The rental car industry has proven to be resilient in recent years, resisting global bottlenecks, supply chain issues and changing consumer demands. It is a mature industry that continues to survive recessions and adapt to a changing mobility landscape. Despite the challenges of the pandemic, car rental companies have recorded notable victories and achievements.
To start with, Europcar began to offer an interaction-free car rental process that allows customers to collect their own vehicle key to begin the rental. Enterprise has also focused on the rental experience by making it easier for customers to extend their rental through the Enterprise app. At the same time, they have also partnered with Microsoft to add connected car technology to their fleet, which will provide Enterprise with vehicle data and insights to learn more about their customers’ behavior and needs. Meanwhile, Sixt began to collaborate with Mobileye in the field of autonomous vehicles with a driverless taxi driver.
Suffice to say that the car rental industry continues to grow and adapt to the challenges they are currently facing. But for now, those challenges are far from over, and the way customers rent cars will be different for at least a few years. Chip shortages, labor shortages, and vehicle shortages are forcing people to get creative with their travel needs, with some even renting U-Hauls for recreational travel. As the demand for car rental continues to grow, so does the demand for other forms of mobility such as carsharing. In fact, carsharing is going to be the new frontier for the car rental industry.
Car rental companies have already realized the importance of adapting to the needs of consumers, and many of them are embracing new mobility options by investing in a mobility start-up or launching their own mobility service. shared. Either way, car rental companies have broadened the scope of their core business to include new mobility options in their portfolio of services. The last time we looked at this topic, we assessed how Enterprise, Hertz, Avis Budget Group, Sixt and Europcar were actively participating in the shared mobility technology space. Although growth has been slower in recent years, there are still some notable updates from these car rental companies:
- Business – In addition to the previously mentioned milestones, Enterprise has succeeded in maintaining current business models such as Enterprise CarShare and CarClub to be a consistent service for its customers.
- Hertz – Hertz unfortunately did not withstand the pandemic very well, declaring bankruptcy. However, that doesn’t mean that we won’t see a change with new leadership in the years to come.
- Budget Opinion Group – Like Enterprise, Avis Budget Group continues to maintain the status quo with its involvement in the new mobility space, such as the supply and maintenance of vehicles for Lyft and Waymo.
- Sixt – Sixt is entering the multimodal space by offering the micromobility service, Tier, within its Sixt share application. This allows Sixt Share users to easily view, book and rent Tier electric scooters and mopeds.
- Europcar – Europcar announced a partnership with Free2Move to obtain more vehicle data through its âConnected Vehiclesâ program, which will help improve customer service and improve the efficiency of fleet management. More recently, Volkswagen decided to buy Europcar in its portfolio, thus expanding its mobility services.
Car rental companies of all sizes can tap into the growing market for shared mobility. Compared to mobility start-ups, car rental companies have the advantage of having fleet management experience and understanding the ins and outs of fleet operations. While this is often a overlooked aspect of starting a shared mobility service, it is a critical success factor.
Car rental companies should consider implementing sharing technology in at least a subset of their fleet to reap the benefits of sharing. In addition to providing another channel to present the brand to customers through a different mobility option, sharing also reduces operational risk. Offering vehicles for different use cases will reduce peak usage and allow businesses to stabilize demand for vehicles.
Likewise, a car designed for sharing is a connected car, which means that data will be collected from the vehicle. Vehicle data can help uncover patterns of customer behavior and this information can be used to improve the customer experience, which has always been a priority for car rental companies. With a robust in-car technology solution, car rental companies could even use the same technology in the regular rental fleet to check vehicle condition and proactively diagnose vehicle-related issues.
A powerful telematics solution can also give the car rental company the flexibility to choose which route they want to go. To start with, there are some standard operating models that are common in the mobility space:
- Car sharing – Carsharing is generally a shared company-consumer mobility service, where customers can spontaneously hire a vehicle or reserve a fixed time. Vehicles can be placed in an operating area or parked in designated locations. During the low season, car rental companies can generate income by offering unused portions of their fleets for what would essentially be short-term rentals that are entirely app-based.
- Car subscription – Car subscriptions are a hybrid between car rental, leasing and sharing. It allows customers to choose from a range of vehicles over a period of time, giving them the flexibility to choose different vehicles for different travel purposes. While the traditional car rental model might meet this need, subscriptions lock in customers for a monthly fee, providing more stability and consistency. Similar to carsharing, the car subscription service can be entirely app-based, eliminating the need for in-person key exchanges.
Ultimately, there are many different applications for sharing a vehicle. Car rental companies don’t have to stick to one model. For example, a subset of the fleet may be dedicated to an organization for its own corporate carpooling on weekdays, and these same vehicles may be offered to gig workers as delivery vehicles. The main idea behind having a fleet that can be shared is the ability to identify where there may be gaps in customer transportation needs and to adapt the model slightly to fill that gap.
Everywhere in the transport space, the line between car rental and shared mobility operators is blurring. There is no reason why a form of mobility service should not rotate slightly to meet more mobility needs among the same group of customers, or even a different group. Technology has enabled people to get from point A to point B, and car rental companies can continue to meet these transportation needs with new and existing business models. Car rental companies should pilot new services and collect data to see what works and continue in iterations to develop a portfolio of services that best meets the needs of their customers. Providing shared mobility services doesn’t have to be difficult, contact INVERS to get started.