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Can You Imagine A World without Rental Counters?

It’s easy if you try.

Imagine there are no rental counters — it’s easy if you try! No lines in back of us, in front of us, only cars.

You may say I’m a dreamer, but I’m not the only one. While this sounds like the musings of a musical poet, there are plenty of stakeholders ready to make this happen. It’s merely an extension of this seismic shift in how we create, share and consume information, and how we get around.

It’s life, on demand.

Today, we’d rather connect on social media rather than drive to meet friends. We’d rather text our partners from the other room than get up and walk over. We pay extra for same-day online delivery. We’re downloading first-run movies at home rather than going to the theater. Today we use the phrase, “I need it yesterday,” even when we’re not sure exactly what we need.

Car rental, on demand.

Rental cars need to be placed where users need them most, when they need them, not waiting to be accessed at a central location through a brick-and-mortar gatekeeper that closes at 7 p.m. Rental cars need to break free from the chain-link fence: think big box retailers, train stations, office parks, apartment complexes, national parks or retirement homes.   

This has been happening for a while, you say, and it’s called car sharing. Similar to car sharing, this self-service model relies on mobile technology and telematics to access the vehicle and control the rental. But this form of car rental is truly on demand. Instead of going through a member application process and waiting for a swipe card in the mail, users log on with a smart device, enter identification and credit card information and access the vehicle immediately.

This business model treads on the local-market turf of independent and franchised car rental operations today. For those ready for it, think of the possibilities. Instead of having to deliver cars to the hotel, why not leave at the hotel three tech-enabled cars, ready for self-service? Instead of considering the financial metrics of a rental counter and employee in the body shop for replacement rentals, why not leave three cars there, as well? This is about meeting your business niches, only quicker.

We’re seeing the green shoots of this future today, with startups such as Silvercar and major car rental companies owning the great majority of the car-sharing market, and those majors integrating technology to automate the traditional car rental process.  

The process is being kick-started by the auto manufacturers, who now offer telematics systems as factory options and offer their own branded car-sharing services. Audi has even created an app that lets four people share an Audi for up to two years. Telecommunications companies have gotten into the act. Verizon Auto Share is “designed to enable rental companies to provide their customers with an enhanced rental experience without interacting with an on-site attendant.”

Critical to smaller rental companies looking to enter the world of self-service car rental, a car rental software provider has entered the market with a solution that automates and manages a de-centralized fleet in conjunction with a traditional car rental fleet. Look for others to follow.

The transition won’t come without hiccups. There are aspects of this business model that are foreign to traditional car rental, such as a different reservations grid, remote vehicle servicing, technology requirements and more. And don’t burn your rental counter just yet. But you must understand the evolution and hop on the bus at some point. If you’re not doing it, someone else will.

In looking at car sharing and traditional car rental, the lines are starting to blur to the point that there may be little distinction in 20 years. As car sharing moves away from urban first adopters into the mainstream, traditional car rental moves into its tech-enabled, on-demand future.

 

Comments

  1. steve grigory [ April 30, 2015 @ 09:37AM ]

    This is coming! Not quite as fast as I would have thought when I was at a peer-to-peer car sharing startup a few years ago, but it's coming.

    Using just the "Cars permanently located at a hotel" example, the level of flexibility and convenience it offers to the customer are noticeably superior to the existing lot-based system at airports. Customers don't not have to go to the airport lot (twice!), instead they go directly to their hotel (often on a free shuttle), check in and grab their car the next day.

    Additionally, customers are forced to have the car for their entire trip today. If the car is located at the point of demand (the hotel in this example), they can reserve the car only for the days they actually need it. Even with a higher cost-per-day, they can spend less if they don't pay for a car that's just sitting there unneeded and is probably incurring a hotel parking fee each day.

    This potential savings model also serves the car rental company since they can charge a higher daily rate as compared to today's method where price-per-day wins. A higher daily rate combined with a high demand utilization equals a much higher revenue-per-car amount.

    It's coming. Trust me, it's coming. And once customers get used to it, they will never want to go back to the airport lot and counter method.

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Author Bio

Chris Brown

Executive Editor

Chris is the executive editor of Business Fleet Magazine and Auto Rental News. He covers all aspects of the fleet world.

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