LeasePlan is in the midst of implementing a multi-faceted plan to completely transform the company, whose key strategic imperatives are:
- Providing flexible mobility solutions, including becoming a mobility management and services hub for its clients’ fleets, such as its recently announced partnership with Lyft Business.
- Accelerating the rollout of digital solutions for its clients and implementing the recently announced Digital LeasePlan initiative.
- Embracing zero-emission vehicles. Lease Plan is one of the 10 founding members of the EV100 global initiative committed to accelerating the transition to EVs.
To get an update on the progress of LeasePlan’s business transformation process, AF interviewed Felipe Smolka, executive VP and transformation leader for LeasePlan USA, and Jeff Schlesinger, president and CEO of LeasePlan USA.
AF: It’s been a year since we last spoke about LeasePlan USA’s road to business transformation. What have you accomplished in the past year?
Schlesinger: During the past year, we hired a completely new leadership team at LeasePlan USA that is focused on how the company will transform itself. We have embarked on a simultaneous short-term and long-term transformation roadmap. The focus of the short-term transformation is satisfying customers’ needs on a day-to-day basis, while concurrently developing a long-term transformation plan.
LeasePlan is very much committed to both the digital and the electric vehicle future. We’re one of the original founders of the EV100 initiative, the only fleet management company in the world that is participating. We’ve committed from a U.S. and global perspective to transition our employee fleet to electric vehicles by 2021. Our CEO, Tex Gunning, has announced we’d like to have our entire global portfolio of vehicles be net zero emissions by 2030.
AF: That’s a very ambitious goal, especially since you are looking to accomplish it within three to four purchasing cycles.
Schlesinger: We know it’s an ambitious target, but at the same time climate change is a key challenge that we must all work to address.
AF: You recently made another significant announcement of your partnership with Lyft Business. How will this partnership work?
Smolka: This is a very big step for us in terms of fleet and how we partner with mobility companies. It’s about having better visibility of the total cost of ownership and giving drivers and employees options while they are out on the road. This is a first of a kind.
A year ago, LeasePlan partnered with Uber in Europe to assist Uber drivers in acquiring vehicles. The U.S. relationship with Lyft is different. With our Lyft partnership, we’re helping our customers to have an extension into traveled miles by their employees instead of just driven miles. This is a big paradigm shift and an incredible step in the right direction.
AF: On average, fleet management companies interact with 10 to 20% of a client’s employee base who are eligible to receive a company-provided vehicle. Does this partnership with Lyft extend LeasePlan’s reach to the other 80% of employees who have transportation needs that don’t require a company vehicle?
Smolka: Our partnership with Lyft is a great solution for both groups, and we look forward to continuing to create a more seamless transportation experience for as many people as possible.With people who are eligible for company vehicles, these employees are travelers who need other mobility options when they travel to other cities or when their vehicle is being serviced — in addition to being company drivers. How do you manage these mobility options so a fleet manager can manage the total traveled miles instead of only driven miles? This involves extending corporate policy and expense management to total traveled miles. We have a mobile app for drivers called MyLeasePlan. In the app, users can tap “Book a Lyft” to assure the client’s business account is translated into the Lyft app. From there, the user goes through the normal steps to hail a Lyft driver.
Schlesinger: Connecting to the Lyft app using MyLeasePlan gives a line of sight to the fleet manager to manage their total traveled miles. It’s very similar to how fuel cards are managed when an employee buys fuel at a gas station. The fuel purchase is tracked within the LeasePlan servers that a fleet manager can access. Instead of a fuel card, it’s a Lyft card under the MyLeasePlan app. The fleet manager can see the spend when an employee is traveling using a ride-hailing service.
AF: You also recently introduced another new partnership with MileIQ. Can you describe its function?
Smolka: MileIQ is a Microsoft subsidiary that offers a very unique app that automatically understands when a vehicle trip starts and ends. Within an amazing plethora of features, the app allows drivers to categorize and submit their trips at the end of a period to a cloud system, where we can aggregate this information at a company level and provide information and insight to the fleet. The product is geared for employees who don’t have a company vehicle and instead use their own vehicles to do their job and get reimbursed for the expense.
