Big Three Car Rentals Look at Innovation to Stay on Top
May 2, 2019
Car rentals Enterprise, Hertz and Avis unveil new practices
There’s hardly an industry involving products or services that haven’t been bitten by the Innovate Or Die virus in recent years, thanks in part to technology and a series of industry shifts. Car rentals are no exception, especially with the emergence of ride-sharing competitors that, according to a recent Forbes article, have eaten their way into the market.
If that’s the case, the performance of the biggest car rental corporations haven’t shown it. Enterprise, by far the biggest player, reported that 2018 was a record year for revenue at $24 billion. The Hertz Budget group experienced an eight percent gain in earnings, which totaled $9.5 billion, while Avis full-year results indicated revenue grew by three percent to $9.1 billion.
If the likes of Lyft and Uber are taking business away from the heavy hitters, they’re certainly not reflected in the financials. Besides, both companies, which lead a field of ride-sharing upstarts, have existed for a decade before becoming a perceived threat on the car rental horizon, proving its emergence hasn’t exactly been perpetual enough to invoke paranoia among the more established set. Still, with decades of experience behind the big three car rentals, it’s not like they’re simply waiting on the hill for the competition to catch up.
Enterprise recently announced its new subscription program to create more flexibility with consumer options, which was launched in three U.S. states. The company has also acquired ride-sharing firms Zimride and Mobileye to elbow its way into that emerging market, with possibilities of finding opportunities that would better serve the car rental business model they created for themselves. Enterprise is also checking out how autonomous technology can be implemented into its fleet.
Avis is going bullish on car connectivity technology, which was revealed at the National Car Rental Show in April in Las Vegas. The company is already at work diversifying its mobile app to amalgamate its entire fleet to new technology by 2020 to automatically report on car maintenance status and driver conveniences like optimal seat position, interior temperature and radio presets. And thanks to the launch of its Express Drive initiative, it plans to lease vehicles to drivers under contract with Lyft. Another collaboration with autonomous ride-share provider Waymo will include sharing Avis technology with the Google startup.
As for the Hertz Budget group, the conglomerate’s biggest gains in technology is more airport-based, where its Ultimate Choice program enables Gold Member clients to go straight from the terminal to the tarmac to pick up their ride without a single stop at the company rental office. Additional features with this convenience include CLEAR airport security software to ensure trouble-free access to clients’ selected vehicles as well as a Spot Hero function to book parking space in advance. Hertz is also negotiating with Uber to make its fleet available to the ride-sharing company’s drivers.
By looking for opportunity, even finding it among their adversaries that could turn out to be profitable partners, Enterprise, Hertz Budget and Avis are demonstrating the out-of-the-box thinking necessary to compete in an unpredictable and changing market.
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