Leasing: The service supported way for businesses to access eBikes

In this feature – part of the ‘what can we learn from the auto industry’ series, we hear from fleet and vehicle leasing specialist Arval, part of financial giant BNP Paribas. Here John Peters and Sarah McArthur along with UK cycling specialist partner Tim Hammond, from BikeFlex, outline the ‘business bike leasing’ model.

Sarah McArthur, Senior Communications Manager | Arval UK
Thanks for the introduction, Simon. Let’s open the conversation by outlining who Arval UK is, as well as giving an overview of our fleet and vehicle leasing business.

We are part of the BNP Paribas Group, which is a global financial services provider. Arval employs more than 8,000 people and has offices in 29 different countries. In the UK, our Head Office is in Swindon, and we’ve also got offices in Birmingham and Manchester; having around 700 UK employees in total. In the UK we’ve around 190,000 vehicles on fleet, primarily cars, but also vans. In the electrification space we see ourselves as a business which is leading the charge, with more than 38,000 electric vehicles, cars, and vans, on fleet – a significant, and growing, proportion of our total fleet.

In terms of our customer makeup, they range from some of the UK’s largest businesses right through to individuals. Customers can lease a car or a van direct from Arval, but they can also access either a car or a van through their employer so as company car or van, or through an initiative called salary sacrifice where employees can give up part of their salary in exchange for a car. We count big names like Vodafone, EDF, and AkzoNobel, also small businesses, and individuals, amongst our customers.

We’ve made strong progress with electric bike and e-cargo bike leasing, with customer arrangements accounting for around 5,000 bikes in Belgium, Germany and the Netherlands, we’re now introducing electric bike and electric cargo bike leasing – as well as cars and vans – in the UK, partnering with Tim Hammond at BikeFlex.

John Peters, Business Manage Financial Services, Fleet, Mobility Arval
Although eBike leasing is new for us in the UK, it’s not new for Arval. In other countries like Belgium, Germany and the Netherlands, it’s a very established product. In the UK we’ve built a partnership with Tim and BikeFlex, enabling us to introduce leasing into the UK market.

Picking up on a few things Sarah mentioned, at Arval UK we see EV, including eBikes, as a fundamental part of our energy transition. It’s one way in which we can help our customers transition to a low carbon economy. As a business we want to innovate, so some of the things we’re going to talk about, we are leading the way in the UK, especially with how we do eBike leasing.

We view things like last mile delivery as fundamentally important to our clients, and a great opportunity for Arval customers, where we can bring skills, value, and expertise. We can make an impact on the marketplace.

Tim Hammond, Co-Founder, BikeFlex
Yeah, I’d just say I think one of the big features Arval mentioned at the eBike Summit was about the right vehicle for the right journey. You’ve both mentioned that where you’ve got cars and vans, eBikes and eCargo bikes can complement them, particularly for those shorter journeys. And it’s not just about deliveries. Whilst the industry initially focused on last mile deliveries, we’re now talking with people about company fleet vehicles.

As Arval clients have company cars via fleet leasing, perhaps they add some company eBikes alongside the company cars. As far as BikeFlex is concerned, working with Arval, as a partner, we can get closer to the automotive industry – they understand about getting volumes into businesses and we’re very much seeing that, with a multimodal mobility strategy, being successfully implemented elsewhere on continental Europe. It’s time this is introduced in the UK.

John Peters
So as Tim and Sarah were outlining, our approach is that customers should be able to access a range of vehicles, whether it’s cars, vans, electric bikes; as Tim mentioned, it’s broader than just last mile delivery – it’s about ‘selecting the right tool for the right job’. Here we’re seeing clients’ requests shifting, to reflect the advent of clean air zones (ULEZ), of legislation to reduce carbon emissions and improve air quality.

That there’s more complexity now, with a host of factors to consider, means that, with partners like BikeFlex, Arval can promote and deliver the right blend of
solutions. BikeFlex gives us that bike specific knowledge and experience. Arval brings vehicle and fleet management experience, where leasing is paired with servicing and maintenance scheduling.

