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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 exis

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.
  - ghaff 6y ago
    Uber's made some difference for me at the margins. I've never tended to get a rental car if I'm just going from the airport into a city and back. But I did tend to e.g. if I were going to some location around Silicon Valley even if the car were mostly just going to sit in a cheap/free hotel parking lot. It was generally easier and it meant I had a car if I wanted to run out to a store or whatever. Uber pricing and convenience make me think harder about the equation. If I'm really pretty much just going to a hotel for a few days, it's probably a wash so I may just take the Uber. I'll still rent if I'm going to also be visiting friends or going for a hike--or taking a longer drive to somewhere that I may not even have cell reception. But definitely less than I used to even pre-COVID. And I imagine that urbanites who default to not driving rent even less.
  - chucksmash 6y ago
    Are you booking your cars at a rate negotiated by your employer? Aside from getting a free rental credit every X days, I don't see anything about discounts in the Emerald Club benefits section. Playing around with variations on a 7/13-7/17 M-F rental (also trying 7/11-7/18 Sat-Sat, checking in Manhattan, at LGA, and at DSM in Des Moine, IA for comparison) I'm seeing numbers 1.5-3x higher. I'm curious if the difference is entirely price discrimination or if there is something else like a negotiated bulk rate at play. Numbers are for lowest tier car, same pickup and drop off location. Manhattan M-F: $72/day base ($348 w/ taxes and fees) Manhattan Sat-Sat: $59/day base ($501 all in) LaGuardia Airport (luxury car, economy car is $22/day more) M-F: $94/day base ($512) LGA Sat-Sat: $73/day base ($693 total) Des Moines International Airport (standard car, economy car is $6/day more) M-F: $92/day base, $472 total Des Moines International Airport Sat-Sat: $49/day base ($463 all-in) ---- So... 1. Lowest I'm seeing is $49/day, which is why I ask in the first place. 2. Pricing shenanigans of a Saturday to Saturday rental coming out cheaper than a Monday to Friday rental in the case of a) 7 day Manhattan vs 5 day LGA and b) 7 day DSM vs 5 day DSM are so frustrating. Surely there's room in the economy for a competitor who offers transparent, predictable pricing? Dealing with industries where you know they are milking you based on reverse IP look up/browsing history/demographic profile is infuriating. How can someone be loyal to any company whose pricing model is "the absolute most we think we can get out of you, personally"?
cbhl 6y ago
I thought that the car-share model is pretty well established in Europe? I think it has basically died in the US though: - Zipcar got bought out by Avis (big traditional car rental company), and many properties terminated their contracts with Zipcar - BMW's car share program left both the SF and Seattle markets - In SF, the problems preventing carshare were mostly regulatory -- they couldn't get permission to use on-street parking (made both public transit and car-ownership factions unhappy) - Lyft started a pilot of traditional full-day car rentals(!)
- Digory 6y ago
  The market for carshare ends up being an awkward market in the US. Ride share solves urban car problems far better than the old taxi services — mostly problems around parking. Carshare tries to solve the parking problem, but for long or complex urban trips, or trips involving city to suburbs and back. But for longer trips in areas where parking isn’t a problem, carshare doesn’t add much compared to established rental car networks (or owning).
  - ghaff 6y ago
    Uber ended up really squeezing car share. Traditional rental mostly continued to be the better choice for weekend rentals or maybe even long day rentals, unless car share had a pickup location advantage. But Uber took a slice out of short-term private transportation for trips that weren't too long or too complex. I know a couple who live car-less in SF and they still use Zipcar and whatever the competitor is. But it's a pretty narrow use case.
jdmichal 6y ago
> 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. Yea, I'm not buying it. People generally won't switch to a subscription unless they think it's going to save them money. And these companies are struggling for profitability as it is.
- ghaff 6y ago
  Me neither. What pay-per-ride hassle? The rental companies I use have my credit card on file. Actually, from a business use perspective, pay-per-ride is probably a lot simpler. I expense the rental. A company is probably not going to typically let you expense a subscription fee unless it were some subscription for the whole company which seems as if it would be challenging for a variety of reasons.
delfinom 6y ago
As someone uses both rentals and ubers when traveling. Rentals are still really a necessity. Uber/Lyft/etc drivers can and still are super picky of their rides and will reject your pickup for awhile just because they can grab longer routes by multi-apping.

