The ICRS self-service rentals panel included (L to R): Julian Espiritu, managing director of Abrams Mobility Advisors and a founding executive of Zipcar; Alex Aryafar, founder and chief technology officer at Rent Centric; and Cesar Leyva, Airport Van Rental’s vice president of fleet operations.
Photo: Ross Stewart / Stewart Digital Media
During the pandemic, self-service and contactless became more common topics in the car rental world, but overall, the industry has been slow to adapt.
With new technologies and processes, car rental companies can make self-service rentals a reality.
At the 2024 International Car Rental Show, a panel that included a systems provider and an independent rental company outlined ways to open new markets and operate virtually 24/7 without additional labor or infrastructure.
“I’ve seen self-service from the start to what it is today,” said Julian Espiritu, managing director of Abrams Mobility Advisors and a founding executive of Zipcar who helped pioneer the concept of car sharing. “It’s far different from where it was 20 years ago in terms of technology. It’s much more advanced.”
Rental companies can start using self-service in stages to try it out before expanding to a fully contactless location.
“There are different levels that you can enter self-service rental,” Espiritu said. “You don’t have to go full-blown right away. You could try it out and see how it works in your business operation. And if you like it, then you could go to the next level to expand it.”
How the Technology Works
Self-service rentals can come in different varieties. Through contactless technologies, all the rental processes can be brought into the customer’s hand through an app, said Alex Aryafar, founder and chief technology officer at Rent Centric, a provider of car rental management systems including a self-service carsharing platform.
“Customers can download an app, register their information, reserve a car, pick up the car, and then drop off the car with no interaction at the counter,” Aryafar said. “Everything goes through the system automatically.”
To start, Aryafar recommends having a branded app website and secure registration. Additionally, a pickup and drop-off location and a locking/unlocking process are needed.
“Registration is very important,” Aryafar said. “You don’t see the drivers. They need to download the app and do the verification themselves.”
The verification process consists of multiple stages, including email verification to make sure this customer can receive reservation emails and SMS phone verification to verify the person has a cell phone. Driver’s license verification allows you to determine the license isn’t stolen, isn’t suspended, and the face matches the picture on the driver’s license, Aryafar said.
Personal insurance verification is also important. “If renters want to use their personal insurance, it has to be verified in real-time automatically,” he said.
Damage inspection also happens through the self-service application. When starting the rental, customers take photos around the vehicle and note any damage they can find through the app. When they return the vehicle, they go through the same process. “If anything happens during the rental, everything is documented with a date and time stamp,” Aryafar said.
Self-Service Helps Increase Locations, Hours
Self-service rentals can help a rental company to expand into new areas or neighborhoods. With contactless technology services, a rental company can operate a virtual operation without needing a brick-and-mortar store location.
“You could use this technology if there’s a market or even a neighborhood you think is a viable new market for business, but you don’t want to invest the number of resources and capital to put into a traditional store,” Espiritu said.
Espiritu recommends placing a car-sharing vehicle (or several vehicles) within that neighborhood and seeing what type of demand you have within that area.
“With the advancement of technology, you can rent the vehicle by the hour, by the day, or by the week in a secure way,” he said. “With a minimal amount of investment, you can see the market potential before you decide if you want to invest in opening a brick-and-mortar store. And it’s not labor intensive. Presumably, the only labor you’ll have in this type of platform is the maintenance of the vehicles.”
From the technology side, the rental companies can create an offsite location inside the system by establishing the boundaries and setting the pin on the app for customers to access the vehicles, Aryafar said.
“When you go to the vehicle setup, you change the location from the main office to the offsite location,” he said. “And immediately in real time, the vehicles will show up in this new location you have set up. It’s easy to move the cars around and test the markets.”
And if a rental company isn’t looking to expand to a new location, self-service rentals can help provide an opportunity to rent vehicles on a 24-hour basis at its existing rental operation.
“The self-service gives you the ability to not have any overhead costs for people to pick up or drop off vehicles overnight,” Espiritu said. “You can have a 24/7 operation without having the labor of a 24/7 operation.”
By using self-service technology, rental companies can increase vehicle usage, which can lead to increased revenue, Espiritu added.
Self-Service Helps Enter New Business Segments
Self-service technology can open the door to new business opportunities. Espiritu has seen rental operators use self-service technology to enter the field of service of replacement/insurance replacement rentals.
“Instead of having a rental employee go to a dealership between certain hours just to rent out the cars, self-service allows you to stage the vehicle there at the dealership and rent it out without needing the labor of doing it,” Espiritu said. “It maximizes the utilization without the labor costs.”
Another business segment to explore could be corporate accounts. If a rental company has a corporate account with a local business, it could stage its vehicle at the corporation’s headquarters. Then the corporation’s employees could rent the vehicle through an app – without the rental company needing to send employees to deliver the car.
“I see a lot of rental employees shuttled back and forth just to rent out rental vehicles to corporate accounts,” Espiritu said.
Another opportunity could be working with a real estate company to provide rental vehicles at a residential complex. Rental vehicles would be parked at a residential community and available for tenants to rent. “Sometimes these arrangements can operate with a guaranteed revenue stream with the real estate developers,” Espiritu said.
“These are types of businesses that you could get into without requiring additional labor or some sort of brick-and-mortar setup display,” he said. “You can enter different segments of business without a huge amount of capital expense.”
Rental Company’s Perspective on Self-Service
Airport Van Rental has been operating contactless rentals for almost three years. In the beginning, the hardest part was taking the chance and putting self-service into operation, said Cesar Leyva, Airport Van Rental’s vice president of fleet operations.
“We had many concerns over what could happen to our vehicles if we did self-service rentals,” he said. “Where are they going to end up? What’s going to happen to our catalytic converters?”
The rental company started using self-service after hours. “Rather than have staff work from midnight to 6 am, we used contactless technology to supplement that,” Leyva said. “Then we could cut some time on payroll.”
When contactless technology helped reduce costs for after-hours service, Airport Van Rental decided to try opening self-service rental locations.
“The payroll costs kept going up as well as the costs for real estate, vehicles, and interest,” he said. “We started looking at new ideas to cut costs.”
Airport Van Rental has seven contactless rental locations across Arizona, California, and Texas. Two of the locations are standalone sites without support nearby. “We kind of eased into the other five contactless locations,” Leyva said. “They are close to one of our brick-and-mortar facilities.”
If a rental company is interested in trying a self-service rental, Leyva recommends easing into it by placing the vehicles close to its already established location. “Then you can have rental employees drive by and keep an eye on the vehicles,” he said.
A challenge that Airport Van Rental faced was finding a company to install the technology on the vehicles.
“We were flying technicians halfway across the country to help us because they had experience installing the software and/or the devices in the vehicles,” Leyva said. “And that was costly.”
Additionally, the company had some challenges with not getting Internet service in the lots for the software to work correctly. “Sometimes the lots were too close to the airport and that interfered with the signal.”
Despite challenges, self-service rental has been beneficial for Airport Van Rental. So far, the company has been able to reduce its costs with the contactless locations.
“We have been able to reduce expenses with the contactless locations because of less overhead and less labor costs,” said Leyva. “Even if you are doing the same amount of revenue per unit, you can still put more to the bottom end.”
Additionally, Leyva said that the customers have taken better care of the self-service rental vehicles. “The customers appreciate the service; there is more accountability for the vehicles,” he said. “Claims have decreased. And with regards to theft, we haven’t seen anything more or less than what we would see at our brick-and-mortar stores.”