Businesses shy away from traditional car hire firms

Many motorists are turning to new schemes such as pay-as-you-go car clubs, as businesses suffering from the recession cut back their company’s fleets.

Streetcar is one such company which offers cars for hire in seven cities and has announced yesterday that it has a membership of about 75,000.

Over 2,000 businesses are registered members of the club which was first launched in 2004 by Brett Akker and Andrew Valentine after they read about a similar programme in the United States.

The club aims to have 250,000 members by 2012 and has tripled turnover in the past two years to £19 million.

Corporate clients of the pay-as-you-go scheme include Kellogg’s and Eurostar, as well as local government authorities including the Surrey County Council.  Members pay an annual fee for a smart card that provides access to parked cars that are rented by the hour.

Last month, Whizzgo was taken over by rival City Car Club for approximately £5 million.  The deal gave City Car Club the largest network in the UK, as WhizzGo was particularly strong in northern locations including Manchester and Leeds.

The increase in growth of car clubs has been thought to be causing concern to traditional car hire operators, many of whom have started their own pay-as-you-go schemes.

Hertz, one of the world’s largest car hire firms, has launched their own car share programme, called ‘Connect by Hertz’ which offers the service in New York City, Paris and London.

A Streetcar spokeswoman said that they have noticed an increase in the average length of journeys taken by them membership; over the summer there were over 5,000 journeys that averaged just under 1,000 miles a trip, which is evident that Streetcar was giving traditional car hirers a run for their money.