phrases such as “We have,” “Do you want,” “We offer,” “Would you like, “Do you need.” Replace those passive messages with strong words and phrases such as, “recommend,” “suggest,” “we encourage,” and “many customers prefer.” Successful sales people are advocates of their products and services; utilizing this dialogue technique will make the rental process more professional for your customer and will increase the confidence level of your frontline sales team. Measurable Impact: Eliminating passive talk in your frontline team will increase your coverage and product sales conversion as well as lower customer complaints.

Using “Empty” Lowers Profits Telling the customer to return the vehi-

cle empty not only lowers the ability to sell your fuel service option, it also increases the customer’s apprehension that they will run out of gas prior to returning. The margins on fuel are thin to begin with, encouraging the customer to push it will only make them worse. Replace the “empty” phrase with, “You can return the car with whatever amount of gas you are comfortable,” or “You can return the vehicle without refueling.” This will lower your customer’s apprehensions about fuel. This dialogue and benefit to the customer is only effective if the customer is aware of the convenience of the fuel option and is informed that they are purchasing the entire tank. Measurable Impact: Based on a recent study, the average profit margin on prepaid fuel services is 11 to 14 percent. Avoiding the word “empty” will not only increase your fuel margins on returned vehicles, it will lower your sales-related complaints and increase the conversion on fuel option sales.

Control the Call Rental operators spend millions on marketing to make the phones ring. It is critical that their frontline sales teams be prepared to answer those phones in a polite and professional manner. The most effective frontline team member answers the phone by thanking the cus-

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tomer immediately. The associate will then state the rental office’s geographic location, offer his or her name to the customer and then solicit the name of the customer. For example, the strongest greeting is, “Thank you for choosing ABC Rent A Car at Fourth Street, my name is Ann. May I have your name please?” This technique conveys appreciation immediately to the potential customer, and by stating the location, the associate is often answering the customer’s first question. This technique also quickly transitions to the relationship aspect of the associate’s name and the potential customer’s name. Time is money, and competition for that potential customer’s attention is fierce. Ensuring that your team utilizes this strategy will lead to greater call efficiency and new bookings. Measurable Impact: To measure your team’s follow-through, have your team test call their neighboring locations and your competitors. The impact of using this technique can be measured by the increase in local reservations made compared to the

800 number reservation channel and the decrease in reservation cancellation rates.

Ask Open-ended Qualifying Questions In gathering information from the customer, it is essential to use open-ended questions to determine his or her needs. Asking closed-ended questions usually results in a “yes” or “no” response and doesn’t allow the associate to gather necessary information to make sound, needs-based recommendations. Although using open-ended questions will take more time than closed-ended questions, the results can be significant. Openended questions are more useful in gathering information, because responses are not as limited. These questions are also perceived as less threatening and foster a high level of trust. Measurable Impact: If associates use only closed-ended questions, they will reduce most product penetrations (namely, upgrades and coverage) by 20 to 30 percent — thus hurting the operation’s bottom line.

Conversely, if associates use open-ended questions, sales penetrations increase dramatically and certain customer complaints are reduced as well. “It’s the little things that are vital. Little things make big things happen,” John Wooden, one of the greatest basketball coaches of all time, once said. Take stock of those little things that can make big things happen for you, your operation and the team that you entrust to take care of your customers. Ken Stellon is a managing partner for the Frontline Performance Group (FPG). Stellon and the team at FPG are frequent contributors to Auto Rental News. Contact Stellon at (630) 788-2879. Team members from Frontline Performance Group will be presenting and exhibiting at the 2011 Car Rental Show.

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WILL

ELECTRIC V WORK FOR YOUR R

First adopters will gain free publicity and a high rental rate. But with uncertain resale values, range issues and limited initial availability, the decision to acquire electric vehicles BY TIM YOPP for your rental fleet is not to be taken lightly.

ure electric vehicles (or EVs) are becoming the latest rage in the auto rental industry. It seems a week does not go by without another announcement of a new EV launch. If you have been to the Car Rental Show in the past few years, you may have seen and test drove EV models available through Eckhaus Fleet, including ZAPs, Zenns and the Mitsubishi i-MiEV. The first wave of electric cars is just reaching the market, and Hertz and Enterprise have announced they are adding EVs to their rental fleets. But is this the right time to add electric vehicles to your fleet? The first step is to understand the market through the answers to these questions:

WHY WOULD YOU WANT TO BE AN EARLY ADOPTER?

A Tesla Roadster meets a Mitsubishi i-MiEV outside the Eckhaus Fleet offices in Clovis, Calif.

Eckhaus Fleet recently put the Mitsubishi i-MiEV through its paces for two weeks near our offices in Fresno, Calif. During that time we had more than 30 city officials, fleet managers and interested individuals who wanted to drive our test model. ●

Free Publicity! Because Eckhaus Fleet had tested the i-MiEV locally, our company was featured on two local television newscasts and in the business section of the Fresno Bee. One electric car might pay for itself in free advertising if you are first to the market. If you wait and end up the third or fourth rental company in your area with an electric car, you will not get the same response as the first.

