car rental international hub
The trends driving car rental
Changing consumer habits and technological advances are driving the car hire market into the digital age. Jenny Southan reports
t the end of last year I spent a month living and working in Los Angeles. Everyone says you cannot survive without a car in a city like this, and they are right. I looked into renting a car but in the end decided that it would be too stressful to drive in this unfamiliar city and opted instead to use Uber.
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I spent about £800 but did not have to shell out on petrol and parking. Meanwhile, a friend who was also in the city for a month woke up on the day she was leaving for the airport to fi nd her hire car stolen and a heap of paperwork to fi ll in. She swore to follow my example the next time she was in town.
It is these kinds of shifts in consumer behaviour that have put a dent in the car hire market in the past few years. Hertz Global Holdings’ chief executive John Tague stepped down last year after the company’s shares fell 52%, equating to a loss of $1.5 billion in equity value. Avis Budget Group faired somewhat better, with revenue increasing 7% in the fourth quarter of 2017 to $2 billion, but it constantly needs to shift gears to keep pace and has had to modify its fi nancial projections down. Innovation, however, equates to optimism. Alexander Sixt, Sixt’s chief administration offi cer, tells WTM Insights that ridesharing, for example, is not
wtm.com
to be feared and that if you can’t beat them, join them.
“Uber and Zipcar serve a completely
diff erent demand to Sixt. Our goal is to off er comprehensive and demand- oriented mobility. One example is our mobile app [
sixt.com/getaride], where our customers can choose between Sixt Limousine, Mydriver for business transfers or the low-priced taxi alternative Sixt Rides,” he says.
Smartphone revolution Avis sales executive Lance Smith
believes the future of car rental will be powered by smartphones. In a blog post written last year, he said: “In many cases, apps
Avis has a fl eet of connected vehicles
are already the lens through which we experience the brands we deal with and in future our every business interaction will be driven through smartphone technology. For us and our customers this means that the entire car rental experience will change. The old model of customers queuing for service at a car rental counter, then painstakingly selecting options from a checklist, is on its way out.”
Excess vehicles issue Fleet management is a key
Sixt’s Alexander Sixt says
ridesharing need not be a threat
issue that many car rental companies are struggling with, including an excess of vehicles that they cannot always sell (Sixt replaces its cars every six months, for example, to make sure customers always have the latest vehicles.) With increased
summer 2018 wtm insights 59
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