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Prior to COVID, I was solid consumer of business rentals. Rideshare is good for getting to the airport and back, but if I'm spending a few days at the destinat

by wenc 6y ago

Prior to COVID, I was solid consumer of business rentals. Rideshare is good for getting to the airport and back, but if I'm spending a few days at the destination (which in my case is usually suburban), a rental car can be both cheaper and more convenient than rideshare in smaller, underserved markets and in the suburbs. Also if you're making multiple stops of indefinite length, catching rideshare each time can be frustrating. Rideshares also have a limited radius while rentals don't. If you need to drive 2-3 hours from the airport to your destination, it's easy on a rental but not really advisable on a rideshare (possible but rideshare drivers hate it). I wonder if the problem with car rentals maybe isn't the business model, but how modern the operations are. I'm with National so I get to pick my own car. National has really nice cars so sometimes I end up with nice rides like Audi A3s for the price of a midsize (~$30/day -- I have free executive membership through my credit card). It's really not that much of a hassle with the app -- get off plane, walk to lot, pick a nice car, drive off. Driver's license, credit card + insurance etc. are all electronic. No dealing with any CSR. Only human interaction is at the exit where they check your DL (or QR code on your phone), scan your car's barcode and then open the barrier arm. My avg time to check-out is ~10 minutes, and returns are ~5 mins (excluding gas fill-up). This is with National. The Hertz experience is much more plodding. Their systems are a little more archaic. You have to check in at the counter if you don't have Hertz Gold, and you can't pick your own car. They're more expensive than other rental companies but their vehicles definitely are not nicer. Hertz has the largest market share but the worst customer experience of the majors.

rexreed 6y ago
Good insights, and definitely reflects the reality of the year 2020. But let's bring ourselves back to the year 2000 when Internet was slow, Netflix didn't exist, and the business model for video rental was strong. Back then it was hard to see the writing on the wall. Bring ourselves back to 2020. We have some new factors that we have visibility into that are changing the dynamic for the rental car industry: * Work is becoming increasingly remote. People are becoming more comfortable not traveling for business meetings or conferences. * The gig economy is heating up. Even if the rideshare business is still in its relative nascence, there is no doubt that the rideshare will continue to be a trend. * It's quite possible that the ride share firms will move to a subscription-based model (closer to Netflix) rather than a consumption-bsaed model (closer to Blockbuster) in the future. Paying per-ride has its hassles. A monthly fixed subscription model with predictable consumption limits can change the picture. Your $30/day rental probably didn't end up being $30/day. With all the extra fees (which usually doubles the daily rate or more), gas, parking, and tolls, you're probably spending closer to $60-$70/day. This is a daily rate. Would you pay $100-$200 on a monthly rate for unlimited trips within a radius? Possibly, if there was sufficient ride share supply. The problem of course is on the supply side. How do you pay drivers a share of a monthly subscription model when supply-side pricing is on a consumption-basis while demand-side pricing is on a subscription-basis? This is the challenge for the industry. But I think that challenge will be solved.
- deleted 6y ago
  [deleted]
- wenc 6y ago
  No doubt the external factors post-COVID will alter the travel landscape and I've no good feeling on where that's going to take us. So there's one big factor that plays into all of this: for business travel, the company's paying. Employees don't really bear the cost, so the incentive is to choose the more convenient option. Parking etc. can all be expensed (not a big deal with Spothero, etc.). And companies usually have negotiated rates with rental car companies. So there's inertia. I just checked my National invoice for my last LAX rental: the nominal daily rate for was $31/day, but with airport concession fees, tax, etc. it came out to $37/day (the car was a 2019 Dodge Challenger). I don't remember how much I paid for gas but gas is pretty cheap these days so it couldn't have been more than $40 (200 miles driven). So yes daily rate is higher, but not really double. Would I pay $100-$200 for unlimited trips on rideshare? Not for business travel, no because like I said, for the non-urban geographies I work in, a rental car is just more convenient and the company's paying (plus my time costs money). For personal trips? Well, Lyft does have a subscription program for commuters but I'm probably not the target demographic (I have my own car for groceries, but otherwise I walk everywhere or take the L). I also have a free Lyft Pink subscription through my credit card but that hasn't really increased my Lyft use. I suspect during COVID the attractiveness of rideshare will actually decline -- I'm personally wary of getting into a confined space with someone else even with every precaution taken. But post-COVID, it's likely things will return to normal. Rideshare has been and will likely continue to be an important component of my urban transport mix. I just don't see it being dominant over all others.
  - rexreed 6y ago
    Agree with you. I don't think the demise of rental companies is immediate or imminent, but I believe it is inevitable. The forces are indelible. BTW, your calculation agrees with my statement. $37 for car including fees, $30-$40 in gas, plus unknown parking. I was spitballing $60-$70 for day, and it seems those things do indeed add up to that amount. Higher gas prices, more expensive parking, and longer commutes make those figures even moreso. I agree with you that if the business foots the tab, the employee might not care and would just go for convenience. But the biggest factor impacting business travel is not the cost of rental cars, but the shift to virtual events and remote meetings. This is another indelible force for the rental industry. As mentioned, I think the demise is not in these next few years, but by 2030 I believe we'll be writing the post-mortem on rental cars and how the industry has transitioned to something else.
LeoPanthera 6y ago
I do have Hertz Gold, but I've never paid for it. I think I originally got it due to a credit card promotion, but they renew it every year, for free. My experience of renting has always been just like you describe for National. Walk to the lot, find my name on the screen, go the indicated row, pick any car from that row, get in, drive out. I've been Hertz-loyal all this years precisely because the experience is so zero-effort.
- WWLink 6y ago
  lol, I've never had such a good experience renting a car. I suppose because I've never really rented from an airport. They somehow almost always take at least 30-45 minutes. And don't get me started about enterprise.
- rsync 6y ago
  "My experience of renting has always been just like you describe for National." This is my experience with Hertz Gold as well and I suspect it is about the same with all rental car companies: if you are a member of their club, you can breeze right through and drive off the lot in about five minutes. Except abroad ... I can only speak about European cities, but the Hertz locations have no idea what I am talking about when I talk about my name on the screen or just grabbing the car and driving out - they think I am a crazy person and they work for Hertz. Renting in Europe is the same (terrible) experience as walking up to a rental desk in the US as a non-member.

