Car Rental Q&A: Where Do I Start When Automating the Car Rental Process?

Photo courtesy of Rent Centric
Photo courtesy of Rent Centric

Q: As a rental manager, I'm hearing a lot about new ways to automate the car rental process. Where do I start? — Dino Bavadi, DAnza Car Rental, Southern Calif.

A: Before one can begin to consider suitable car rental automation, it’s important to understand long-term industry direction and the short-term keys and roadblocks to success.

I believe that predicting the future is virtually impossible. But by understanding established trends based on data within our industry as well as observing changes of service distribution methods for other industries, one can better plan for this future.

Statistically speaking, the best odds for car rental business investment success, with proper risk mitigation, are realized by maximizing monetization capability within these observed trends. For instance, take accessing music. Not too many years ago, the common method was via cassette and compact disc. Soon after, digital audio formats like MP3 became available, and companies such as Napster enabled peer-to-peer distribution of these media formats.

At first, early adopters utilized this MP3 technology, but digital media distribution services soon became legally formalized through apps like iTunes and Google Play Store. Thus record stores became obsolete.

In retail, local outlets have been replaced with digital e-commerce platforms such as eBay, Amazon, and AliExpress, coupled with courier services that deliver direct from product manufacturers to consumers.

In both cases, new technology that efficiently connected the product to the consumer became the new effective business model.

In this way, new self-service and peer-to-peer carsharing platforms are an established reality, deployed to vehicle rental businesses with ease. Rental operators can now position themselves to service many more facets of the rental experience than once was possible.

This is important because automation at the dealership level, as well as encroachment from services such as Uber, requires rental operators to reinvent themselves as efficient distributors that provide products to customers and maximize the monetization opportunity. Areas where monetization can be maximized include widespread rental locations, shorter, more precise rental durations, customer credit rating considerations, and driver behavior history from telematics.

We are very close to seeing automated service refinements, for example, where a customer with a positive behavior history — and within a certain age and financial credit range — can rent a brand-new luxury vehicle for a certain price per minute, while another individual with lesser standing might be limited in the vehicle selection he or she can rent.

Consider the new revenue potential to meet this customer’s request: “I would like the 2017 Audi with an A+ cleanliness rating and fewer than 15,000 miles on the odometer for two hours and a Toyota for a week after that. Thank you.”

As the world continues to change rapidly, rental operators have a unique opportunity to leverage their existing business acumen and combine it with the efficiencies and new benefits provided in the self-service, on-demand car rental and carsharing business models.

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