The Rental Car of the Future

The traditional car rental business is changing at warp speed these days, peddling as fast as it can to compete with new peer-to-peer offerings. One strategy that permeates the response of majors such as Enterprise Holdings, Hertz, Sixt and others is to offer a product line that runs the gamut.

Consider the assessment of Alexander Sixt, member of the Sixt Group’s management board, and the person responsible for organization and strategy: “We are convinced that previously separate forms of mobility such as car rental, car sharing, ride hailing or leasing are only individual components of the entire mobility spectrum. Therefore, we expect that current product offerings will merge in the mobility market of the future.”

“The car rental industry is ripe with opportunities,” says Christine Taylor, executive vice president and chief operating officer of Enterprise Holdings. “In the next few years, we’ll continue to see an emphasis on technology as it relates to both vehicle access and in-vehicle capabilities. Additionally, we’ll likely see even more transportation options and perhaps gain some clarity around those that are sustainable.”

“Having a customer-first, mobility-first strategic focus will continue to be instrumental in driving preferences in the car rental industry,” says Bob Stuart, executive vice president of global sales for Hertz.

High Tech/High Touch
Mobility is mandatory. But woe to the provider who forgets that what underpins mobile apps and the like is good old customer service.

Hertz is tweaking its counter-bypass service by allowing customers to choose their preferred vehicle “on-site with no wait,” says Stuart. The product is called Ultimate Choice. Less sexy perhaps, but no less important, is its Site Optimization Initiative. It standardizes process at the company’s rental locations. “We believe that when you get the process right,” he contends, “you not only become more productive, but you also deliver the fastest, most satisfying customer experience.”

Bridging high-tech and high-touch is Hertz’s revamped customer relationship management system. The tweaked CRM, says Stuart, “allows us to better understand our customers’ travel trends, rental behaviors and product service preferences to serve them better.”

Hertz is infusing the company with a refreshed ethic, one predicated on improved customer service. “We started work on customer service improvements last year, hiring field training and recruiting leaders, rebuilding our continuous improvement quality program, and undertaking the site optimization initiative to enhance efficiency and the customer experience through process remapping and standardization,” Stuart says. “We also created a dedicated customer experience team and a dedicated customer success team to help ensure we are communicating best practices and delivering consistent service excellence.”

As Hertz’ EVP of global sales puts it, “We know we are making positive progress. Since implementing those initiatives, our customer satisfaction scores have been consistently rising and we are hearing great feedback from our corporate customers. They see the difference.”

Enterprise’s Christine Taylor says EHI’s portfolio of rental car companies – Enterprise, National and Alamo – “consistently rank above the industry average at North American airports.” Airports, of course, are the proving grounds of any car rental firm with aspirations of catering to business travelers. Taylor says, “We’ve grown our company’s share of the US airport business by more than ten percentage points since 2007. We also continue to expand globally and establish our customer-service values at a growing number of airports.”

Who’s Car Is It?
Meanwhile peer-to-peer vehicle provider Turo recently filed suit against Los Angeles World Airports, which operates LAX, among others. In an interview with the respected electronic publication TechCrunch, Turo’s chief legal officer asserted, “The airport expects Turo to obtain a rental car company permit and expects our community to pay anti-competitive fees whenever they choose to exchange cars at or near LAX.” LAX is not the only airport in the country that’s grappling with the issue as the Airbnb concept sprouts wings and disrupts the industry. The way things eventually shake out could have a real impact on business travelers in years to come.

Here, per Turo’s website, is how its peer-to-peer plan works for renters: Sign up for Turo with Facebook, Google or on your e-mail. Turo will confirm your identity and eligibility, so you can become an approved driver. Enter your travel dates and location, and search “our vast selection of unique, locally-owned cars.” Book the car; the owner will confirm your trip within eight hours. Meet the car owner, pick up the car, show your license, grab the keys and go. At the end of the trip, replace the gas you used and meet the owner to drop off the car.

Turo says it covers the owner’s car with $1 million in liability insurance and 24/7 roadside assistance. It’s going to be instructive to see how much traction Turo can generate with older business travelers as well as Millennials. Against this backdrop comes word no less than General Motors is getting set to launch its own peer-to-peer entry. Another player, Getaround, shouldn’t be ignored.

