Monday, June 3, 2013

Renting A Car Should Be Easier

The Budget counter at OKC.
We've all seen the commercials that make renting a car look like a glorious event.  And for those of us who are road warriors, we know that the car rental is the weak link in the chain.

I've rented at least once from all of the majors rental companies.  I've settled with Budget.  "Why?", you ask.  Why not?  I don't believe that it really matters.

My big issues stem from the lack of a customer focus.  Budget rewards me with 50 to 100 United Mileage Plus miles (at select locations), and the Budget Business Program, which earns me a few dollars with each rental.  However, I have no real reason to stay with Budget, they just got lucky to get me.

There's not an amazing system out there for any Car Rental company either.  Budget and Avis both have an app.  Do you know what "Hello World" is?  Is commonly the first app that any programmer builds.  All it does is say "Hello World" on the screen.  That's about how much the Budget and Avis apps do.  And within their websites you have to know your confirmation numbers, the system doesn't present those for you.

Airport arrival is also annoying with many car rental companies because it's so very different at each airport.  I'm not talking about the location of the car rental facilities, but the process.  At some airports I need to go to the counter, at some I go to the Fast Break counter outside, and at others I just go get a car.

Where does this problem stem from?  The business model of a car rental company stems from its profit centers.  All car rental companies make money when they purchase their cars, not when they rent them.

The Life Cycle of your Rental Car
Rental cars are often bought in bulk by a local/regional manager, not on a national basis.  The goal is to buy enough of one car to get a strong discount.  As you know, cars depreciate (very quickly I might add), so the goal is to purchase a car with a strong enough discount that you can sell it 40,000 to 60,000 miles later for about the same price, or even make a profit.  Once the car is purchased, they need to get it on the street, making money, as soon as possible.

So, you rent the car... You ABUSE that car.  There's a lot of rough travel that happens during that time. Come on, you know you rent the Impala and drive it off road.

When the car hits a certain threshold (which really varies by location), the car is retired and sent for Recon (industry term: recon is a term used to describe reconditioning of the car which includes and cleaning or repairs needed before sale).

Once the cars are ready they are sold.  It used to be that most of the cars were sold wholesale at the auction, but more and more the car rentals companies are selling retail to buyers -- this practice results in  a higher sale price, which means more profit in their pockets.

So, here's the truth about car rental companies, they don't care about the people who rent their cars.  They care about the buying, selling, and depreciation of the cars.

Renting a Car Should Be Easier
Whats my point?  If rental car companies focused more on making the rental experience better, there's a chance they could increase their ancillary revenue.  Yes, I am calling the rental portion of their business ancillary because it is.  That's not where the money is made.

Take it from me, it's never going to happen.  Until some rich hotshot gets in the business, no one is ever going to make a great car rental company.

But, hey, I'm just some guy who likes to look at airplanes, so what do I know?


Jordan Mallory said...

This is an interesting article. I have always rented a car when I travel to Georgia. It was easy for me, I just researched Rental Cars Augusta GA and I found plenty of options.

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Rachel Myranda said...
This comment has been removed by the author.
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