Q&A: How Paper Documentation Can Hurt a Rental Company’s Bottom Line

With the Record360 app, rental car employees can take still photos as well as video when performing a vehicle walk-around. Photo courtesy of Record360.
With the Record360 app, rental car employees can take still photos as well as video when performing a vehicle walk-around. Photo courtesy of Record360.

Shane Skinner, co-founder and CEO of Record360, a digital documentation solution for dealerships and rental companies, shared insights with Auto Rental News to discuss paper versus digital documentation, customer satisfaction, and the potential to automate car rental processes.

Auto Rental News: Paper documentation has been used since the beginning of car rental. What’s the problem?

Shane Skinner: The classic paper forms with vehicle silhouettes are unable to capture true vehicle condition, creating a recipe for damage disputes, damage costs, and dissatisfied customers. Yet existing protocols have made it difficult to reduce costs associated with unreported damage, a recurring expense.

With digital documentation, rental agents snap high-resolution photos and videos of a vehicle’s interior and exterior. The images offer a clear representation of the vehicle prior to it being taken off the lot.

Given how hard it is to pinpoint the extent of damage from a piece of paper, a rental agency is likely absorbing damage costs rather than arguing damage disputes. After all, there’s limited evidence to prove that the customer caused the damage.

ARN: What are some of the hidden costs behind paper documentation?

SK: Our research shows that damage costs per transaction tend to be .007% of a vehicle’s market value. For a rental agency renting out vehicles with an average sticker value of $25,000, that means losing $1.75 for every rental. For a rental location with 100 daily transactions, that comes to $5,250 in monthly damage expenses, or $63,000 over the year.

The costs do not stop there, since you are also paying employees to process damage claims they likely did not cause. For an employee making $30 per hour, it likely takes 30 minutes to tackle a damage issue. If just 10% of your transactions have damage issues, that translates to $1.50 of personnel time spent on every rental due to damages.

ARN: How does paper documentation versus digital affect customer satisfaction?

SK: One of the most critical costs to your business is the cost of customer dissatisfaction. Record360’s Car Rental Customer Report showed that nearly 50% of car rental customers say they would never do business with a rental company that accused them of causing damage. That means losing half of all the customers you argue with over disputes. With clear documentation, customers can better understand that the rental company is not burdening them with costs they didn’t create.

Also, there can be a lot of angst among the agents during the check-in and checkout processes. Using paper documentation, the question, “Do I trust that the other agent who checked out the vehicle did the documentation right?” is alleviated.

ARN: What is the proper way to approach digital documentation during the customer service process?

SK: Just like with the paper process, it’s important to do the walk around of the vehicle with the customer. If the car is parked in a dark area, the agent would use the flashlight on a tablet or smartphone. Our system uses video documentation, and during the walk around, agents can ask the customer if he or she wants a copy of the video. That alone reduces damage disputes.

When the car is returned, a rental agent will walk around and inspect the vehicle again. If the agent sees a ding or dent, he or she can go back to the original video on the spot with the customer.

ARN: Besides damage documentation, what other functions can a digital solution automate?

SK: Agents can check mileage and fuel levels, the condition of the wheels and mirrors, and even items in the glove compartment. Rather than rely on memory to remember these details, a digital solution that integrates checklists makes it easy for employees to check on these areas every time a vehicle is returned.

Particular to Record360, we introduced claims management about four months ago. We have also partnered with Acuant for driver’s license verification using facial recognition software. This gives users the opportunity to do underwriting on where the vehicle is checked out, as opposed to having to bring customers to the office or make photocopies of their drivers’ licenses for paper records. We scan, verify, and store all of that information within our platform. It’s making the process more mobile and digitized.

We will also add “recall flags” to the software, which is tied into a recall database.

ARN: Can digital documentation be used to leverage big data?

SK: Our platform has a dashboard in which a company can see all of its transactions, which allows them to review product quality and customer service decisions, as well as how a vehicle is performing with any damage.

ARN: Where do you see the technology evolving in the next five years?

SK: I think this technology will play a larger factor as the transaction process becomes more automated, particularly regarding check-in and checkout. People want to get in and out as fast as possible without having to talk to someone. Digital documentation allows a rental company to document that asset before giving a vehicle to a customer.

In five to 10 years, the entire process will be in the consumer’s hands. There won’t be rental agents to help with the process; it will all be mobile.

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