Technologies like autonomous vehicles, AI, smart parking, and more, present opportunities for rental companies to adapt to the changing market and keep a competitive edge.
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Some jobs are cooler than others. Test pilots, marine biologists, and Disney Imagineers all have pretty cool jobs. So do futurists — scientists, philosophers, and thinkers — who get paid to envision what our world will look like moving forward. Like science fiction writers, futurists project how the technologies and trends of today will influence emerging inventions and cultural shifts to create the new normal. But unlike writers, they do this not to spin works of fiction, but to advise business and government leaders on how to anticipate and leverage these new developments to stay on the cutting edge.
As businesses plan ahead for the new year, it’s worth asking, what would a futurist say about the car rental industry? To play futurist ourselves, let’s look at the major trends in the industry today and the emerging technologies that are already reshaping the market to project what renting a car might look like in the next few years.
Carbnb?
When considering the future of any vehicle-related industry, it’s hard to ignore the gig economy. And while Uber may be the most famous gig company, car rentals are shaping up more like Airbnb. Fleet owners list their vehicles for rent, and renters use an app to find the vehicle they want and reserve their time. American car-sharing marketplaces like Turo and Getaround offer such a service, as does Car Next Door in Australia.
Fleet owners receive the bulk of the renter’s payment, with the app developer taking a commission for facilitating the transaction and processing the payment. The owner also takes on the rental company’s responsibility for maintaining their fleet of cars while renters are still expected to take good care of their rental. Ideally, this system lets fleet owners monetize their property while renters save on brokerage and fees by dealing directly with owners.
Getting Over Overhead
In the future, rental companies may have drastically lower overhead costs as they will no longer need to purchase, store, and maintain their own fleet of cars.
Moving away from a traditional rental company model, fleet owner-entrepreneurs are already becoming rental agencies of a sort. These “superhosts,” as Turo calls them, own a fleet of cars and use the software as a platform to monetize their assets.
Regular vehicle inspection and maintenance are costly, but automation may offer a solution in the future. For instance, Michelin and startup ProovStation have developed a magnetic scanner that uses AI to evaluate everything from tire pressure to interior stains. Rental companies can install similar technology at service centers for before or after handovers. App integration of these automated inspections can alert companies and drivers sooner to any vehicle issues, thereby cutting down on time costs and ensuring quality standards.
Robo-Rentals
All this assumes we’re dealing with purely human-driven cars. Autonomous vehicles (AVs) or self-driving cars will soon add a whole new dimension to uberized auto rentals. These cars will be able to drive themselves between owners and renters, parking at their destination without assistance.
Uber, Tesla, and others have already planned similar services, and car rental companies will be able to adapt the same ideas sooner rather than later. Enterprising app developers will rent fleet owners’ unused vehicles for use as self-driving taxis, effectively creating driverless rideshare services.
Smart Parking Perks
AVs are not the only major innovation facilitating the future of car rentals. Smart parking is already streamlining these systems in multiple ways. Smart parking apps have helped car rental companies, uberized and otherwise, find spaces to park their fleets of vehicles, especially when demand was plummeting during the COVID pandemic. Smart parking apps are also highly versatile and can simultaneously provide spaces for all of a rental provider’s assets, whether new or classic, light or heavy, work- or customer-experience oriented, all at once.
Like all car rental services, rental apps could do great business at airports, but often lack the dedicated lots used by established rental firms. Smart parking providers work with rental apps to help superhosts and other fleet owners reserve spaces in airport lots and other nearby parking structures. Renters need only proceed to the correct space and drive off with their order.
Rideshare waiting lots at airports can serve as inspiration for smart parking. Just as drivers queue for passengers in a given area, app developers can set up dispatch centers for renters to come pick up their vehicles, saving time for everyone. Meanwhile, building owners can monetize their unused parking spots by letting rental cars park there between rentals or when awaiting users.
The technology is almost in place for autonomous car rental returns; a similar system can be developed for smart parking. If no pre-arranged spots are available, the rental app could pay for and reserve public parking spaces, then guide AVs there to await pickup. Simply integrating with the car rental app could move vehicles between spaces efficiently to maximize profits plus minimize wear and tear on vehicles.
Prepare to Future-Proof
As car rental companies map out their 2023 objectives and priorities, keeping these innovations will help them stay competitive in the industry. Maybe an existing rental company will embrace these new ideas and transition to the model that leads the industry. Or maybe some disruptive new company with a name like Fwoop or Yoinq will upend decades of established practices. Whoever they are, the company that mixes easy-to-use rental apps with autonomous vehicles and smart parking will have a huge advantage in the ever-changing market.