Hertz has partnered with Daimler’s smart USA to bring the smart for two electric drive to the Connect by Hertz car sharing program.

●

The Benefits of Green Incorporating EVs into your fleet shows your commitment to being environmentally responsible. Enterprise and Hertz realize being green is good business. Far from being “tree huggers,” these companies are bringing in more customers at a higher price point. Corporations with green mandates will want to try out the electric car. They will want to rent them for presentations and conferences to show their commitment to a cleaner environment. Cities and states are also under similar mandates and they will want to try out the new technology as well. If you rent EVs, your business will be exposed to customers you might not normally do business with.

●

The Novelty Factor Initially, there will be a limited number of units available for both consumers and rental fleets, and this lack of supply will allow for higher rental rates. When the (non-electric, but much hyped) smart car was first introduced, Eckhaus sold two units to a customer who was able to rent them out constantly at $99 a day with a twoday minimum. The customer sold them for a profit. The Nissan LEAF has a wait list of more than 20,000 buyers. A lot of people will want to rent an electric car to try it out. When you’re ready to de-fleet, early adopters will be in line to buy your used units.

●

Incentives to Buy Initially, there are several federal and state programs available to encourage early adoption. There is a federal tax credit of up to $7,500 for qualified electric vehicles. In California, there is an additional rebate from the state of up to $5,000. Some cities also have programs. With these incentives, an electric car like the i-MiEV, with an estimated MSRP of

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VEHICLES R RENTAL FLEET?

$28,000, could cost as little as $16,500. The Nissan LEAF site has incentive information by state. (Visit www.nissanusa.com/leafelectric-car and click on the “Price” button to view incentives.) ●

Reduced Maintenance Electric cars require almost no maintenance. Many of the cars are direct drive so there is no transmission and there is no oil to change. Regenerative braking causes brakes to last longer. A once-a-year tune up is satisfactory to make sure the connections are tight.

WHY WOULD YOU AVOID BEING AN EARLY ADOPTER? ●

Battery Cost and Replacement Until the cost of batteries goes down, electric cars will remain expensive compared to a similarly equipped gas-powered vehicle. Though built on a proprietary platform, the Nissan LEAF has an MSRP of $32,780 for the SV model and is similar in size and equipment to the Nissan Versa, which runs from

about $10,000 to $17,000. The first Tesla model was powered by 6,831 lithium-ion batteries, which are commonly used in laptops. The cost to wire and manage all those batteries added substantially to the cost of the car. Electric cars coming to market now have larger format batteries that cost less and are easier to manage. These batteries are expected to last five to seven years. Battery costs are expected to drop with the application of new technologies and economies of scale. In 2009, a replacement battery pack for the Tesla cost $36,000, but Tesla estimates the cost will drop to $12,000 in seven years.

ket in used electric vehicles, which will provide an easy way to dispose of them.

●

Uncertain Value There is no established residual value for this car class. However, the market did quickly establish a residual value for hybrids such as the Toyota Prius. Similar to hybrids, electric vehicles’ residual values will vary with the cost of gasoline. In 2008, when gasoline went up to $4 a gallon, used hybrids were selling for more than new ones. With oil prices expected to stay above $90 a barrel, residual values should stay firm. Some people are forecasting an active mar-

●

Funding Until a residual value is established, banks may be reluctant to fund electric cars. This will be especially true with new, independent manufacturers such as CODA. However, Bank of America did provide funding for the purchase of Teslas. If you need funding, start small. 1st Source Bank “would consider 10 to 20 for a customer but not a hundred units initially,” according to Joe Opferman, vice president of the bank’s auto and light truck division. Range Issues The first generation of electric cars has limited range. Nissan estimates a range of 62 to 138 miles depending on terrain, speed and accessory use. This rental situation works well for business travelers with a series of local meetings, but not a family going from New York to Disney World. All manufacturers are equipping their electric vehicles with smart displays to manage remaining charge and direct drivers to a charge point. This should help reduce “range

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Enterprise and Hertz have announced partnerships with CODA Automotive to rent CODA’s all-electric sedan (pictured). Both rental car companies are also rolling out Nissan LEAF all-electric models to select locations in the first quarter of 2011. anxiety,” but what happens if your rental customer runs out of charge?

Enterprise announced it will offer the Chevrolet Volt extended-range electric vehicle for rent through a dealership location in Ontario, Calif. starting in January.

