Business travelers are using ridesharing companies, such as Uber and Lyft, more than traditional rental companies. This is not good news for the rental giants like Hertz, Budget, and Avis and confidence in their stock is in decline.
According to Certify, the second-largest provider of travel and expense management software in North America, rental transactions have declined by 15% in the past two years and the decline is expected to continue, but why is this happening? I believe cost and convenience are the two main reasons why a business traveler arrives at a decision whether to rent or ride. For a business traveler, the decision comes down to convenience of ride sharing as the cost of a rental or rideshare is on company expense anyway. Although a business traveler is some instances may use cost as a justification to support their decision to rent vs ride.
Let’s delve a bit deeper in the convenience factor from a business traveler viewpoint.
How was your experience the last time you rented a car? I know that mine was far from optimal. I even have a gold loyalty card with one of the major companies, but the last time I booked a car I didn’t have my loyalty number handy and it seemed really time consuming to look up the number.
So when I went to collect my car, it involved the ID and credit card check, the wait for everything to be processed, and a trip into the parking lot to find the assigned vehicle. Even if they had my loyalty number, it only speeds up the collection process a little. The information on file may still have expired credit card or ID which needs to be reprocessed again. After picking up the car, the ID and vehicle are inspected again at exit. It takes a long time. The return procedure is no better and if I am cutting close to my departure time after a business meeting, the stress of not making the flight is something I remember the next time I book my car rental.
Now, compare all this to arriving at an airport and just using an app to call up a ride – no need to find your ID or credit card, you can just go. The return trip to the airport drops you at the gate and you can plan around tight flight connections.
Of course, having your own vehicle gives more control over route and timing and means you always have some wheels when away in an unusual location on business. Also, the rental car gives you private space to make/take calls and pick up other meeting attendees or wait in the parking lot if you arrived for a meeting a bit early.
So, If the rental companies could dramatically improve convenience, they could reverse the decline in business traveler transactions and compete more effectively. But imagine if the rental companies could disrupt the market rather than just trying to do what they do with a little more convenience and efficiency?
Why can’t the rental company app be linked to your business expense and approval management system that keeps you credit card and driver license information updated at all times? Why can’t you use an app to choose a location, time, car, color, and the stall number of your rental and immediately after you land the app gives directions on how you can walk right up to the car and drive away immediately?
It could be even better if the app can start the car remotely, so if you are landing in Chicago in winter, you can start the engine and get the heater running 10 minutes before you arrive at the car. Maybe it could even select your favorite radio station too and insert your destination into the GPS system.
The car can only be unlocked by the app, therefore the use of the car is authorized only by the driver who has booked the rental. So there is no need to check information when leaving the parking lot and the return could be made just as simple too. Valets could deliver and return the cars for an extra charge if the customer doesn’t even want to go to the rental car area of the airport or while navigating tight flight connections.
Just imagine if the rental companies could learn from the convenience that the ride sharing apps are already offering? An enormous number of manual touchpoints could be removed from the process, streamlining everything to the point where customers will want to rent rather than ride.
But rethinking the customer experience like this is not just great for the customers, it would boost those stock prices again and reduce overheads. Building a customer-centric rental service may seem like a huge challenge, but there are examples from various industries already out there. Most of these ideas are tried and tested, just not in the car rental industry.
What do you think about the opportunities to disrupt car rentals just by building the service around the needs of the customer? Leave a comment here or get in touch via LinkedIn.
Photo by Marcmo licensed under Creative Commons.