Interview: David Brennan, CEO, Nexus Vehicle Rental
Uncertain economic conditions are driving a booming rental market in the UK. And Nexus Vehicle Rental CEO, David Brennan, reckons it’s signs of a new way of thinking about fleet. By Alex Grant.
Whether it’s hailing a cab, scheduling grocery deliveries, or downloading an album for the drive home, apps have transformed consumer expectations of convenience. Expectations which Nexus Vehicle Rental CEO, David Brennan, thinks should be just as applicable when it comes to fleets.
Founded 18 years ago as a corporate vehicle rental supplier, the Leeds-based company has evolved into a fully-fledged mobility provider, underpinned by its own, adaptable, technology platform called Iris. It’s a straightforward, effective offer; businesses come to Nexus with a mobility need, from motorbikes to specialist plant machinery, and Iris searches through rental suppliers to find the right tools for the job.
Always being able to say ‘yes’ to customers is paying dividends. Brennan claims “double digit” percentage increases in revenue and profit for the last four years, with its largest rise expected in 2018. Of its 1,000 customers – now including credit hire and leasing companies – 700 use the system daily and, with a £1bn UK market to chase, he sees plenty of room to grow.
“The economy is in great shape, but we are sat here with this uncertain period that we need to get through, and every day you open the paper it’s a different story,” he says. “As a business, are you planning for growth? If you’re a FTSE100 company, when things are uncertain you need flexibility, and rental is a strong product in that environment.”
In part, that’s because businesses are changing how they operate. Home working and a focus on minimising fixed costs, including headcount, are both suited to renting, and reflected by longer terms: “There is a trend for finance directors to want more flexibility in cost base. They’re increasing variable cost, but taking fixed cost down, as that means they can react quickly if their business changes. If you go back ten years ago people bought or leased, and they rented occasionally. Now they buy, rent and lease.
“So I think more and more corporates are being cautious about headcount growth, but there are some very positive points on the other side. You’ve got more people delivering products to homes, and more businesses are wanting delivery vehicles. More people are buying or renting vans than ever before because of that environment.”
The spectrum of vehicles on offer is also changing. Nexus launched its first HGV product last year, having liaised with customers to build the required compliance module into Iris. Rolled out primarily with existing customers, it’s starting to bring HGV-only business into the fold and is expected to be a significant contributor to ongoing growth.
But, he stresses, it’s not just about volume. Nexus has a 97% customer retention rate, which Brennan attributes not only to being able to source the right vehicles conveniently, but by using data to help customers operate more efficiently. A large part of its volume growth comes from taking a larger share of clients’ mobility needs.
“A lot of clients come on board with 500 vehicles on rent, across 20 locations, and we say, do you need all these? We can give a view of the country and say, in our opinion, they don’t need 500 they need 350. We’re not focused on renting the most cars, that’s not our business model. We’ll use our technology to make this category work at its best.”
Which includes the platform itself; a new version of Iris is due before the end of 2018, steered (as smaller updates have been) by customer demands, including development of the electric and hybrid booking modules and streamlining international bookings, as well as by benchmarking the user experience of consumer apps.
“We see ourselves as a technology platform set up to work in [the Mobility-as-a-Service] ecosystem for the next 20-30 years, as it develops,” Brennan says. “The question is, how quickly does this market transition from today, with a lot of owning and renting and leasing, into a more a subscription-type business model? So, utilising assets where you need them and paying for the mileage or time, or a contract where you pay per day, month, or week. Our business is a platform which fulfils that mobility requirement.”