●

Charging Infrastructure, Time and Cost Public charging infrastructure is just coming online. A lack of charging stations combined with limited range and a lengthy charge time reduces electric vehicles’ utility. While most EVs will charge on a standard 110v household circuit, EVs take at least eight to 10 hours to get to a full charge, or longer. This presents charging challenges for quick turnarounds. Specialized quick charge circuits will charge an EV to 80 percent in about 20 minutes, but can cost up to $12,000 per unit and are not yet widely available. ●

Training In order to get the most miles out of your electric car, both drivers and your rental personnel need a limited amount of training. The cars are amazingly quiet. Some vehicles require that accessories need to be turned off when the EV is parked to avoid draining the battery. Driving style affects the range. Smooth acceleration and deceleration will extend range while aggressive acceleration and deceleration will decrease range. ●

Availability Electric vehicles will be first assigned to dealers. As with any overhyped new model, dealers will sell them for substantially more than invoice. We have already seen delays in the projected delivery of the first all-electric production vehicles and will probably see more. The Nissan LEAF and the extended-range electric Chevy Volt are officially on sale but are

experiencing severe backlogs. With this in mind, it is highly likely that only the larger rental companies will be able to get their hands on early units. CODA, makers of an all-electric sedan, have pushed back their release date from December 2010 to the third quarter of 2011. Smart has announced it will launch the smart fortwo electric as a 2012 model in the fourth quarter of 2011 with very limited availability. Wider availability will not occur until the first or second quarter of 2012. The American version of the Mitsubishi i-MiEV is slated for sale in the fourth quarter as well. Eckhaus Fleet has a fleet allocation of iMiEVs available for rental and commercial fleets. Depending on your market, adding a small number of electric cars to your fleet could be very profitable if they are market-

ed properly. There is a risk, but you will be a market leader and as more electric vehicles arrive the first adopters will have established the market. Tim Yopp is chief technology officer of Eckhaus Fleet LLC, one of the largest independent fleet suppliers representing Hyundai, Suzuki, Toyota and other manufacturers to the corporate fleet and rental car industries. He can be reached at tim@eckhausfleet.com. Eckhaus Fleet will have an electric vehicle to test drive at the 2011 Car Rental Show.

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HOW TO EFFECT

LEGISLATIVE CHANGE Between your state and local representatives, Chamber of Commerce and industry associations, you have the power to shape legislation that will directly affect your business. BY SHARON FAULKNER

n any business, if you have a problem you find a solution. You don’t wait for someone else to fix what’s broken; you put out your own fires. So, why do so many people expect others to change a law for them when it’s crippling their own industry? It might be that they just don’t know where to begin, or they think they won’t be effective when it comes to politics — the most frustrating, slow moving, at times ineffectual, often confusing process that exists in the world today.

Your state is a permissive use state. How can you change it? There is another discriminatory tax for automobile rentals. How can you stop it from happening again in your state? The government thinks that anyone who has a license, regardless of age, should be allowed to rent your car. How can you make sure this bill doesn’t move forward? Every year countless bills are introduced in Congress and in state legislatures that will affect your business, most of them negatively. So what can you do?

Start by knowing that you usually can’t do it alone. Most of the time it takes numbers to stop, support, or introduce legislation. Join your state’s rental organization and become active by attending its meetings. Even if you don’t think of yourself as a political animal or a joiner, you can’t ignore that the car rental industry is plagued by government regulations and taxes. At the minimum, you need to stay informed of the political climate surrounding your business.

NEW YORK STATE COLLISION DAMAGE WAIVER BILL SAGA Timeline of actual legislation and amendments, 1988-2002 If you want to change a law, it takes time, commitment, money and a unified front from within the ranks of your industry. This timeline outlines the 14-year effort to change the New York State law regarding the ability to sell a collision damage waiver.

▲

January 1989

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The New York Vehicle Rental Association forms to reverse this amendment. Independents, franchisees, lobbyists, industry vendors, travel groups and local politicians gather to discuss possible strategies and plans to propose new legislation. The first lobbyist is hired.

State legislature passes the bill, effective retroactively, to redefine the authorized driver definition that is more favorable to the industry.

April 16, 1989

PHOTO: ©ISTOCKPHOTO.COM/BLUBERRIES

▲

December 1988

An act to amend the general business law section 396z in New York passes. It limits negligent drivers’ liability for damage to vehicles rented from rental companies to $100 and eliminates the sale of any collision damage waiver in the state of New York. It defines “authorized driver” to include a wide range of individuals, including most 18 year olds. This amendment passes without opposition because at the time there was no national or statewide car rental association that monitored legislative issues. It also passes because it was actually supported by a major car rental company. The RAC did not share its knowledge of the bill until it was too late to stop it.

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Meet the Politicians When you want to introduce a bill or an amendment to a bill, you need an elected representative on either a local, state or federal level to introduce that bill or amendment. That’s where the real politics begin. Being a part of your community and meeting these representatives is very important. It’s always harder for someone to refuse assistance when they know you. This principle applies to industry events, such as the Car Rental Show. At this annual industry gathering, you have the opportunity to meet and greet the people who can help you improve your own business —financiers, software providers, insurance company executives, manufacturers and the vendors. Getting to know the politicians and lawmakers and, more importantly, getting them to know you, make the business of doing business easier. So goes politics. Start with your local chamber of commerce. Most chambers have an annual breakfast meeting where the state senators or house members are invit-

▲ This reunion of New York Vehicle Rental Association board members took place in 2009.

(L to R) Richard Aronow, past president; Frank Elliott, board member; Sharon Faulkner, past president; Bob Faulkner, past president; and Rick Norris, past treasurer. At that time, only the Faulkners were still in business as Dollar and Thrifty rental car operators in Albany, N.Y. ed to speak on the state of the state. This is a great place to begin your own campaign to meet the people you will be asking for support in the future.

