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Thursday, 07 May 2020 00:43

COVID-19 and Car Rental: Challenges from a Platform’s View

Written by Ammar Akhtar, Auto Rental News

Index

COVID-19 is without a doubt the greatest challenge the world has faced since World War II, if we consider the number of cases in comparison to SARS, MERS and Ebola.

The world is in strict lockdown, and that means it’s not business as usual anymore; neither are relationships, life or the world in general “as usual” anymore. While the presence of COVID-19 on our surfaces and in the air is testing our cleanliness, discipline and certainly our physical immunity, this social distancing is also testing our social immunity---it’s testing our ability to absorb the pressure of being alone and working alone. 

 

In more than 12 years of car rental experience, I never imagined a situation like this.

 

Almost three weeks ago, I received an email that most car rental branches would partially close due to the COVID-19 lockdown. Car rentals are not considered an essential sector, so we had to follow strict lockdown measures and wait for the restrictions to be lifted before we could resume operations.

 

As the founder and CEO of a car rental platform, when I heard the news, I felt the earth shake. The technology we had developed, the ecosystem we had created and all the hard work we had put in for so many years suddenly became “redundant” and “non-essential” in a matter of minutes.
 
But soon I realized our car rental marketplace is already online, and we don’t have physical locations, huge staff, high overhead costs, etc. Then I started wondering what kind of trauma and difficulty traditional car rental companies will go through in this situation. 

 

Following are the lessons I believe the car rental industry needs to learn from the COVID-19 pandemic.

 

Locations are Becoming Irrelevant

 

Opening and maintaining a rental location is a decision to make very carefully, as it can incur a lot of overhead costs. If the location doesn’t perform as expected, it can have a negative impact on the bottom line. Having an airport location and one or two downtown locations should be enough. 

 

I believe what we can learn from the pandemic is that having too many locations can pose a serious threat in this lockdown situation. I believe car rental companies will be looking to optimize their locations during, and possibly even after, this situation.

 

Demand for Deliveries Will Increase

 

Today’s consumer is ordering everything online. E-groceries and food delivery apps are flooded with orders. Considering this behavior, I believe car rental customers are also going to be delivery-savvy and will be looking for car rental delivery options as opposed to pick-up.

 

I believe we need to rethink our delivery strategy and create an ecosystem where “delivery-first” can be promoted more rather than “walk-in first.” Our digital interface should adapt the same way, making ordering a car as easy as ordering food online.

 

Digital Strategy: Mobile Self-Collection, Unlocking

 

The biggest roadblock to “business as usual” in this COVID-19 period is social distancing, as many of the businesses around the world are still based on face-to-face interactions across the counter or outlet based transactions, which is why digital transformation for car rentals is required.

 

I am talking about the concept of “self-unlocking,” which will play a huge role in our industry going forward. 


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