BUY OR LEASE?
We are noticing a lot of eBikes are becoming more sophisticated, and higher in value. I think that then lends itself to a conversation with clients around ‘do they want to deploy their own capital to invest in a significant number of assets (cars, vans, bikes) at a high upfront cost’? It’s here that leasing can really start to add value, rather than purchasing out right – freeing up substantial capital, whilst taking care of the in-service (daily use) management of the asset (vehicle servicing and maintenance to avoid down time). Maintenance
packages need to be put together. BikeFlex takes care of all of this for Arval clients with eBikes.

It all needs to be brought together, in the same way we manage fleets, manage the expectations of larger businesses. That’s where we see we can add the value because you’ve got customers who want to use the right kind of financing, they have a wide variety of different asset types (cars and vans, both ICE and EV, and now eBike). All these asset types need to be brought together under one management. Here’s the Arval sweet spot.

BUSINESS USER NEEDS, WANTS AND EXPECTATIONS

Tim Hammond
One of the things we’ve found over the last few months, echoing what John and Sarah have been saying, is that by supplementing existing Arval customer fleets, where a business already has cars on lease, there are a host of client case studies already in the early stages of being developed.

As just one example, let’s take estate agents: Large or small, groups of estate agents will lease cars, applying their branding. These are an essential business tool. In that context, downtime – being off the road – has a business cost attached to it. Fleet management means the estate agents themselves don’t book servicing, drive the car to a dealership, collect a courtesy car (as you would when a private owner of a vehicle).

Leasing, as part of a fleet management programme is all about taking the hassle away, hence a fully managed lease is something really important to businesses. Now add eBikes into this fleet vehicle blend; you’ve got use cases where eBikes, just like any other vehicles on fleet, are in daily use as a company tool, as a workhorse.

We’ve got estate and letting agents, property management businesses, GPs and paramedics on eBikes. As with any business environment, avoiding downtime is so important. With
the eBike offering this means a fully managed, serviced at the business premises, wrapped into the lease deal, making this a hassle-free service for users.

WHERE BUSINESSES GO, PRIVATE SALES WILL FOLLOW
There’ll come a point, in the not-too-distant future, where we can share those same attributes of leasing with private owners, delivered with bike shop partners. Here is where I see significant bicycle retailer opportunity, to win new customers, increasing the total number of people on bikes.

When we look at eBikes, and some UK specific market challenges, barriers to winning new customers – people who don’t call themselves cyclists who just want to use a more journey appropriate vehicle, be that an EV with two wheels, three wheels, or four, one of the bigger barriers is price point. With eCargo bikes customers can easily find themselves looking at between £5,000 and £8,000, at the moment. As people rightly point out, that’s car or motorcycle money.

ENABLING THE BUYING OF THE RIGHT VEHICLE FOR THE RIGHT JOURNEY
Thinking ‘price point’, I have a colleague who’s currently doing secret shopper visits at motorcycle dealers. In that environment there’s no discussion around, ‘that’s £8,000, please, how would you like to pay?’. It’s, ‘this is £XXXX as a deposit, with £XXX per month on a 2-year or 3- year term, with full-service support, and the option, at the end of lease, regarding how you want to go forward’. It’s a totally different conversation.

With leasing entering the cycling marketplace, what I see is scope for significant new ‘cycling as transport’ growth (and, as a biproduct, cycling as recreational sport, although N+1 riders aren’t the primary focal point here). Where leasing is ‘renting’, and cars have been sold this way for four decades, why would we – the cycling industry – not embrace a model that is familiar to the very users we’re seeking as new customers: Car owners looking for a new form of, journey appropriate, transport?

LIFETIME VALUE OF CUSTOMER 2.0 
Fully service supported packaged lease agreements offer both business and customer confidence, assurance, and continuity. To maximise on this the fleet/lease manager plays a critical role; that of a customer success manager – ensuring current and future serviceability, through ownership support, which ultimately ensures post lease owning of
an asset for resale. The current customer benefits from the attentiveness, the lease provider benefits from this, and the future, ‘used approved’ customer also benefits from this.
BikeFlex and Arval UK sponsored the Sustainability Award at the Negotiator Conference on 24th November, providing estate agency professionals with an opportunity to explore the eBikes. Brands on show included Brompton with its electric model, and Advanced with its Reco carbon frame eBike.

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