Getting Involved If a bill regarding our industry is introduced, it goes through 53 steps, and sometimes more, before it becomes a law. Therefore, most bills

NEW YORK STATE COLLISION DAMAGE WAIVER BILL SAGA

For six years, briefing papers are written and distributed. Lobbying assignments are given to participating car rental owners and vendors. Politicians are contacted and appointments with legislators are made during every session that the legislature meets in Albany, N.Y. Full days are set aside to visit each legislator that is in opposition to amending 396-z as well as revisiting each legislator who supports the amendment to thank him or her and ask for their continued support. Letters are presented to every member of the Senate and the House. Each member of the association is asked to send letters to his own representative. (Note: It only takes 25 letters to your legislator to acknowledge that there is a concern that needs to be addressed.) Members attend chambers of commerce meetings, business organization dinners and, most importantly, political fundraisers at every opportunity. Members repeatedly discuss and outline the devastation of this legislation with politicians.

1995

A model amendment is proposed to increase customer liability from $100 to $500. Sale of collision damage waivers would continue to be prohibited. The amendment is approved by Senate and Assembly committees. Lobbyists for the industry are convinced that the amendment will pass. During the final state Senate debate, one major rental company registers opposition to the amendment and it is not brought up for a vote. (Note: Without the cohesive agreement and support of the entire industry most legislation will not ppass.With the opth pposition of just one o ccompany no legislation le will pass.) w

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1990-1994

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PHOTO: ©ISTOCKPHOTO.COM/ SCHULTEPRODUCTIONS

19961998 The New York Vehicle Rental Association continues to meet and raise money for lobbyists and political contributions. More letters are written. More breakfasts, lunches, dinners and conferences are held. More legislators are contacted and appointments are made for lobbying days at the capital. No legislation is passed in support of the car rental industry.

PHOTO: ©ISTOCKPHOTO.COM/DJGUNNER

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introduced in Congress don’t become a law. Some bills don’t even get noticed, but those that do can be extremely detrimental. That’s why you also need to join and support your national association, the American Car Rental Association. ACRA can be there when you’re too busy running your business to go lobby at your state capital. ACRA watches the bills that are introduced, tracks their progress and makes every effort to influence the outcome of new or amended bills that will be a problem for our industry. Check ACRA’s Website for information about the current bills that are being watched or acted upon. When a bill is introduced to amend an existing law or when new legislation is introduced that will benefit the car rental companies, which are members of our association, ACRA aggressively lobbies legislators for passage. Besides joining ACRA, what can you do? Communicate with your legislators. Don’t know where to start? Start by writing and explaining how legislation will affect you and your customers. Can’t seem to get it started

Become an Advocate Becoming an effective advocate on legislative issues isn’t easy. Being successful at it is even harder. But it can be accomplished. ACRA, with the aid of its members, has stopped taxes from being added to our rentals, has reinforced our stance against the return of vicarious liability, and has monitored thousands of legislative matters affecting you and your company. Every day you are an advocate for your customers, your employees and your family members. You need to add your livelihood, the car rental industry, to your advocacy group. Our industry can accomplish much more as

1999-2001

The car rental industry is still not working together to pass the proposed amendment that would make the renter responsible for damages to rental cars. A bill to repeal the law is stopped in the Assembly by Assemblyman Pete Grannis, who speaks out against it. It is pulled off the calendar.

▲

Dec. 3, 2002

a common voice than any one person can do alone. Become a part of the solution to your legislative problems. You fixed the car wash, you upgraded your software and you hired an experienced manager. Now you can also put out the legislative fires before they ever get out of control. Sharon Faulkner is the executive director of the American Car Rental Association. As a former Dollar and Thrifty franchise owner, Faulkner played an integral role in shaping auto rental-related legislation in New York State and nationally. Join Sharon Faulkner and the board members of the American Car Rental Association for a panel discussion on today’s issues affecting the auto rental industry.This is your chance to cause action and effect change through your association.

2002

The industry mounts a major lobbying campaign to repeal the law. It redoubles its efforts and the large car rental companies pour money into lobbying and hire a former aide of the House minority leader. The industry puts forth the argument that there has been a decline in the number of rental cars from 120,000 in the decade previous to just 64,000. In addition, more than 360 rental offices have been closed and counting. The moral argument is presented that it is wrong to allow bad drivers to walk away from accidents after paying only $100. The bill passes the Assembly and the Senate and goes to Governor George Pataki for his signature. The major rental car companies combined with the small car rental companies—the ones that survived the devastation caused by the original amendment from 1988—form a united front and finally succeed in passing an amendment that would allow rental vehicle companies to hold the renter responsible for damages and reinstate the sale of collision damage waivers with a cap of $9 per day.

