Ever been tempted to hire the car of your dreams so that when you rock up at
a social gathering, other guests are suitably impressed by the lifestyle you
appear to live.
According to Daryl Scales, the number of people hiring lifestyle cars is
definitely on the up. Personally, he’s not too fussed about looking the part.
‘I’d hire whatever my wife told me to hire,’ Scales jokes. ‘I’m an accountant.
It would probably be a Corsa or some other budget car with low CO2 emissions.’
When US car leasing giant Enterprise Rent-a-Car chose London as a springboard
into European expansion twelve years ago, Daryl Scales jumped at the chance for
a change of scene and a new business challenge. But the 45 year old American
admits he was lulled into a false sense of security about just how different
life in the UK would be. ‘I thought we spoke the same language until I got off
Fortunately more than a decade of exposure to the UK’s customer service
culture has done little to dampen the UK finance director’s enthusiasm for the
concept of service with a smile. ‘At Enterprise, there’s no difference between
the US and the UK in terms of customer service. We want people to step into a
branch anywhere and transact with staff in exactly the same way.’
Service with a smile
Branch managers at Enterprise’s 320 offices around the UK aren’t yet under
contract to tell punters to ‘have a nice day.’ But with promotion of staff
hinging on hitting customer service targets, the company has given employees a
real incentive to make sure customers walk away with a warm feeling about the
Enterprise invests a huge amount of time and money measuring customer
satisfaction levels. Under the banner of ESQi (the Enterprise Service Quality
Index) it contacts more than 66,000 customers every year by phone to ask if they
were completely satisfied with their experience but most importantly it makes
sure that feedback is used in a meaningful way.
‘When employees get to a certain level in the company, the customer
satisfaction score of their branch has to reach the company average before they
can get a promotion. Companies need to revaluate who has ownership of customer
service. If it’s not at the right level it can be perceived by customers as
little more than lip service and a loss of loyal customers is very expensive to
replace. If we focus on customers and employees, profit and growth will follow,’
The US car rental business, which last month celebrated its 50th anniversary,
has been operating in the UK for the last 12 years, with Scales in the financial
hot seat since day one, having uprooted from New York with his wife and kids to
set up home across the pond. In that time, the business has grown hugely the
number of branches around the UK means that 90% of the UK population is no more
than a 10 minute commute from an Enterprise Rent-a-Car office.
Scales himself boasts more than two decades’ service for the company a
relative rookie compared to some of his colleagues in senior management. But he
denies that a lack of fresh blood at the highest echelons of the company sends
out the wrong message to employees further down the food chain. Ongoing
expansion creates growing demand for area managers and the business culture at
Enterprise provides a compelling reason for people to stick around, he believes.
‘It’s all about teaching employees how to be successful entrepreneurs, not
successful ticket riders,’ he explains.
The UK business is divided into 10 divisions, each with its own general
manager, financial controller and a management team responsible between them for
around 30 to 35 branches. Each branch has its own profit and loss statement, and
every one is evaluated on its own results.
Atmosphere of support
‘We teach them very early on in their careers to read and interpret financial
statements, fluctuations, trends and how to influence the results and how to
better manage costs. The support we give them makes them want to stay it’s
about personal careers development. If you don’t have a direct impact on how to
run that profit centre you won’t feel like you have any control over it,’ Scales
As the UK subsidiary of a US company, his job is made slightly easier by the
fact that financial reporting whether to Companies House or to auditors Ernst
& Young is handled by the global accounting team at the US parent company.
Scales admits not having to worry about IFRS or the intricacies of the UK tax
system is a relief.
‘I’m more of a hands-on operational FD. I get involved in helping with
strategy, but as far as the detail goes, I let the US run with that. We have to
file correctly, but once we’ve understood how the rules impact customers and
employees, I can leave the detail to the experts back home. It’s my job to be
out spending time with employees at branches and divisional head offices, and
getting involved with customers where it adds value.’
Being privately owned may not give Enterprise the same exposure as some of
its public rivals in the business the Avis’s and Hertz’s of this world but
Scales is adamant that it offers distinct business advantages.
‘We don’t have analysts telling us what our profit needs to be. We’ve been
able to grow the business to $9.2bn (£4.75bn) in global revenues and 879,000
cars under ownership.’
The UK subsidiary has grown its fleet of cars to 36,000 in 12 years, making
it the second largest leasing company after National, with current turnover
hitting $200m. Although the company may be best known for its car rental
business, 70% of revenues are today generated by its replacement business.
Enterprise has struck deals with insurance companies, body shops, roadside
assistance groups, auto manufacturers and fleet companies to provide them with
replacement cars when vehicles are not roadworthy.
In the meantime, Enterprise is certainly not immune to the impact of
environmental issues on the business world. While reducing your carbon footprint
may not appear to be a concept that sits comfortably with the car industry,
Scales says pressure from employees, new recruits and customers to be more green
are not falling on deaf ears.
His claims of a booming market for ‘ad hoc’ use of cars, as an alternative to
owning a vehicle, may be true, although industry figures suggest that the number
of cars being bought in the UK has never been higher. There were 165,603 new
passenger vehicle registrations in January this year, marking a 5.2% increase on
January 2006 figures, according to figures from European Automobile
Manufacturers Association. Similarly, low emission vehicles may be grabbing the
headlines, but to date they don’t represent anything more than a miniscule
proportion of Enterprise’s massive fleet.
‘These manufacturers aren’t producing a lot of these cars.’ Scales says,
‘customers might want more environmentally friendly options but they recognise
that there are financial factors inhibiting us.’
Enterprise has also pledged $50m in a carbon offsetting scheme to plant 50
million trees around the world, despite claims from critics that paying money to
offset your carbon emissions could just protect your conscience rather than the
Scales denies that any boy-racer tendencies are the reason why he is still
working for Enterprise more than 20 years down the line, although his wife might
disagree. ‘I’m far from a petrol head, my job is not about renting cars, it’s
about sorting challenges.’
Budget to the rescue
The congestion charge may be a minor inconvenience for most car drivers, but
for a car leasing business like Enterprise Rent-a-Car it represents a major
headache in unknown financial liability.
When the driver of a rental car unwittingly (or deliberately) enters the
congestion charging zone, it’s the car rental company that is left to pay the
Reclaiming that money is no mean feat. ‘Under the current Road Traffic Act,
the congestion charge is exempt from the range charges that we can pursue.’
The British Vehicle Rental and Leasing Association is already lobbying the
government to change the law so that its members aren’t penalised in this way.
With green issues suitably high on the agenda, and the car industry vilified
as a mass polluter, Scales warns that any plans to introduce road charging
schemes should be approached with caution.
‘The technology exists, but the goal should be revenue neutral for the driver
at worse. So a driver with a Ranger Rover, for example, who uses it once a week
should see cost savings over using it every day.’
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