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.
- ghaff 6y ago
  Uber's made some difference for me at the margins. I've never tended to get a rental car if I'm just going from the airport into a city and back. But I did tend to e.g. if I were going to some location around Silicon Valley even if the car were mostly just going to sit in a cheap/free hotel parking lot. It was generally easier and it meant I had a car if I wanted to run out to a store or whatever. Uber pricing and convenience make me think harder about the equation. If I'm really pretty much just going to a hotel for a few days, it's probably a wash so I may just take the Uber. I'll still rent if I'm going to also be visiting friends or going for a hike--or taking a longer drive to somewhere that I may not even have cell reception. But definitely less than I used to even pre-COVID. And I imagine that urbanites who default to not driving rent even less.
- chucksmash 6y ago
  Are you booking your cars at a rate negotiated by your employer? Aside from getting a free rental credit every X days, I don't see anything about discounts in the Emerald Club benefits section. Playing around with variations on a 7/13-7/17 M-F rental (also trying 7/11-7/18 Sat-Sat, checking in Manhattan, at LGA, and at DSM in Des Moine, IA for comparison) I'm seeing numbers 1.5-3x higher. I'm curious if the difference is entirely price discrimination or if there is something else like a negotiated bulk rate at play. Numbers are for lowest tier car, same pickup and drop off location. Manhattan M-F: $72/day base ($348 w/ taxes and fees) Manhattan Sat-Sat: $59/day base ($501 all in) LaGuardia Airport (luxury car, economy car is $22/day more) M-F: $94/day base ($512) LGA Sat-Sat: $73/day base ($693 total) Des Moines International Airport (standard car, economy car is $6/day more) M-F: $92/day base, $472 total Des Moines International Airport Sat-Sat: $49/day base ($463 all-in) ---- So... 1. Lowest I'm seeing is $49/day, which is why I ask in the first place. 2. Pricing shenanigans of a Saturday to Saturday rental coming out cheaper than a Monday to Friday rental in the case of a) 7 day Manhattan vs 5 day LGA and b) 7 day DSM vs 5 day DSM are so frustrating. Surely there's room in the economy for a competitor who offers transparent, predictable pricing? Dealing with industries where you know they are milking you based on reverse IP look up/browsing history/demographic profile is infuriating. How can someone be loyal to any company whose pricing model is "the absolute most we think we can get out of you, personally"?

cbhl 6y ago

I thought that the car-share model is pretty well established in Europe? I think it has basically died in the US though: - Zipcar got bought out by Avis (big traditional car rental company), and many properties terminated their contracts with Zipcar - BMW's car share program left both the SF and Seattle markets - In SF, the problems preventing carshare were mostly regulatory -- they couldn't get permission to use on-street parking (made both public transit and car-ownership factions unhappy) - Lyft started a pilot of traditional full-day car rentals(!)

Digory 6y ago
The market for carshare ends up being an awkward market in the US. Ride share solves urban car problems far better than the old taxi services — mostly problems around parking. Carshare tries to solve the parking problem, but for long or complex urban trips, or trips involving city to suburbs and back. But for longer trips in areas where parking isn’t a problem, carshare doesn’t add much compared to established rental car networks (or owning).
- ghaff 6y ago
  Uber ended up really squeezing car share. Traditional rental mostly continued to be the better choice for weekend rentals or maybe even long day rentals, unless car share had a pickup location advantage. But Uber took a slice out of short-term private transportation for trips that weren't too long or too complex. I know a couple who live car-less in SF and they still use Zipcar and whatever the competitor is. But it's a pretty narrow use case.

jdmichal 6y ago

> 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. Yea, I'm not buying it. People generally won't switch to a subscription unless they think it's going to save them money. And these companies are struggling for profitability as it is.

ghaff 6y ago
Me neither. What pay-per-ride hassle? The rental companies I use have my credit card on file. Actually, from a business use perspective, pay-per-ride is probably a lot simpler. I expense the rental. A company is probably not going to typically let you expense a subscription fee unless it were some subscription for the whole company which seems as if it would be challenging for a variety of reasons.

delfinom 6y ago

As someone uses both rentals and ubers when traveling. Rentals are still really a necessity. Uber/Lyft/etc drivers can and still are super picky of their rides and will reject your pickup for awhile just because they can grab longer routes by multi-apping.