▲

After a devastating 14-year saga, during which time hundreds of rental companies failed, Governor Pataki signs into law a bill that allows car rental companies to sell collision damage waivers to cover the cost of repairs. The amendment that the industry has been seeking since 1988 is finally attained and the industry attempts to rebuild. There is a five-year sunset on the amendment. The car rental industry finally works together to assure the success of the amendment.

▲

1998

The Vehicle Renters Financial Responsibility and Protection Act is introduced. It would allow the sale of damage waivers and outlines when a rental company may or may not void a waiver. It also limits the amount the rental company would be allowed to charge per day for that waiver. The amendment does not pass.

or get it done? ACRA can provide you with the tools that you need to lobby on your own. ACRA will provide you with sample letters to put on your letterhead and give you your legislator’s contact information so you can submit your correspondence. ACRA will provide you with updates on the combined lobbying efforts to halt or promote the legislation that directly affects you.

2007

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AUTO RENTAL CHOOSE OPERATORS FAVORITE RENTAL CAR OF ALL TIME Survey reveals what really matters to a car rental operator. Toyota Camry tops the list. BY CHRIS BROWN

1991 TOYOTA CAMRY 2011 TOYOTA CAMRY The Toyota Camry was chosen as rental operators’ favorite rental car of all time. Respondents called it a “great car, period,” and gave it rave reviews for its “customer experience.”

here’s a survey for everything these days, and everything is easily translatable to list form. The auto industry is not immune to this: Who can resist “The Best Vehicles for Dogs” or “The World’s Ugliest Cars”? Though predominantly consumer driven, auto-related surveys have just as much, if not more, relevance within the business community. This is especially true for auto rental operators, who have experience with scores of models and hundreds of vehicles from varied manufacturers, and who rely on their fleet vehicles as their main source of revenue. Auto Rental News surveyed owners and managers of auto rental companies to determine their “favorite rental car of all time.” Survey respondents were asked to judge 35 model choices on price, functionality, reliability, safety, customer experience, maintenance, acquisition costs, resale value and overall return on investment. The results revealed how the auto rental industry considers a favorite car compared to the general public. In their evaluations, survey respondents cited “reliability” most often, not surprising when rental cars run at least a thousand miles a week. Cost to repair

ranked almost as high—with so many vehicles to manage, “cost to replace brake pads” and even “cost to replace a lost key” become key considerations. Contrary to consumer car surveys, a vehicle’s styling was not a primary judging criteria. While styling was mentioned, it was often in deference to a simple, ergonomic design. Rental operators appreciate a car “without a lot of bells and whistles for the customer to mess up.” Acquisition cost matters, but resale value was mentioned more often. Functionality, roominess and trunk space are also coveted—respondents pointed out that a good rental car needs to be versatile enough to handle a renter’s needs if the requested rental class is sold out. Here are the top 10 results, out of 386 responses.

far the best rental vehicle I have ever come across, factoring in every aspect of the industry”; “I think they are the best-built cars [serving] the car rental industry.” More so than other models, operators pointed out that the Camry is a renter’s favorite, citing its “good image to customers”; “customer satisfaction”; “customers love it”; “people request it.” The Camry was voted the most popular rental car in spite of Toyota’s recent recall issues. Respondents wrote: “… fewer maintenance issues (except for that pesky sticking pedal business)”; “Customer satisfaction, resale and reliability, even with last year’s recall issues”; “Until 2010, it was the most reliable and offered excellent residual value.”

SECOND PLACE: FORD TAURUS (PRE DISCONTINUATION)

THE WINNER:TOYOTA CAMRY In addition to achieving the highest score, the Camry garnered the most comprehensive praise from the auto rental industry, with comments such as “most versatile”; “great car, period”; “great all-around rental”; “It is by

We split the Taurus into two choices, as the model line was discontinued in 2006 and reborn on a new platform in 2009 for the 2010 model year (with a rebadging of the Ford 500 in between). Both incarnations were highly praised by rental oper-

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FORD TAURUS CIRCA 1990

2011 FORD TAURUS Anointed as “a classic rental car,” the Ford Taurus was chosen for its low cost to operate and “bulletproof ” reliability. The model’s longevity was a plus.The reborn Taurus was praised for its styling, performance and overall quality. ators. The pre-discontinued Taurus took second overall in our survey, while the new Taurus took third. The original Ford Taurus is viewed as “a classic rental car.” Operators praised the Taurus for its low cost to operate, “bulletproof” reliability (“Steady and true. Seemed like the one you could always count on to get you there and back.”), as well as its flexibility “as both a mid- and full-size rental.” Its model longevity was a plus, as respondents referenced its “familiarity” and “endurance.” “Customers loved the reliability of a vehicle that hadn’t changed much in almost 15 years,” wrote one respondent. “Very few customer complaints—they knew what they were renting,” wrote another.

