Transport CommitteeWritten evidence from Enterprise Rent-A-Car

1. Overview

This paper has been prepared by Enterprise Rent-A-Car in response to the Transport Select Committee’s ongoing inquiry into road safety. Whilst Enterprise supports the Government’s recently published Road Safety Strategy in general, this submission highlights our concerns about the road safety implications of the age discrimination provisions in the Equality Act 2010.

The Equality Act, which received Royal Assent in April 2010, aims to make any discrimination by age unlawful in the provision of goods, facilities and services. Enterprise welcomes the Government’s vision of creating a fair society with fair chances for everyone and to ensure that we can tackle inequality and root out unjustifiable discrimination. However, we have concerns that the implementation of this Act will compromise the UK’s excellent road safety record, in contradiction to the stated aims of the Road Safety Strategy to reduce deaths and injuries from traffic accidents amongst this age group. We encourage the Government to ensure that there are sufficient safeguards in place to protect younger drivers from putting their own and other road users’ lives in danger.

2. Renting Vehicles to Under-23 year olds—Risk and Road Safety

At present, Enterprise does not rent vehicles to under-23 year olds though our retail branches. Some of our competitors take a more stringent approach and place restrictions on drivers aged 25 and under. Enterprise’s decision not to rent cars to those under the age of 23 is based on comprehensive insurance data and risk analysis which tells us that young drivers are far more likely to be involved an accident when using rental vehicles. The ABI’s report, “Young Drivers: Reducing Deaths on the Roads”, clearly demonstrates that 17–20 year old males are five times more likely to involved in an accident than 30–59 year olds, and almost ten times more likely to be killed or seriously injured than more experienced drivers. Road collisions are the leading cause of death for young adults aged 15–24, and account for a quarter of deaths in the 15–19 age group.

Research by the Department for Transport and the Institute of Advanced Motoring has shown that younger drivers are far more likely to have a contributory risk factor for causing an accident than drivers aged 25–69, and that younger drives pose a high road safety risk than other road users. Some of these factors stem from a lack of experience on the road, such as a poor appreciation of road conditions and a lack of understanding about how to adapt their driving style when necessary, and so it could be argued that these risk factors apply equally to older drivers who have recently passed their test. However, risk factors associated with a lack of experience account for only one third of accidents involving young drivers. Poor attitudes and peer pressure among many younger drivers leads to anti-social road behaviour, such as speeding, competitive or aggressive driving, and a lack of concentration due to in-car entertainment and distracting passengers. These behaviours are less of a factor for new drivers that pass their test later in life.

Whilst many of the risk and behaviour factors outlined above exist regardless of whether the car that is being driven is privately owned or a rental vehicle, there are additional considerations that make journeys by young drivers in hire cars especially risky. As rented cars are returned at the end of the hire period, they are often not treated with the same care and attention that a young driver might show their own vehicle. Indeed, the British Vehicle Rental and Leasing Association (BVRLA), of which Enterprise is a member, has published research showing that, when renting to drivers under 25, incidents such as damage or accidents occur in one out of every 49 rentals for the 17–25 age group, compared to one in every 73 rentals overall. Forcing rental companies to provide cars to younger drivers will therefore result in many road journeys being made in a far more dangerous manner than would otherwise be the case. This not only increases the risk to the driver and passengers, but, also creates the potential for more damage to third parties and more accidents involving other drivers and pedestrians.

The Strategy Framework for Road Safety, published in May 2011, makes a reduction in deaths and accidents caused by young drivers a priority. It also states that policy in this area should be driven upon cost-benefit analysis, including the impact on businesses. By forcing rental companies to rent to drivers who, based on actuarial estimates, are statistically more likely to be involved in accidents, the Government is in danger of undermining the good work that has been done in reducing accidents among young adults and the principle that local citizens and service providers should have a greater role in delivering safer roads.

3. Proposed Solutions: Neither Proportionate Nor Practical

The Government has suggested that while rental companies would no longer be able to make age based judgements when deciding which customers to rent vehicles to, it would consider other practices as a proportionate response in meeting the challenge of the extra risk and costs associated with younger drivers. These other practices include requiring a minimum level of driving experience to rent a car, not renting cars to people with motoring convictions or who have had accidents within a certain time period, and charging higher excesses to people in age groups that are statistically more likely to have accidents in order to reflect higher premiums and the cost of repair.

However, all of these suggestions are impractical and would not address the road safety concerns outlined above. Requiring a minimum level of driving experience would not itself remove the extra risk associated with renting to younger drivers, as it has been demonstrated that a lack of driving experience is only one factor in understanding why under-23 year olds are statistically more likely to be involved in an accident. In addition, adopting a policy of not renting to people with motoring convictions, points on their license, or those who have already been involved in accidents would still not serve to address the higher statistical likelihood of a younger diver having an accident, not to mention the considerable impact this is likely to have on further pushing up ever increasing insurance premiums.

4. Solution for the Rental Sector

Enterprise Rent-A-Car welcome the Transport Select Committee’s report into motor insurance which made recommendations for the Government to urgently consult on measures to make the driving test more rigorous as well as ensure that young drivers are fully trained before they are licensed as a means to help improve road safety. However, in order to address the concerns outlined above, we would also like to see the rental industry given the same opt-out of the age related provisions of the Equality Act to that which has been proposed for the financial services industry, in recognition of the statistical likelihood that younger drivers will be involved in accidents. While market forces currently do allow under-23 year olds to access rental vehicles, the industry should be given the flexibility it currently has to make legitimate, risk based decisions about which age group they can most effectively target while working to deliver safer roads for all road users.

5. About Enterprise Rent-A-Car

Enterprise Rent-A-Car was founded in 1957 and is an industry leading, multi-national company with approximately one million vehicles in its global rental fleet and an annual turnover of more than $12bn. In the UK its current rental fleet is approximately 60,000, which makes it the largest car rental company as well as the biggest purchaser of vehicles in the country. Enterprise employs 3,400 people in the UK across 360 offices and branches—more sites than any other rental company.

January 2012

Prepared 18th July 2012