Changes in the rental market and the automotive environment as a whole are changing the playing field for companies. Here's why that's good for consumers.
Why Are Rental Car Companies Having Hard Times?
After the Uber debut on the NYSE in May, Barclays reduced their price estimates for both Hertz and Avis by about 5-10%. The belief appears to be that Uber's expansion will eat into the futures of car rental companies in general.
Why Is That Good News for Rental Customers?
There are dozens of active car rental companies competing currently, and there is very little chance they will all disappear anytime soon. But all that competition hasn't really smoothed out the entire car rental process yet. So additional competition from an indirect source could lead to rental companies needing to provide more for less to keep from falling by the wayside.
What Rental Car Experience Improvements Can We Expect?
Many areas that we are all aware of, but have come to take for granted, could be in for changes. Faster checkouts, better inventory management and notification, more straightforward insurance offers and gas fill-ups-- there are an endless list of aggravating but currently expected speed bumps in the car rental process. These are just the simple and obvious ones, requiring very little in terms of new technology or investment.
Why Aren't Car-sharing Services Doing Better?
While Avis's Zipcar sharing service seems to be faring poorly at the moment, you can imagine the process simplicity they have pioneered eventually becoming the norm in traditional car rentals. There is no reason, even with current technology, that car rentals can't be made much smoother.
Will Rental Car Companies Survive?
Uber and Lyft will likely continue to encroach on traditional rental car territory. But often in an industry's declining years there will be significant improvements or even completely unforeseen possibilities appearing. The likelihood is that in order to compete as long as is possible, rental car companies will make rental car customer experiences markedly better over the next years. And in that way they are likely to be around a while.