THIRD PLACE: FORD TAURUS (NEW DESIGN) The new Ford Taurus got high marks for its styling, performance and overall quality. The new Taurus garnered comments such as “Customers like to drive this car; it’s comfortable, reliable and easy to maintain,” and “The model meets or exceeds all our expectations with regards to the customer experience, reliability and functionality.” 4.TOYOTA COROLLA The Toyota Corolla was praised for its high resale value, which translates into higher revenue per day and a very good return on investment. It was also cited numerous times for its reliability. This response: “Popular, dependable, maintenance free, good resale, positive customer response,” sums up the sentiment in many of the comments. 5. CHEVROLET IMPALA Operators particularly praised the Chevrolet Impala for its roomy, “six-passenger capa-

bility,” its reliability (“the least amount of recalls in the last few years”), its “good fleet price” and “good gas mileage for a large sedan.” Others mentioned the Impala as “user friendly, economical and easy to buy and sell.” 6. HYUNDAI SONATA Hyundai has used the rental market to gain exposure for its new models. The move has paid off, as the manufacturer’s quality improvements are getting noticed: “I still have Hyundai/Kia cars with 100,000 miles,” wrote a respondent, while others wrote, “Least [number of] mechanical problems”; “Long-term reliability of vehicle, enabling long-term usage accompanied by the strong resale value.” Another referred to the Hyundai Sonata as “a great car to run in a rental fleet for 1824 months and sell directly to customers,” and one wrote, “No bad reviews from customers and it is requested a lot, not to mention I like driving them compared to other vehicles on the list.” 7. HONDA ACCORD The Honda Accord made the top 10, even without the manufacturer actively pursuing the rental fleet market. Respondents praised the Accord for its strong resale value and its fuel economy, and called it a “customer favorite.” 8. CHRYSLER 300 The Chrysler 300 was praised for its comfort and features (“heated seats and satellite radio”; “electronic features are nice and easy to operate,”) as well as its “luxurious, smooth ride,” resulting in “customer satisfaction across a wide variety of demographics.” 9. (TIED) FORD FOCUS The Ford Focus garnered praise for its low operating and maintenance costs. Respondents named it as “one of the most depend-

able vehicles, inexpensive to repair,” and cited its “low cost, good longevity and durability, acceptable resale value considering low initial cost.” 9. (TIED) NISSAN ALTIMA The Nissan Altima was praised for its customer experience, as respondents nominated it for its “customer confidence” and “customer general satisfaction” while calling it “an ‘ask for’ from customers.” “Nobody ever complains about it,” wrote a respondent. The Altima was also commended for its reliability, called “the least trouble of any vehicle we have owned or leased for the fleet.” 9. (TIED) CHEVROLET MALIBU The Chevrolet Malibu garnered style points, in addition to its overall cost to operate and reliability. The Malibu was also named for its “car group flexibility.” “It’s a mid-sized car that suits almost everyone’s needs, and made by a great brand,” wrote one respondent.

The Getaway Car The Dodge Charger did not make the top 10, but was praised because “They rent as soon as they hit the ground.” Others praised its “high profit margin.” However, one respondent is thinking twice before purchasing them again with a more powerful engine. “We were requested by the Newark Police to stop purchasing Chargers with Hemis,” he wrote. “They couldn’t ‘catch’ them. Needless to say we lost a few.”

The Write-Ins and Noteworthy Comments We chose to cover only high-volume sedans for this survey to limit the number of choices (35 models) and prevent informa-

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tion overload. Therefore crossovers, SUVs, pickups, luxury cars and exotics were excluded from the list. However, that did not prevent respondents from choosing vehicles from those classes as write-in candidates. Small SUVs and crossovers were noted for their versatility. The Ford Escape was nominated for its “Great functionality for customers. Good room for adults. Rents well as an SUV, mid- or full-size car with customers happy to accept it.” The Buick Rendezvous was praised because it “Functions as a car or an SUV, priced comparable to cars, inexpensive to upgrade customers and great resale.” The Ford Mustang collected several writein votes. “Everybody likes this car,” wrote one respondent. “It makes [customers] feel young and it is not that expensive, so customers think they are getting a bargain.” Two hailed the Ford Mustang Shelby GT, which is available exclusively through Hertz: “As a car guy, this was the pinnacle of rental cars”; “If you have driven one, you don’t

DODGE ARIES One operator praised the Dodge Aries “for keeping my fleet safe from the weekend warriors.” need to ask the question!” Other write-ins included long-gone—but apparently not forgotten—models. One operator called the Dodge Aspen of the 1970s “indestructible,” while another voted for the Dodge Dynasty, saying “[It] was probably the best ‘workhorse’ of the early 90s fleets and very popular with the general public at that time.” Nominating the first-generation (19701972) Chevrolet Monte Carlo, one operator wrote, “What else? Resale value, resale value, resale value!”

One called the 1977 Pontiac Grand Prix “the coolest drive ever.” And then there is this evaluation of the Dodge Aries, which puts the job of the car rental operator into perspective: “I lived to see the face of young hot rodders, who were ready to tear up my rental car over the weekend, when I handed them the keys to this pale green four-door, four-cylinder Dodge Aries, that did zero to 60 in three minutes. Thank you, Dodge, for keeping my fleet safe from the weekend warriors.”

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22 ARN • 2011 TECHNOLOGY HANDBOOK

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Please fax this proof back by ______________ on_________________________.

products & vendor news Check out these companies and many more on the exhibit hall floor!

