Article in Herald Sun
25 March 2016
RON Santiago started as a car washer at a Miami Beach car rental store 29 years ago, and he doesn’t think
the industry has changed much since then.
Which is why the managing director of Europcar in Australia thinks his own company needs to be leading
an industry shake-up to better realise the sector’s potential.
“A little bit of the technology has advanced, but it hasn’t advanced at the rate at lets say the airline industry
or even supermarkets with self-service — so we are a bit behind so we need to catch up,” he tells Business
Mr Santiago has a plan for how Australia needs to develop and he says it is simply “about getting rid of the
queues”. And central to that is using technology to sharpen customer service.
Later this year, Europcar Australia will launch an app that will allow customers to do everything from book
their rental to unlock the car.
The test app was demonstrated to the company’s 100 top employees at a forum at the RACV club in
Torquay last month.
“Fingers crossed we will pilot in the next few months with some friendly frequent renters, we’ll say ‘just
download this app, use it while you are travelling and give us some feedback’,” Mr Santiago says.
If it goes well, he would like to see the innovation exported to other Europcar offices worldwide.
Estimations by IBISWorld put revenue for the sector in Australia at $1 billion a year.
Avis and Hertz have long been dominant but, when Europcar realised the potential, it took back control of
Australian operations about eight years ago. Under the previous franchise model, it was bleeding $1 million
a month, under Mr Santiago it is now turning a profit.
“We are still new in the market our competitors have been in the market for 50 to 60 years,” he says.
Growing up in North Miami, Mr Santiago rose through the ranks at Alamo Car Rentals, where he started in
the car wash at 16 years of age (“a lot of Chevrolets”), to help pay the family mortgage.
He saw it as a promotion from previous jobs such as swimming for golf balls at the local golf club, mowing
lawns and delivering papers.
Mr Santiago’s promotion to renting cars between midnight to 9am at Miami airport, and then to work in
Europe blindsided a young man who had never owned a passport.
It was in the car wash that he saw the basics of the sector — give quality service and produce ancillary
revenue through upselling.
In Australia, Europcar is renting out a lot of “bread-and-butter” Toyota Corollas but little SUVs are also
becoming popular. Mr Santiago says the industry hasn’t yet faced an Uber-style interloper that challenges
its entire revenue base.
“I think there is the risk of it, but I think the benefit we have is that we have the infrastructure, we have the
He also points to the “Europcar Lab” in Paris which is focused on being a “mobility service provider”
which he explains is basically to “find a way to break the current car rental model and reinvent car rental
into the new way it needs to be in the future”.
Mr Santiago says the company mainly focuses on leisure rentals but is increasing its presence in the
business rental market — a key victory was winning the federal government car rental contract two years
Other innovations have been winning customer trust, including being the only company to install cameras
to take digital images of cars as they come and go from airports — to help identify if scratches happen on
“We thought the customers at first might be wary — it looks like a robot — but they like it as they trust it
and they can feel more confident,” Mr Santiago says.
He has also introduced the “net promoter score” satisfaction ranking — used by the likes of Telstra and the
big banks — to drive staff engagement.
Mr Santiago says keeping an eye on social media is the quickest way to see how much cut-through the
company is getting. Word of mouth is crucial, particularly with cashed up millennials born between 1980
and the 2000s.
But he says the real growth is with the “very attractive” option Australia offers as a destination for the
growing economic position of Asian travellers.
“That is Chinese, Singaporean, Malaysian all of them,” Mr Santiago says. “A big thing on the bucket list is
come to Australia.”
Figures from Tourism Research Australia showed that, in 2015, there was a 21 per cent rise in Chinese
visitors, 18 per cent rise in Indian visitors and even a 10 per cent rise in US visitors. In the last 10 years,
Chinese visitors have increased their spend from $900 million to $6.2 billion.
Mr Santiago says the change from large-scale bus tours to individuals curating their own trips to iconic
areas such as the Great Ocean Road and Yarra Valley has begun already.
“You have a lot of children here studying and when the parents are here they want to impress, so they
might want to rent a nicer car or a larger car.”
But he says Australia also has a lot to learn from our cousins across the Tasman. New Zealand leads the
way in encouraging driving holidays touring gourmet regions and trendy nature destinations.