Amazon Flex could create more car rental opportunities
More independent drivers can lead to a larger delivery revenue stream
For months, the pandemic has wreaked a great deal of havoc on the hospitality industry, especially the transportation sector that only now has begun to demonstrate any recovery. More people either staying or working at home has significantly cut down on commuting, with travelling primarily limited to destinations deemed as essential. At the same time, shopping ventures have eroded in favor of more consumers ordering online, a boon for the likes of Amazon.
At the same time, Amazon Flex, the conglomerate’s delivery arm that started in 2015, has quickly become a major player in getting goods to consumers. Independent drivers who used to rely on the service as a supplementary income source are now realizing greater earnings than ever, a side effect of the spike in online shopping.
It’s also beckoning more individuals to jump onto that delivery bandwagon, creating more opportunities for car rental companies. While it makes sense to reach out to Amazon Flex drivers, which has at least 75,000 drivers, a figure that’s expected to double before 2021, operating in 50 U.S. cities, contractors working for similar companies like DoorDash and Postmates are also worth pursuing.
It’s an avenue that’s helped Ian Kusinitz, whose Empire Rent A Car operation is managing a feasible bottom line due to finding new revenue opportunities. While he’s found that the demand’s out there, upkeep costs are higher given that the drivers for the likes of Amazon Flex log a lot of miles that add to the wear and tear on a vehicle. “Those maintenance costs are real,” said Kusinitz during the ICRS Experience online conference in October, “and you have to make sure you’re charging the right price for the product, knowing the amount of use that [the vans are] going to get.”
Extra incentive to rent, instead of own
Balancing rates and cost might make for a management headache, but car rental companies can still offer a great deal of incentive for drivers to rent instead of using their own vehicles.
For openers, a company will very likely have something in its fleet that’s ideal for a driver, since most shippers do have a set of standards when it comes to vehicles. Amazon Flex, for example, stresses the smallest vehicle they’ll accept is a four-door midsize sedan. Anything more compact won’t do.
Rentals are also safer, given the additional features on late-model vehicles designed to secure drivers, passengers and cargo. Additionally, the maintenance going into each rental can help decrease the likelihood of an accident. That bodes well for peace of mind, since one law firm stated that drivers working for Amazon Flex in particular are more likely to be involved in an accident than most motorists.
While drivers might haggle over how renting a vehicle can eat into their profit margins, it’s a weak argument if their own vehicles aren’t particularly reliable. And given the rigors and miles that can punish a vehicle over time, a well-maintained rental is a far better option if a driver’s main vehicle is considerably older and is more prone to breaking down, a situation that can eliminate that profit margin entirely.
If price is definitely an issue, car rentals might have a number of options that can fit into a driver’s budget. Most companies offer competitive flat rates for a certain period of time with unlimited mileage and maintenance costs covered in the price. Regarding insurance, most rental firms will offer advice on what coverage might be needed. Drivers contracted by Amazon Flex only need regular car insurance, although some states make it mandatory to tack on commercial insurance, for starters.
Finally, car rental companies can offer additional incentives and perks for drivers, such as subscriptions,which might have an option in one of its tiers to suit a client’s budget. Benefits include the ability to swap out vehicles, roadside assistance and additional accident and liability coverage. It’s one of many possibilities for rental firms to land a consumer base that’s quickly emerging in a pandemic economy.