TML Information Services offers DriverCheck, a risk management solution that enables RACs to query a customer’s official driving record within the time it takes to get a credit authorization, analyze it based on a pre-defined rule set, and obtain a safety based rental decision consistent with good risk management practices. The program includes four phases of vehicle monitoring and training that work to protect assets and minimize liability. For more information, call (770) 916-6700 or visit www.drivercheck.net.

NS Corporation’s Mini Express Wash is an automated wash system that’s suitable for any fleet size. A small pad, a garden hose and electricity are the only things needed to begin washing cars with the system. The company’s patented Lammscloth and Soft Scrub combination is also included to provide a thorough wash without damaging clear coats or paint finishes. Other system features include hose activation for both machine and rinse, a built in pre-soap applicator and a built in wax applicator. For more information, call (800) 782-1582 or visit www.nswash.com.

ARBOC Mobility offers a low-floor paratransit bus called the Spirit of Mobility. The bus is designed for easy entry and exit through the 41-inch clear door opening and allows for one step entry into the passenger area, eliminating the standard step entry application. The LP Model also offers the ability to add a ramp, which is compliant with the Americans with Disabilities Act and can meet all non-ambulatory passenger needs. The Spirit LP offers configured perimeter floor plans with up to three wheelchair positions. For more information, call (866) 953-5555 or visit www.arbocmobili-

2011 TECHNOLOGY HANDBOOK • ARN

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products & vendor news VidTroniX specializes in direct thermal printers for the aviation and travel industry, with services including manufacturing, maintenance, design and parts supply. The three models presently available are the ATP 3 Travel Document Printer, the ATP MAP Travel Document Printer and the ATP RFID system. Currently, VidTroniX printers are certified with Amtrak, ARINC, AirIT, SITA, Ultra and IBM. VidTroniX has supplied more than 70,000 printers worldwide since 2000 and more than 9,000 thermal printers in 2008 alone. For more information, call (913) 441-4124 or visit www.vidtronix.com.

On The Move provides vehicle rental programs that include rental insurance and ancillary products, such as forms and rental software. The programs currently available are the standard car rental program, the members’ car sharing program, and the members’ truck sharing program. On The Move also offers customizable graphics for vehicles, truck rental software, Zero Base advertising and various types of roadside assistance. For more information, call (800) 645-9949 or visit www.onthemovetrucks.com.

Bluebird Auto Rental Systems recently upgraded its RentWorks software to electronically capture a renter’s signature with a signature pad. Before the contract is printed, a “script” is displayed to the renter with legal text for coverages, prepaid fuel, etc., which the renter then initials on the pad. The initials and signatures are then printed directly on the laser-based form. This module is included as a feature of Service Pack B9 for version 4. For more information, call (800) 304-5805 or visit www.barsnet.com.

Linear Logic’s new Digital Fuel Meter is a low-cost, easy to install and user-friendly device that directly measures how much fuel a customer actually uses. The device also is easily transferable from vehicles leaving the fleet to those coming into it. Installation requires plugging the device into the OBD2 connector under the dashboard, standard on 1996 model year and newer cars and light trucks, and pushing a few buttons to set up. To determine fuel usage, read the DFM at the beginning and end of the rental period (along with the odometer), perform the correct subtractions and determine fuel use to 1/100 of a gallon or liter. For more information call Ron Delong at (888) 433-5664.

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ad index COMPANY

PHONE

www.autorentalnews.com

WEBSITE

PAGE

Bluebird Auto Rental Systems .......... 800-304-5805 ................barsnet.com .................................C2-1

Vice President & Group Publisher Sherb Brown — (310) 533-2451 Executive Editor Chris Brown — (310) 533-2499 chris.brown@bobit.com Senior Editor Justina Ly — (310) 533-2496 justina.ly@bobit.com

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Associate Publisher Joni Owens — (310) 533-2530 Joni.owens@bobit.com (310) 429-9659 Fax: (310) 533-2503

Great Lakes Robert J. Brown 1000 W. University Dr. Ste. 209 Rochester, MI 48307 (248) 601-2005 Fax: (248) 601-2004 Printed in the USA

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All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission.

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The Advertisers’ Index is provided as a courtesy to Auto Rental News advertisers. The publisher assumes no responsibility for errors or omissions.

2011 TECHNOLOGY HANDBOOK • ARN 25

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NEED A HAND? 2011 Car Rental Show (CRS) will give you, the independent or franchised car rental operator, manufacturer or industry professional, the tools you need to take advantage of new opportunities to survive and grow in this everchanging economic landscape. Jam-packed with education, information and networking, the Car Rental Show offers take-home value for those in all facets of the industry. Clear your calendar March 8-9 and join us in Las Vegas!

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Register Now! Your affordable, value-packed conference pass gives you the once-a-year opportunity to immerse yourself among car rental industry professionals in the exciting atmosphere of Las Vegas!

