So, what is the difference?
Fleet Management Organisations (FMO’s) provide a mix of operating leases, financial leases, novated leases and limited short-term leases/rentals while Car Rental Operators (CRO’s) provide mostly short-term rentals. Both organisations exist to generate profits for their shareholders albeit through different core competencies.
FMO’s primarily provide operating leases where they own the vehicles that are rented to clients over 2, 3, 4 and 5-year periods whilst CRO’s primarily provide short term rentals for periods of days or weeks for vehicles they own. This is where the similarity ends.
In addition to helping clients fund their vehicle assets FMO’s provide a range of services from strategic advice to operational reporting and controls for the vehicles they lease/rent. They assist clients to reduce operational costs through transparency, reduce administrative burdens and provide expert fleet knowledge.
FMO’s can be instrumental in assisting clients meet their work, health and safety obligations through timely maintenance of vehicles and initiating driver education programs. The best FMO’s help clients do more with less assets thereby freeing up resources to deliver their organisation goals.
CRO’s provide their clients with access to multiple numbers and types of vehicles to meet their needs. CRO’s own their vehicles and their fleet management skills are often limited to managing their fleet of rental vehicles which excludes involvement in their client’s work, health and safety obligations, strategic advice and driver education.
CRO’s are generally good at managing their own fleet but lack the necessary expert staff to assist their clients in managing their fleets – their core business is short-term rentals not assisting clients to manage their operational vehicle needs.
Why choose an FMO or a CRO?
A CRO is generally used for asset flexibility during busy times whilst FMO’s are an integral part of an organisations transportation/logistical solutions. Both types of organisations are generally professional and skilled at their core competencies. It’s a matter of understanding your needs and selecting the right type of organisation to fulfil them.
Mace Hartley is the Executive Director of the Australasian Fleet Management Association
