For Fleet Managers, New Challenges Mean New Opportunities
Just as it’s upended so many other aspects of our daily lives, the mobile revolution is changing the way we rent cars. Ride-hailing services like Uber and Lyft are already routine options for personal transportation. Now ride sharing, one-day rentals, subscription services, and even self-driving vehicles are easing into the picture.
While it’s true that today’s emerging mobility services present new challenges, don’t think they spell the end of the traditional car rental industry. It’s still growing, and as new options emerge the fleet management expertise of car rental companies is becoming even more relevant.
Competition from newcomers may be increasing, but with today’s advanced technology fleets can achieve greater efficiency, lower operating costs, and greater customer satisfaction.
The quest for happy customers
Car rental companies deal with an enormous number of vehicles, often in multiple locations all over the world, and a broad variety of customers. One of the fleet manager’s most challenging task is allocating the right assets to the right customers. What vehicles are available? Where are they? Who is likely to rent them? The answers to these questions are key to matching what customers want with what they get.
The trouble is, predicting vehicle availability and customer demand constantly bumps up against unpredictable factors like snarled traffic, dangerous weather, and major events popping up in specific locations. Making the wrong bet can result in unused cars filling lots and unhappy customers lined up at counter, asking for vehicles that just aren’t available.
Customers themselves add to the quandary. What kind of vehicles will be in demand today? When will they return rentals, and what kind of condition will they be in? It all adds up to uncertainty for the fleet manager.
It’s all about the data
To serve consumers who want cars immediately, rental companies are turning to smart technology to make the rental process faster and more convenient. Artificial intelligence (AI) offers perhaps the greatest potential to meet the challenge. AI’s real-time, on-demand data automates and informs more proactive decision-making—reducing operating costs, maximizing efficiency, and optimizing customer satisfaction.
AI platforms built specifically for the car rental industry crunch data from many sources, leading to actionable insights. With up-to-the-moment information on weather, traffic, current events, airline schedules and hotels, fleet managers can tame the uncertainty and create more happy customers.
Technology can also predict how customers will use the assets. Take mileage distribution, for instance. A vacationing family is likely to use their rental car far more, say, than a business traveler attending a conference in the city. With this insight, fleet managers can rent a car with high mileage to the businesswoman and save the car with lower mileage for the vacationers.
Artificial intelligence can help balance the fleet between different locations as well. When there’s a big conference in San Francisco, for example, cars can be brought in from San Diego, improving utilization of the fleet.
Automation reduces mistakes and staffing demands overall; it can even promote more effective upselling at the counter. By providing better visibility into what happens with the fleet, advanced technology helps managers get better at their job.
Turning challenges into opportunities
While it may seem like the challenges are pressing in from all sides, in reality the car rental industry is still going strong. Healthy international tourism is a major booster, alongside strong economic growth in developing countries. And, of course, internet and smartphone use is projected to contribute to growth as it makes car rental ever more convenient. In the U.S. alone, the market is expected to grow from $68.5 billion in 2017 to $106.2 billion by 2022.
Expert fleet management also helps car rental companies stay profitable, according to Alec Gutierrez of Kelley Blue Book. “From a cost management perspective, the rental car companies are best suited to manage large fleets of vehicles, which ultimately allows them to keep costs down.”
Opening new revenue streams
Moreover, with their experience managing large, geographically diverse fleets, car rental companies are ideally positioned to take up new mobility services. Better data makes it easier to create new revenue streams by branching out into new possibilities like subscription services, on-demand rentals and ride-sharing.
For trailblazing companies, autonomous driving presents an intriguing opportunity. Back in 2016, Enterprise Holdings executive Susan Lombardo predicted that the car rental industry would be an early adopter, helping to “introduce autonomous driving technology to millions of consumers.” Today, major players like Hertz and Avis are already considering partnerships with autonomous vehicle developers.
Car rental companies keep rolling
With efficiency absolutely vital to customer satisfaction today, companies that don’t reach for data-driven decisions will be left behind, as their customers will feel what’s lacking.
Industry expertise in fleet management, with a boost from advanced technology like AI, will keep car rental companies moving forward as the 21st century rolls on. That expertise will, in particular, help them land on the winning side of the autonomous disruption—if they’re ready to act quickly.
So don’t write off car rental companies as dinosaurs just yet. As Chris Brown has noted, “What those in fleet know, the rest of the world is finally understanding: If you own the fleet, you own the future.”
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