Within a sharing offer, a credit balance can be acquired by using the contingent feature. This balance can for example be used to book business trips or to provide a budget for private trips as an incentive or reward for employees. This way, sharing providers gain liquidity and also strengthen their customer loyalty, for instance toward corporate customers.
What Is A Contingent?
A contingent is a credit that is paid in advance and can be used for costs within a sharing offer. This credit is not purchased by individual drivers, but by the administrator for all drivers within a service. The administrator also decides whether and to what extent a monthly budget is available to the individual drivers.
When the contingency feature is activated, a validity period is also determined and thus the point in time at which unused credit expires.
Usage Examples Of The Contingent Feature
The most common use of contingents is in the corporate environment. Therefore, we describe the feature below primarily using this example - although other use cases are of course also imaginable.
Note:
Even in the corporate example, different scenarios are possible.
Scenario 1) The company itself operates the sharing service and owns its own vehicles, which it provides to its employees. In this case, the actual payment of the contingent may be obsolete. The feature is then primarily an opportunity to grant employees a monthly budget for private use.
Companies can thus purchase any contingent and use the purchased credit for various purposes. The credit can be used both for all costs incurred as well as exclusively for business trips. Depending on the settings of the sharing provider (in scenario 2), the company may benefit from a discount due to the prepayment and hence from discounted business trips.
Furthermore, individual employees of the company can be provided with a certain monthly budget, which is settled via the contingent. This option can constitute a performance incentive and is in many countries considered a tax-free contribution to material costs.
How do discounts work and when are they useful?
Sharing providers can grant operators of individual offers, in our example a company, a discount on the purchase of credits. In this way, they receive a contingent in the desired volume, but pay a lower amount for it. In this way, they are encouraged to purchase credit, which represents a secure income and increased liquidity for the provider. At the same time, the risk of not using up all the credit purchased by the end of the validity period is minimized. With a discount of 100%, a sharing provider can also provide free credit - this could make sense, for example, if the provider is the company itself (see scenario 1 above).
Advantages For Providers And Users
The feature is not exclusively limited to companies, but can also be used in various other use cases. Sharing offers are given more freedom in terms of designing the offer and pricing and, thanks to the feature, are able to offer their users budgets which they can manage directly and easily via the system.
The drivers themselves are happy about simplified payment methods, either by booking all business trips directly via the credit or by possibly having a budget available for private trips as well.
But the use of the contingent feature is also attractive for sharing providers (see scenario 2 above) themselves. Not only do they increase their user satisfaction with the newly gained options or even gain new user groups such as individual companies that require such an option. But they also benefit financially with improved liquidity and profitability. After all, they receive the revenue from the sale of credit regardless of whether the quota is actually used and completely consumed afterwards.
What Providers Say
“We find the contingent feature to be useful in providing businesses with a way to administer their mobility budget in a predictable manner. The ability to prepay for mobility is a flexible way for businesses and their employees to access car sharing services. As a provider we look forward to explore this feature further, also as a marketing tool, to offer discounts when purchasing contingents, etc.”
Haakon Hals, Marketing Chief of the Norwegian provider Bilkollektivet
More Design Freedom Through Contingents
The contingent feature gives the operators of a sharing offer more creative freedom by covering further use cases and individually selecting certain settings (e.g. discounts, duration, monthly budgets...). As a sharing provider, you can thus offer your corporate customers a financial advantage and strengthen the relationship. You yourself get higher financial planning security due to the stable cash flow. As a company, you can thank your employees for their work with monthly budgets.
Receive more information about the feature in our Academy or through your customer support.
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