How Would the Car Rental Industry Get Back On Its Feet Post Corona?

Car rental services were gaining momentum before the pandemic Covid-19 hit the world. Businesses were tapping into the potential market and raising awareness among people about the benefits of renting a car. Cars were an affordable and convenient option for the people who were not willing to invest in buying their own vehicles due to factors like lack of parking space, maintenance, and the price.

However, after the coronavirus took over the entire global businesses, things are likely to change for every industry, including car rental. The companies will have to change their operating methods and take some extra measures to regain the customer’s trust and bring back their business on track. As the virus is easily transferable from one person to another, and the surroundings, people are reluctant to use public transportation and carpooling services. In this scenario, the alternative of car rental in corona is likely to be preferred over other transportation options. It is just that the service providers will have to be very cautious of the customer’s welling and cleanliness in their vehicles.

Challenges faced by the car rental industry during/after Covid-19

As the world is in strict lockdown, only the essential business will be open, such as daily needs, groceries, and medical shops, along with the hospitals and government offices. Sadly, car rental in corona does not come under “essentials” and thus, the industry might have to face a low time in the coming days. Let us understand the challenges faced by the car rental business startups as well as the established companies.

• Irrelevancy of location

  Vendors or service providers who have the garage on rent are facing financial issues as they have to pay the rent every month, in spite of bearing the losses in the market. This is also forcing the providers to shut down their businesses to save money. Besides, if the garage is not suitable, and the tenure of lockdown is increased with strict policies, the provider will have to suffer the losses, again.

• Mobile Self-Collection, Unlocking

  Social distancing is the current biggest roadblock in the development of many industries. There are still many businesses that require the customers to visit them and interact face to face. These businesses ask for customers’ approval on paper, along with their signature and other relevant documents. The car rental service is also one of them. The rider/customer needs to sign the agreement, submit the copies of the license and other important documents at the store before picking the vehicle for a drive. In the present situation, this is another major challenge faced by the market.

• Increased demand for deliveries

  During the lockdown and spread of corona, people are unable to step out of the house to get things and work done. This has increased the importance of the home delivery manifold. People are ordering daily essentials, food, and groceries online. And thus, in case they would want to rent a car, they would prefer home delivery for the same, instead of pick up option. The customer now demands the ecosystem where instead of walk-in first, delivery-first would be encouraged more.

• Need for flexible policies

  As the world economy has come to an indefinite halt, the operational policies of the car rental companies need to be agile, so that they can be modified based on the customer demand and market scenario.

• Improved sanitation and hygiene

  Cleanliness and hygiene have become the utmost priority in this pandemic. Everyone is putting more effort into keeping themself sanitized and their surroundings clean. Besides, people have always been keen on the cleanliness of the cars they drive or rent. Thus, in the current situation, they would be extra careful and alert about the cleaning process and hygiene of their vehicle to safeguard themselves from coronavirus and its infection.

• Improved return policies in lockdown

  Since there are several lockdowns being imposed everywhere, the car rental companies will have to revise their policies as lockdown-proof, such that the customers would not have to pay for the extra days in the lockdown. If a customer is unable to return the car due to adverse conditions, they should be exempted from paying extra or overhead charges. Such allowances are now a necessity for car rental startups to retain customers and attract new ones.

How can the car rental companies cope up with the challenges?

Tackling coronavirus is the biggest challenge after World War II, where the global economy and human life are being greatly suffered . With no cure for the infection at present, precaution and self-care is the only option left. In this scenario, car rental services are also likely to get affected. Here are some ways in which the companies are dealing with the challenges.

1 Pay attention to the company’s assets

In the times of lockdown, it is important to take care of the company assets. Thus, one can disconnect the battery terminals of the cars when not in use for a long time. This would also ensure that the vehicles would be in working condition when needed. Service providers can keep their stores open for emergency purposes, where the workers going for work need to travel within the city. These car rental companies can modify their fleet to avoid vehicles that require high maintenance and are efficient for local travel.

2 Evolve according to the customer demand

When the market reopens after the lockdown and the Covid-19 cases decrease, the customers will have new demands, based on the government regulations and their safety. Here, car rental companies will have to show agility in their norms and evolve according to customer sentiments. For example, sanitization is the utmost priority for the customers, for which companies might have to hire trained workers.

3 Keep team motivation upheld

Not only customers but the employees of the companies are also important for the flawless running of the market and startups. Companies need to keep their employees engaged and connected to maintain their enthusiasm and sustain their motivation. The employees also need assurance about their job, which is at stake in many places due to in-affordability.

