The future of car rental – more choices on the road

Veteran car rental analyst Neil Abrams famously said, “We’re in a transformative stage in the car rental industry. A radical new transportation paradigm, where the lines between car ownership, rental, and lease are blurred beyond recognition. In that world, cars will drive themselves and Apple, General Motors, Hertz, and Google will be in the same business.”

That was 2018, and that’s the world we find ourselves in today. Technology touches every aspect of our lives and is behind the paradigm shift we’re experiencing throughout the ride-hailing sector.

The gig economy will see car rental companies listing their vehicles for rent. Renters will be able to locate the vehicles on an app and reserve the time online. American car-sharing services like Turo and Getaround and Australia’s Car Next Door offer this service already.

E-hailing services like Uber and Bolt have usurped market share from the traditional car rental space. These services provide comfortable and safe trips to passengers who have the added benefit of being able to share their trips with friends and relatives who can live-track their rides. This additional safety feature, the more flexible and affordable payment options and the personalised option of drivers with local insights have made e-hailing the popular choice it is.

Car share reduces carbon emissions and is a cheaper alternative to E-hailing, particularly for younger consumers. Princeton set up Revise Your Ride to encourage faculty staff to leave their vehicles at home and extended the offering to undergraduates and students. It includes automatic enrolment in their Enterprise CarShare Programme. Billing is by the hour rather than by distance, allowing travel to nearby towns, malls and conference venues. It is a smart transport choice that helps reduce traffic and is an attractive alternative in centres with limited parking space.

Hertz has bolstered their offering with “Plus”, a new platform on their site that offers customers access to upward of 130 000 curated global experiences. These include events, tours and other travel-related offerings. The focus has shifted to creating memorable experiences by allowing people to sign up for excursions when they book their rental car.

While fleets reduced significantly during Covid and the global shortage of semiconductors, in South Africa, there are clear signs of recovery. New car sales attributed to the car rental industry increased from 15.3% in January 2022 to 17.4% in October 2022.

As the industry recovers, the shortage of rental vehicles is unlikely to change for the foreseeable future, so it’s a case of watching while we wait. The tide has turned, and car rental is now a seething mass of activity, just not in the traditional sense.