by wenc 6y ago

rexreed 6y ago

Good insights, and definitely reflects the reality of the year 2020. But let's bring ourselves back to the year 2000 when Internet was slow, Netflix didn't exist, and the business model for video rental was strong. Back then it was hard to see the writing on the wall. Bring ourselves back to 2020. We have some new factors that we have visibility into that are changing the dynamic for the rental car industry: * Work is becoming increasingly remote. People are becoming more comfortable not traveling for business meetings or conferences. * The gig economy is heating up. Even if the rideshare business is still in its relative nascence, there is no doubt that the rideshare will continue to be a trend. * It's quite possible that the ride share firms will move to a subscription-based model (closer to Netflix) rather than a consumption-bsaed model (closer to Blockbuster) in the future. Paying per-ride has its hassles. A monthly fixed subscription model with predictable consumption limits can change the picture. Your $30/day rental probably didn't end up being $30/day. With all the extra fees (which usually doubles the daily rate or more), gas, parking, and tolls, you're probably spending closer to $60-$70/day. This is a daily rate. Would you pay $100-$200 on a monthly rate for unlimited trips within a radius? Possibly, if there was sufficient ride share supply. The problem of course is on the supply side. How do you pay drivers a share of a monthly subscription model when supply-side pricing is on a consumption-basis while demand-side pricing is on a subscription-basis? This is the challenge for the industry. But I think that challenge will be solved.

deleted 6y ago
[deleted]
wenc 6y ago
No doubt the external factors post-COVID will alter the travel landscape and I've no good feeling on where that's going to take us. So there's one big factor that plays into all of this: for business travel, the company's paying. Employees don't really bear the cost, so the incentive is to choose the more convenient option. Parking etc. can all be expensed (not a big deal with Spothero, etc.). And companies usually have negotiated rates with rental car companies. So there's inertia. I just checked my National invoice for my last LAX rental: the nominal daily rate for was $31/day, but with airport concession fees, tax, etc. it came out to $37/day (the car was a 2019 Dodge Challenger). I don't remember how much I paid for gas but gas is pretty cheap these days so it couldn't have been more than $40 (200 miles driven). So yes daily rate is higher, but not really double. Would I pay $100-$200 for unlimited trips on rideshare? Not for business travel, no because like I said, for the non-urban geographies I work in, a rental car is just more convenient and the company's paying (plus my time costs money). For personal trips? Well, Lyft does have a subscription program for commuters but I'm probably not the target demographic (I have my own car for groceries, but otherwise I walk everywhere or take the L). I also have a free Lyft Pink subscription through my credit card but that hasn't really increased my Lyft use. I suspect during COVID the attractiveness of rideshare will actually decline -- I'm personally wary of getting into a confined space with someone else even with every precaution taken. But post-COVID, it's likely things will return to normal. Rideshare has been and will likely continue to be an important component of my urban transport mix. I just don't see it being dominant over all others.
- rexreed 6y ago
  Agree with you. I don't think the demise of rental companies is immediate or imminent, but I believe it is inevitable. The forces are indelible. BTW, your calculation agrees with my statement. $37 for car including fees, $30-$40 in gas, plus unknown parking. I was spitballing $60-$70 for day, and it seems those things do indeed add up to that amount. Higher gas prices, more expensive parking, and longer commutes make those figures even moreso. I agree with you that if the business foots the tab, the employee might not care and would just go for convenience. But the biggest factor impacting business travel is not the cost of rental cars, but the shift to virtual events and remote meetings. This is another indelible force for the rental industry. As mentioned, I think the demise is not in these next few years, but by 2030 I believe we'll be writing the post-mortem on rental cars and how the industry has transitioned to something else.

LeoPanthera 6y ago

I do have Hertz Gold, but I've never paid for it. I think I originally got it due to a credit card promotion, but they renew it every year, for free. My experience of renting has always been just like you describe for National. Walk to the lot, find my name on the screen, go the indicated row, pick any car from that row, get in, drive out. I've been Hertz-loyal all this years precisely because the experience is so zero-effort.

WWLink 6y ago
lol, I've never had such a good experience renting a car. I suppose because I've never really rented from an airport. They somehow almost always take at least 30-45 minutes. And don't get me started about enterprise.
rsync 6y ago
"My experience of renting has always been just like you describe for National." This is my experience with Hertz Gold as well and I suspect it is about the same with all rental car companies: if you are a member of their club, you can breeze right through and drive off the lot in about five minutes. Except abroad ... I can only speak about European cities, but the Hertz locations have no idea what I am talking about when I talk about my name on the screen or just grabbing the car and driving out - they think I am a crazy person and they work for Hertz. Renting in Europe is the same (terrible) experience as walking up to a rental desk in the US as a non-member.