4 Encourage employees to bring their own helmet

Just like the use of sanitizers and face masks, the companies also need to encourage the use of a helmet for their employee’s safety. However, the riders will have to be cautious of not sharing their helmet with anyone else. This will also encourage the customers to opt for bike rentals with personal rider gears.

5 Make short term plans

Since the situation is changing rapidly, its effects on the car rental industry are also fluctuating. This calls for short term planning and implementation. After all, customers and their demands are the only boosters that would keep the market running. Companies need to provide the best and highly satisfactory service to their customers to restore their trust and make them invest in their services. This could also mean revising the rental price and offering discounts to them. Companies need to analyze their current business model and, if required, make changes in them.

6 Monitor your expenses

The company has to take care of their customers as well as employees. In this scenario, the cash flow is a major challenge. When the demand for rental cars would increase, the companies would have to hire more resources to perform additional tasks. For this, firms need more funds to manage the business.

How are the car rental companies helping their drivers in this pandemic?

Drivers working at the airport parking lot, on side streets, and with online car rental agencies are facing a financial crisis in this pandemic due to lower demand and shut down of the airports and other transportations. According to the research, the low car rental demand might lead to a reduction in prices for car rental companies in the coming times. This will affect the business even more. This might also lead to cut down in employment for drivers.

• To deal with this issue, the companies are coming up with some concrete solutions, such as marketing their cleanliness process and the precautionary steps they are taking for their customer’s well being. This would assure the customers of hygiene and personal safety.
• Besides, they are structuring some package deals of long term rentals and one-way rentals. For example, a car rental company is offering premium luxury cars for a nominal cost for a day. But to avail of the service, the customer will have to take a minimum of 5-days package. Similarly, these companies are also providing long term packages on a weekly and monthly basis. This is estimated to be profitable for the customers as well as the companies.
• The car rental companies are now being more flexible and considerate for the consumers, as they are going soft on the cancellations and changes from the customer’s end, relaxation in age restrictions, delivering vehicles to the locations suitable for the customer, and reducing the rental cost. This is encouraging people to opt for the service, saving the employment for many drivers as well.

How can passengers contribute to making car rental a success again?

In order to make the car rental business up and running again smoothly after the pandemic, the customers will also play an important part. It will take a long time before things get back to normal. In this case, people will have to adjust to the environment and the regulations implemented by the government of various states. This also means that one can rent a car for their traveling, but with altered norms and extra precautions and safety in terms of finance and hygiene both.

• Skip the counter

  Passengers can avoid the infection to a great extent if they avoid standing in the queue at the counter. Car rental service providers are now working on providing the cars at the desired location for the customers in the running condition. This saves time as well as rebuilds the customer’s trust in the service.

• Do not opt for prepaid deals

  While the companies are working on modifying the rental policies as per the situation and customer demand, this will still take time. So, to be on a safer side, and save money from getting wasted, it is better not to opt for the prepaid deals of rental cars, as most of the prepaid deals are non-cancelable. It is always better to pay for what you use. Or one can also opt for a postpaid, or ‘pay later’ option.

• Get your own toll transponder

  Toll transponder is a wireless toll collecting system that automatically reads the usage of vehicles on toll roads, and charges accordingly. Having a personal toll transponder reduces the car rental for the particular vehicle as the customers will themselves pay the toll tax. It saves customers from renting an expensive car from the rental car providers. Besides, it will also help avoid interaction with the toll collector and reduce the chances of infection in the future.

• Sanitize from your end

  Even though the car rental firms are keen on checking for sanitization and hygiene, to be doubly-sure one should also adopt the usage of sanitizers and anti-germ wipes to keep their interior of the cars clean.

Future scope post corona for the car rental industry

With the constant efforts of various countries to find the vaccine for the coronavirus, the virus will soon pass away. This will gradually make people step out of their houses and resume their regular life as it was before the pandemic. This is a positive viewpoint for the companies in the market. Once the customers get back to their daily routine, the demand for the things would also surge gradually. This includes demand for car rentals for traveling. However, initially, people would be hesitant to invest in renting cars and bikes; with the changed policies from the companies in favor of the customer will bring them back to the store.

Above all, vehicle cleanliness and sanitization would be of utmost importance more than ever. And the companies with more agile regulations and policies would flourish faster in the market. In this scenario, companies that have maintained good connections with their customers will gain from these connections as they will still have their trust.