By on October 22, 2018

Car rentals have evolved rather dramatically in the new millennium. While you can still reserve over the phone before walking into an office to pick up the manager’s special for the agreed upon timeframe, alternatives are many. ZipCar transformed how some people get around an urban environment by allowing customers access to an array of automobiles at hourly rates. Seeing its potential, Avis acquired the company in 2013, expanding its function to include a less stringent return policy via ZipCar Flex.

Meanwhile, Enterprise has its own short-term rental services. Recently, the company has been on a kick to purchase as many mobility firms as it can. Hertz, which has been a little slower to dive into mobility culture, does offer alternatives to traditional rentals in specific markets. It also announced a new strategic partnership with the tech firm Aptiv last July to start testing autonomous fleets this fall.

This, of course, is all taking place in an era where carmakers are launching fleets of their own while attempting to rebrand themselves as data and mobility companies. But surely these rental agencies are just hedging their bets and trying to adopt new tech to better serve their customers. They’re not about to adopt the same tired rhetoric, are they?  

“Today, we consider ourselves a mobility company,” Ohad Zeira, vice president of fleet ventures at Avis, told Automotive News in an interview. “Even rental itself … the definition of it is going to be shifting over time. So when we think about mobility, we think about the flexibility, about hitting multiple-use cases.”

Damn. When it rains, it pours, I suppose.

Frankly, it’s actually a little easier to understand why ride-sharing and rental firms would want to frame themselves as mobility companies. They don’t sell you a vehicle; they simply want to charge you for the privilege of using one. Using that definition, public transit authorities are also mobility companies — meaning you can call yourself a disruptor the next time someone sneezes on you while you’re riding the subway.

Alight, so what does the future of rentals look like? According to a series of interviews Automotive News conducted with executives from Avis and Enterprise, very much like today. But the companies involved remain optimistic. The growing assumption is that automobiles are no longer a growth market in the West. In fact, ownership has already started to decline in cities (at least in Europe) and many analysts expect that trend to continue in the coming years. But that doesn’t mean people will suddenly stop needing access to automobiles.

“As consumers choose to own less and share more, that’s going to be fruitful and helpful for rental,” Zeira said.

Avis’ ZipCar Flex is aptly named. Unlike the standard service, which mandates you return the vehicle where you picked it up from, Flex allows you to drop it anywhere on the street within a given area. The hope is that by providing customers with more options, they’ll be more apt to use the service. In practice, we’ve seen this turn other companies’ rentals into mobile trash heaps. But if you want to make sure your car is clean, you can go into a brick-and-mortar Avis and rent a vehicle that has a good chance of being cleaned beforehand. And Avis is doing a lot more than simply tweaking ZipCar.

From Automotive News:

In June 2017, Avis began working with Waymo, the self-driving car subsidiary of Alphabet Inc., to offer fleet support and maintenance. Through a partnership established in August of this year with ride-hailing company Lyft, Avis adds thousands of vehicles to the Lyft Express Drive program, in which drivers reserve vehicles to use for Lyft.

Avis plans to add Internet connection to its entire fleet by the end of 2020. Already, 100,000 Avis vehicles, about 17 percent of the fleet, are connected cars. To connect all its vehicles, Avis has partnered with automakers such as General Motors and Toyota. Without automaker partnerships, Avis connects the vehicles through its own retrofit solutions, Zeira said.

“As we go out and connect our vehicles, we are able to create and experiment with new features and functionalities that help our own operations or our own experience and then be able to take those learnings and package it up and roll that out to our other partners.”

It also has a mobility lab in Kansas City, which opened last November. There, Avis can test new applications and services at scale and with the community to see how it it plays. While it’s unclear what new systems are being examined right now, it should remain a useful tool for the firm.

Enterprise’s approach to mobility is a little different. Rather than trying to build from the ground up, it’s investing heavily into tech firms that are already working toward its future goals. Enterprise made numerous investment into companies like Quanergy (autonomous hardware), Mobileye (advanced driving aids), Mobi (automotive blockchain) and Migo (mobile apps). Automotive News also reported that it recently threw its weight behind a “well-known” Silicon Valley transportation company. An announcement on that is expected soon.

“We recognized the changing face of transportation and increasing digitalization,” said Bob Wetzel, Enterprise vice president of corporate development. “We operate on a local and regional level in certain areas of the world, whether it’s U.S., Canada or the U.K. We felt it would be faster to acquire that existing car-share company than to build it ourselves.”

However, most rental firms are inclined to agree that traditional, multi-day car loans will remain the core of their business for the foreseeable future. “We have approximately 70 million transactions a year,” said Enterprise spokeswoman Laura Bryant. “The large, large majority of that is going to be [rentals] over a day.”

“It doesn’t matter whether you rent for an hour, a day, a week, a month. It’s all the same to us. It’s just a different product, but in the end, we’re delivering a virtual car when and where you need it.”

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9 Comments on “Day-rate Disruptors: Rental Agencies Sure Seem Excited About Mobility...”

  • avatar
    SCE to AUX

    Sure, it’s great if the rental companies think they can pass the liabilities back to the mfr. It eliminates the messy problem of driver-caused accidents.

    And which mfr has signed up for said liability?

  • avatar

    I am a long time Enterprise customer. I used to be a Hertz customer. What changed me? I got tired of paying a premium price for a car with lots of miles on it and stained, dirty interiors. The people at Enterprise provide excellent service. The last guy was so accomodating that I wrote a letter of praise to the company. Do I care if the car is “connected”, self driving, electronically wonderful. NO. It’s just a rental, get me from A to B without drama.

    • 0 avatar
      Arthur Dailey

      Have been a Zipcar member for about 5 years. Have not used it once in the past 12 months. Pricing has increased, choice of vehicles has decreased. And they have even reduced the number of locations where I work and live.

      I rent from our local Enterprise on average about 6 times per year. They are located on a street that has at least 4 other rental outlets.

      Prefer Enterprise due to their choice of vehicles and the service that I get.

      Connectivity means ‘zero’ to me.

      • 0 avatar

        Me too.
        Connectivity means nothing to me.

        Me too.
        Enterprise is the best. I ve been renting 20 + times a year for the last 20 years. In general, the cars are cleaner, have lower miles and I have better selection than any other rental house. Period.

        Budget/ Avis ? ‘All we have is a 30000 mile Escape.’

        Enterprise? Sir, yes I have an escape, Outback,Equinox, RAV4. Which would you like? Oh and they have less than 1/2 the miles

  • avatar

    In a press release today, Nike announced that they are a mobility company, and that all future Nike shoes would be connected…

  • avatar
    King of Eldorado

    I have to wonder if today’s common standard (in the U.S.) for calculating car rental prices based on the rental period rather than miles driven, will be affected as more EVs hit the streets. When the subject of range anxiety comes up one hears, “Well, you can always rent a car for longer road trips.” The $29.95/day specials can’t last long if a significant number of renters are putting 600 miles/day on newish rental cars.

  • avatar

    Where the rental companies can really kick a$$ is taking over fleets from companies. Instead of the 5 fusions 3 escapes and 2 explorers give the contract to one of the rental firms who will set up an online reservation system manage maintenance and insurance and refresh the vehicles every 30k miles. Much better than having to wait “for a good fiscal year” to replace the 6 yr old Escape.

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