While social distancing measures in Brazil stemming from the new coronavirus (COVID-19) crisis has reduced the local vehicle leasing business by some 25%, the rent-a-car industry has taken a hit of at least 90%, according to Paulo Miguel Junior who is the president of the country's car rental association ABLA.
Much of it is due to the drop in business for drivers of mobile app-based ride hailing companies (e.g. Uber, 99, Cabify), many of which are rent-a-car clients. “It’s quite tough to even make 50 reais [US$10] in a 12-hour day,” one driver said on local TV news CNN Brazil.
As many drivers have month-to-month agreements with car rental companies, some are opting to return their vehicles. This has pressured some car suppliers, even to the point of offering as much as a 90% discount on the monthly payment, the news program said.
To further mitigate losses, “some drivers are partnering up with food delivery apps [e.g. iFood, Rappi, Uber Eats] to make ends meet,” an Uber driver told Fleet LatAm. These services, however, already have agreements with many motorcycle and bicycle operators throughout the country.
Brazil is estimated to have some 1 million ride-hail drivers. Among the country’s largest car rental and leasing companies are Localiza, Unidas, and Movida.
The original story appears in FleetLatAm, a division of Global Fleet, and can be accessed here.