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Enterprise Rent-a-Car Moves Towards a Greener Business Model: Part 2

Jeff McIntire-Strasburg — Wed, 06 Feb 2008 16:58:18 +0000

Last week, I began to take a look at some of the environmental initiatives underway at St. Louis-based Enterprise Rent-a-Car (which also own National and Alamo). While my discussion with VP of Corporate Responsibility and Communications Pat Farrell, and VP of Public Relations Christine Conrad, involved all five of the current “planks” in the company’s environmental platform, we were there to focus on its most recent announcement: customers could now purchase carbon offsets when reserving a vehicle by phone, or through the company’s web site.

The offset program with Terrapass started just over a month ago, with the company officially announcing it on January 15th. To its surprise, the program gained popularity before the official announcement: after the soft launch on January 1st, an average of 1000 customers a day were buying the $1.25 offset option. I did ask Pat about the controversy surrounding offsets: was this simply a way to make drivers feel better about doing the things they always do? Are they simply green “indulgences?” He told me,

That’s why the offset program is the fifth of the five planks in our platform. I often equate offsets with ‘marking time’ or ‘marching in place’: you’re doing something, but not necessarily moving forward. So, if that’s all you’re doing, that would make me uncomfortable. If you’re using them in combination with other solutions, though, that makes sense.
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Enterprise Rent-a-Car Moves Towards a Greener Business Model: Part 1

Jeff McIntire-Strasburg — Fri, 01 Feb 2008 16:52:07 +0000

Last September, when discussing a new tool for vehicle fleet managers to determine the environmental impact of purchases, I made a quick reference to efforts by the rental car industry to “green” their fleets. At the time, I’d seen a number of press releases touting these efforts, particularly commitments to purchasing vehicles that produced lower levels of emissions. I remember thinking that I should reach out to St. Louis-based Enterprise Rent-a-Car to find out more about their efforts; unfortunately, thinking was as far as I got.

I got the chance to rectify that situation when I met with Pat Farrell, Enterprise’s VP of Corporate Responsibility and Communications, and Christine Conrad, VP of Public Relations, two weeks ago over lunch. While the focus of our discussion was the company’s new offering of carbon offsets (in partnership with Terrapass) to customers renting by phone or through the company’s website, Pat and Christine also wanted to discuss the range of environmental initiatives Enterprise had taken in recent years. These have included:

Greening its fleet: The company (which also includes National and Alamo) now owns 73,000 flex-fuel vehicles, and 4000 hybrids. Over 237,000 of its 1.1 million vehicles average at least 32 miles per gallon, and 264,000 have earned EPA Smartway certification.

Contributing to Biofuels Research: Last year, the Taylor Family, which owns the company, donated $25 million to create the Institute for Renewable Fuels at the Donald Danforth Plant Science Center.

Conservation Efforts: Enterprise’s charitable foundation has committed to plant 50 million trees over the next fifty years in partnership with the Arbor Day Foundation (though will not use these trees for offset credits)

Green Business Concepts: The Product Service System

Jeff McIntire-Strasburg — Fri, 27 Jul 2007 17:54:24 +0000

Have you ever rented a movie from a video store? Or stayed in a hotel room? Do you belong to a fitness club or gym? If you can answer "yes" to any of these questions (and you probably can), then you’ve paid money not for a product, but rather a service or benefit: enjoying a film, getting a good night’s sleep, or a killer set of abs. All of these businesses fall into the category of the "product service system," and while these examples are really common, many other companies are recognizing the earnings potential that exist for "renting" products rather than selling them outright.

So, why would we care about this on a green lifestyle site? Product service systems (PSS for short) can not only make businesses a lot of money; they can also force them to adopt greener business practices. If you own a video store, constantly having to replace DVDs isn’t in your financial interest: you get paid for a customer’s use of that product, so it’s to your benefit to make those discs last as long as possible. Similarly, a gym that constantly has to replace stationary bikes and treadmills isn’t going to be very profitable. The PSS makes reuse and recycling not just nice ideas for the environment; rather, they become critical to a company’s financial success.

A couple of weeks ago, Rodger Vistacion, the founder and CEO of iLetYou, wrote a post on the company’s blog about the PSS concept:

…most everyday activity involves a Product Service System. You don’t
own the roads you drive on, you don’t own the restaurant or parks you
eat in, and you don’t own the health club that you work out in. When
you take a vacation, luckily you don’t need your own airplane and you
can conveniently get all the comforts of home, transplanted into a new,
relaxing (maybe) environment. If you rent your home, apartment or car,
you’re even more ensconced in Product Service Systems.

A Product Service System also very accurately describes what rental
is. Generally, rental is defined as when you physically pay a fee to
generally own an item for a set period of time. The only really
difference is the fee (it’s simply lending and borrowing otherwise) and
some Product Service Systems use shared, aggregated renting when
appropriate. The two concepts are basicly identical - in many ways, the
exact same thing.

New companies are emerging to fully embrace this trend. Zipcar is a leader in cars, BagBorrowOrSteal in handbags and designer goods, and there are many more emerging examples.

He’s right — there are some very exciting applications of this concept that have significant environmental benefits in terms of reducing, reusing and recycling:

Interface, Inc.’s "Evergreen Carpet Leasing System" was revolutionary for the commercial floor covering industry: in this program, a customer pays for "floor covering service" rather than buying carpet or other coverings outright. The system has allowed Interface to focus on methods of reusing and recycling old floor covering, as well as maintaining it for as long as possible. If you haven’t reade Interface founder Ray Anderson’s Mid-Course Correction, it’s very inspiring! I can’t say for certain that this program still exists (having trouble finding anything on the Interface web sites).
SunEdison has brought this concept to solar power: rather than buying solar panels, commercial clients can enter intro a contract with the company and just buy the electricity produced at a set rate. SunEdison owns and maintains the equipment. CitizenRE wants to implement such a system for the residential market… we’re not sure that it will work, though.

These are just two examples — there are plenty more. Companies that keep ownership of their products have a real incentive to "keep it green"… and that’s a model we’d love to see more.

WorldChanging:Product-Service Scenarios for the Bright Green City

Treehugger: Eco-Tip: Product Service Systems

sustainablog: GM, Whole Foods Using ‘Solar Service System’ (please note: sustainablog is my personal sustainability blog.)

Amazon Link: Natural Capitalism: Creating the Next Industrial Revolution