Different Shades of Sharing
Enterprise is taking a middle of the road approach to the shared economy, touting its Enterprise CarShare product. The idea is to automate the rental process so drivers can rent a vehicle by the hour, the day or overnight. The vehicles are accessible 24/7 and they are parked “in your community” says Enterprise. They’re also owned by Enterprise as opposed to Turo’s purely peer-to-peer approach.

Avis Budget Group’s Zipcar now bills itself as “the world’s leading car sharing network.” With the Brexit looming, Zipcar is focusing on building up London, claiming now to be available to nearly 3.5 million souls in the city.

Environmentally-conscious drivers, says the company, “can be considered more efficient because journeys avoid so-called ‘empty miles.’ Cars are only driven when used by members and go point-to-point, unlike taxis that need to drive to find and pick up passengers before a trip starts. Fewer miles driven results in lower emissions per trip, making the service much more efficient and environmentally friendly.” Zipcar says it makes a typical 20-minute trip in London for an approximately 54 percent less than ride-hailing companies.

By the end of this year, Zipcar plans to convert 325 of its London vehicles to electric, this via Volkswagen e-Golfs. Zipcar members can access the e-inventory via their current Zipcar app.

What Happens in Vegas…
Enter the driverless car. Electric cars – pure or hybrid – have proven themselves for years. Autonomous vehicles are quite another matter. If you think corporate travel managers blanch when their travelers try to book a ride share, just wait till they have to redesign their corporate travel policies to accommodate driverless automobiles.

Notwithstanding, Hertz and its fleet management subsidiary Donlen recently announced a new strategic partnership with Aptiv, a global technology firm. Under the agreement, Hertz will assist Aptiv in the operations and management of Aptiv’s outlet in Las Vegas – the commercial launch city for its autonomous vehicles (AVs) in North America. The two companies will execute a phased approach with an eye on developing standard procedures for mobility-related AV fleets.

In a prepared release, Aptiv chief technology officer and president Glen De Vos said, “Our partnership with Hertz will allow us to operate and maintain autonomous fleets at scale, a critical element of the offering that our on-demand mobility customers will require.” De Vos went on to label the deal with Hertz “an important step in the broader journey for Aptiv within the nascent self-driving technology space.”

Michael Fisher, Hertz senior vice president and chief digitization officer adds that the deal with Aptiv “shows us how to build on our expanding platform for managing AVs of the future.”

Hertz isn’t alone in efforts to introduce AVs. Clearly, in the lessons learned from this budding relationship are not meant to stay in Vegas.

Over at EHI, Christine Taylor says, “Enterprise Holdings’ fleet is well-positioned to introduce millions of consumers to new fuel and vehicle technology, especially as transportation infrastructure and alternatives, including autonomous vehicles, evolve in the future. Today 45 percent of our customers’ first experience with new technology is in the cars they rent. The car rental category continues to be a critical proving ground for new automotive technology.”

Taylor imagines autonomous vehicles will follow that trend, saying privately-held EHI has been closely studying the autonomous option. Consider, Enterprise’s latest agreement is with a start-up company called Voyage. Bloomberg reports that this is a smallish deal, one in which Enterprise will manage the upkeep and servicing of autonomous vehicles in a ride-hailing fleet designed by Voyage. The agreement will cover some dozen vehicles. But here’s the important part: Bloomberg reports “The partnership gives Enterprise an entry point into driverless cars, a technology that could radically transform its main business.”

Taylor says one of Enterprise Fleet Management’s missions is to serve communities with autonomous vehicles. “Voyage’s introduction of its second generation (G2) vehicle features its own autonomous driving technology as well as new best-in-class sensor technology.”

She adds, “The car rental industry may be one of the early adopters of autonomous vehicles. But that will take a while, as potential liabilities, safety measures, operating standards and other issues for driverless technology are evaluated.”

Futurama
Long-term, Christine Taylor envisions a car rental (if it’s even called that by then) landscape in which autonomous vehicles will be increasingly entering the fleet. In addition to that, look for:
• rising on-airport customer volume
• increases in domestic tourism and international air travelers
• diversification of transportation services
• enhanced customer experience through tech-based devices and services.Hertz’s EVP of global sales Bob

Stuart adds to the prognostications. He foresees:
• a “mobility-first” strategic focus driving customer preferences
• the further leveraging of technology
• a continuing “personalization” of the customer experience.

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