You’ll enjoy… • Over 6 Hours of Networking Opportunities and Exhibit Hall Time. •

11 Educational Sessions - Which Include 2 Keynotes, 4 General Sessions and Your Choice of 5 Concurrent Sessions.

• An Exhibit Hall Full of Products and Services Your Business Needs to Thrive. •

2 Networking Receptions, 2 Breakfasts and a Lunch.

• A Chance to Win Great Prizes in our Room Block Raffle.

The 2011 Car Rental Show’s Innovative Session Topics Like These Help You Maximize Profits:

…And Seasoned Car Rental Industry Insiders’ Keynotes will Energize and Inspire:

• Five Profit Boosters and Five Profit Busters of Incremental Sales • Profit Making Ideas to Use Today • Turbo Boost Your Rental Car Operation: Secrets to Running Your Rental Operation at Maximum Efficiency and Profitability

JACK FITZGERALD Fitzgerald Auto Mall and Rent-A-Wreck

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• High Risk, High Reward: Renting Exotics

LARRY DE SHON Executive Vice President of Operations Avis Budget Group, Inc.

r RentalShow.com Or Call 800-576-8788

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rent ALERT

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Program Finalized for 2011 Car Rental Show Technology, sustainability and “the new normal” will take center stage at this year’s annual industry conference. BY CHRIS BROWN

he program for the 2011 Car Rental Show, taking place March 8-9 at the Las Vegas Hilton, has been finalized. Here are further details.

Car Rental and Technology This year’s opening keynote speaker, Larry De Shon of Avis Budget Group, will discuss how technology is not only changing car rental processes, but also changing the traditional business model itself. De Shon’s address, titled “Rethinking Car Rental in a New Era of Technology,” is scheduled for Tuesday, March 8 at 1:15 p.m. De Shon will guide car rental operators on how technology is providing new opportunities for the industry, but with these opportunities come new challenges in areas such as PCI compliance, customer information security, fleet safety and environmental regulations and standards. Will you be able to harness technology to avoid the potholes and better your business? De Shon, executive vice president of operations, oversees all domestic car rental operations as well as quality assurance and field security for Avis and Budget. Prior to joining Avis Budget Group, De Shon was senior vice president of airport operations at United Airlines Inc., leading an organization of 23,000 employees in 29 countries.

The New Normal Automotive industry entrepreneur Jack Fitzgerald will deliver the closing keynote address, scheduled for Wednesday, March 9 at 4:15 p.m. Fitzgerald’s keynote, titled, “From Bailouts to Cash for Clunkers: the New Normal in the Car Business for Dealers and Rental Operators,” will examine today’s issues by drawing on his more than 50 years of experience in the auto industry. Fitzgerald will touch on the upheavals of the last several years and how his organization has dealt with the changing landscape of the car business. Fitzgerald will present his unique perspective in the context of a franchised dealer, a retail car rental operator and a franchisor leading a car rental system. Fitzgerald owns and operates 15 car sales locations and 35 manufacturer franchises in Maryland, Pennsylvania and Florida, as well as Mid-Atlantic car rental company Nextcar. In 2006, he acquired Rent-A-Wreck of America and sister company Priceless Car & Truck rental, the franchisor of more than 200 car rental locations across the United States and abroad in Scandinavia.

Sustainability Now In a special Wednesday morning breakfast session, Lee Broughton of Enterprise Holdings will highlight “the triple bottom line”— global economic, social and environmental sustainability. Broughton, who heads up corporate sustainability at Enterprise Holdings, will address the need for the car rental industry to develop a sector-specific position on sustainability reporting and transparency. He will discuss how car rental companies must embrace new, clean fuel and engine technologies to help ensure that the passenger vehicle remains relevant. As well, the industry must work together regarding sustainable best practices before environmental regulations and legislation mandate the industry to do so.

International Operators Seminar The International Operators seminar is back by popular demand! Hosted by Angela Margolit of Bluebird Auto Rental Systems, this pre-conference, two-hour session is scheduled for Tuesday, March 8, from 10 a.m. to noon. In this jam-packed, hands-on session, CRS international attendees will learn about the latest trends and techniques to implement in their operations. Margolit will present the newest technology for going mobile, including signature pads and handheld devices. Roy Bricker, COO of Element Payment Services, will discuss how important new security mandates in the credit card industry will affect car rental. In the U.S., new Payment Card Industry Data Security Standards (PCI DSS) influenced the development of technology solutions to ease the cost and complexity of compliance. Outside the U.S., countries including the U.K. and most recently Canada are now mandating chip-and-PIN technology at the point of sale. Bricker, who was involved in the development of smart cards (chip and PIN) at MasterCard, will demonstrate devices. Joe Knight, vice president of business development for Fox Rent A Car, will introduce Fox’s new affiliate program, which gives overseas operators the opportunity to align with this growing discount brand and offers them access to the Global Distribution Systems (GDS). Where and how do you source top-notch talent these days? Join Jim Davis and Tom Sabol of Leslie Saunders for a session full of hiring and training tips. Participants will take home ideas on finding candidates for the job, hiring the right team members and training them for success. Visit www.carrentalshow.com for further details.

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