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The Car Hire Industry; Utilising Technology To Combat Higher Taxes

Jun 26, 2008
The service provided by car hire companies is a valuable and affordable one for travellers. The relative affordability of car hire means that many are provided with a travel solution that enables them to travel at their own pace and leisure. Unfortunately for the industry in general there are a number of challenges that are becoming apparent that not only jeopardise the operations of the industry, but its very survival.

In a current climate of extortionate financial bills and resources, combined with a criminal fraternity that is becoming evermore organised, the car hire industry must pursue a course of action that will safeguard fleets and secure operations for the years to come.

Car hire firms are at the moment facing some of the highest taxes they have ever faced. While the travel industry as a whole has experienced large profits, this has not gone unnoticed by governments and regional bodies who are currently trying to impose heavy taxes on companies to take advantage of these higher profits. Some have even described the car hire industry as a tax magnet; many councils use the high taxes to pour money into municipal projects and regeneration efforts. The most startling evidence of this heavy taxation was in Dallas where the local car hire firms were charged an added five percent tax on their takings to directly pay for the new Cowboys American football stadium.

Taxes are so easily levied upon car hire companies and customers due to the fact that predominantly the people who use the services are from out of town and hence do not vote in the local elections. Because of this, local officials have no qualms with imposing these high taxes as the recipients of the taxes will have no say in the election of officials. Subsequently, officials will follow this type of policy as it will not hit the pockets of local residents and hence will be extremely popular.

It is not just regional bodies that are jeopardising the car hire industry, organised crime has been a concern for many years but as their methods have become more advanced, it is down to the companies to improve their security measures, utilising evermore advanced pieces of technology. One of the most widespread security measures in the industry has been the adoption of GPS devices in many fleets.

These devices allowing the tracking of any particular vehicle wherever they are has meant that companies can now monitor their vehicles, even when they are out of the lot. Information on whether the vehicle is speeding and how it is being driven in general means that firms have up to date knowledge of how their vehicles are being treated. In addition to this however, GPS provisions mean that if a car is stolen, the tracking and eventual recovery of any particular vehicle is made that much easier.

As well as GPS technology, the car hire industry has been increasingly trialling bio-metric data systems in their hire procedures. The most recent example of this was in Stansted Airport where a number of companies chose to place a thumbprint reader on their desks. By making sure that everyone who hires a car registers a digital fingerprint, the firms had a safeguard if the car was stolen. Customers were understandably concerned about giving their personal information to the company but for company executives it is a necessary evil for the safeguarding of their fleets.

In an increasingly costly age it is understandable that car hire companies are attempting to secure their assets by incorporating technologically advanced solutions. If they must pay higher taxes, to maintain profitability they must try to eliminate instances of theft and damage. By doing this they can recoup their losses from taxes and maintain healthy profits.
About the Author
Industry expert Thomas Pretty looks into ways in which the car hire industry is tackling the problems it faces.
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