This is a very strategic partnership that gives LeasePlan the ability to consolidate and aggregate information about business miles driven. It tracks miles driven in a private car, with the capability to categorize those trips as either personal or business-related trips. We can then consolidate this information, and offer reporting and analytics to provide actionable insights for fleet managers to better control the cost of reimbursing employees.
Schlesinger: For employees who drive personal vehicles for work purposes, tracking mileage for reimbursement has always been a major headache. They go through their calendars and see what trips they need to expense.
Using MileIQ, every route is captured automatically, without having to manually start or stop the app. At the end of every day, users open the app on their smartphone and see that MileIQ has captured each individual trip. Then all is needed is a simple swipe to the left for personal drives or to the right for business. Once each drive has been classified, all business trips can be sent to the cloud for storing on an individual basis. The data for personal trips, such as start and end location, remain private to the user and only the aggregate total business miles for the day are reported to LeasePlan. When they swipe that it’s a personal trip, the only data reported back to us about personal trips is an aggregate number of miles for the day.
From a reimbursement perspective, there’s no guessing how many miles were business and how many miles were personal. It’s easy to use and helps fleets better manage costs, as well as how they reimburse employees who drive personal vehicles for business.
AF: In the first half of 2017, LeasePlan rolled out its “Power of One LeasePlan” operational initiative to leverage the strength of its 32 organizations across all LeasePlan countries. Recently, you rolled out an extension to this initiative called “Digital LeasePlan.” Could you explain the goal of this new initiative?
Schlesinger: Digitization is one of the three key mega trends we are addressing, and we’re looking to the future to see how we can best digitize all aspects of the mobility experience. Ultimately, we are looking to deliver digital services at digital cost levels supported by the latest digital intelligence technologies. We know that the digital age is here and it’s just going to get bigger, broader, and we have to get ahead of it. To give you some examples, last November, we created a partnership with MapAnything. Under this service agreement, fleet clients have access to MapAnything’s advanced telematics and field productivity solutions through its Salesforce.com integration. In addition, we have mobility relationships with Uber and Lyft. We recently announced a significant safety program with eDriving, and we are constantly looking to increase our digital portfolio. These relationships didn’t exist when I joined a year ago; today, they’re our strategic partners.
AF: What are some of the strategic imperatives of the Digital LeasePlan initiative?
Schlesinger: We’re looking at everything from AI to algorithms to deep learning. As an example of a specific focus area, we are looking to enhance digital engagement with our customers. A fully digitized business model will also prepare us for when autonomous fleet management becomes mainstream. This whole Digital initiative is supported by our Digital Hub in Amsterdam.
Smolka: One of our strategic imperatives is that information is a strategic asset for LeasePlan. This new information architecture underpins that strategy going forward. It will give us an opportunity to create more customized services that offer more actionable insights for our customers. This is core for us as we move forward to the next stage of LeasePlan. This is happening globally, which allows us to learn from other markets and gain efficiencies through this process. LeasePlan is now working as one unit globally, and the United States is part of it.
AF: What is the progress of LeasePlan’s electrification initiative in the U.S. market?
Smolka: There continues to be strong government support. The Clean Air Act in California is going full force and, currently, 13 states and the District of Columbia have adopted California’s vehicle emission standards.
Worldwide, 50% of the vehicles on the road are owned by businesses. We have a huge responsibility in making electrification happen, especially when approximately a third of all CO2 emissions in the United States are coming from the road transportation sector.
Another next big hurdle is expanding the infrastructure for charging stations. LeasePlan USA will be installing charging stations at our two offices. We just agreed to put in 20 charging stations in Alpharetta. That’s going to happen. We’re going to put in charging stations in our Rolling Meadows location as well. Once the infrastructure catches up with what the OEMs will be producing, which I think will occur in five years, we’ll have a much greater number of EVs on the road than we have today.
AF: Where do you see LeasePlan being in five years?
Schlesinger: LeasePlan is the leading global fleet provider that has over 50 years of heritage. And we have a leader in Tex Gunning who’s a visionary. Today, LeasePlan is undergoing a transformation that aims to put us at the forefront of the three key megatrends.
We believe the future of mobility is digital, on-demand and sustainable.