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The challenges that new forms of mobility are placing on rent a car

Trends

November 14, 2019

9 MIN of Reading

An application installed on the smartphone, a simple registration and a touch can be enough to rent and start driving a vehicle that you located near you. The solution is simple, practical and is part of the new forms of mobility in large cities, representing a change in the business model ofrent a car.

Going to a Rent a Car to rent a vehicle for 'x' days and returning to the same place to deliver it is no longer the only reality of car rental services,Auto Parts Webshop adapt their offerings to a new user profile - more technological, mobile, and motivated by the user experience. Thus, a new business model emerged that “transformed the process of renting a car into a much more convenient and immediate reality", note Duarte Guedes, CEO da Hertz Portugal.

Providing car hire services for around 100 years, Hertz Portugal is one example of how the sector is changing. It has developed Hertz 24/7 City, one of the first carsharing systems to circulate in the city of Lisbon, with a 100% electric fleet and access to technology developed by a Portuguese start-up.

The new business models for the automotive sector

The change in behavior of the new generations – who do not insist on owning a car – along with the difficulty in driving and parking in large cities, pressured a change in the rent a car segment and in the automotive market in general. In this change, data were fundamental pieces that, from the outset, allowed the collection of information on how people move in cities and identify business opportunities.

To respond to new challenges, car manufacturers have developed carsharing solutions for cities. Clear examples are the Emov project by Grupo PSA and DriveNow by BMW.

In the case of companies in the rent a car sector, the knowledge of the new reality led to new ways of delivering the product and working with other players to offer tailored services. “The client will be a user of various modalities, depending on what is most convenient in each situation", explains Duarte Guedes, this in a context where the world is transitioning from an ownership economy to a sharing economy.

The new challenges of rent a car services

For this reality of carsharing and new rent a car services to be possible, there were two fundamental elements: telematics and business digitalization. And Duarte Guedes explains why: "The so-called digital businesses put increased pressure on the logistics part, and the data [from telematics] are fundamental for those who manage" this component.

When it comes to car fleets, we are dealing with extremely competitive models and, therefore, the optimization of operational costs is also a key factor, says the CEO of Hertz Portugal. For example, having access to auto data, which allows estimating the maintenance and repair costs of the fleet, has become a fundamental element for rent-a-car companies. On the other hand, telemetry allows monitoring the correct use of the car by the customer, reflecting on the final cost of the service provided.

Changes are happening, but a true revolution in the rent a car business, says Duarte Guedes, will only happen when autonomous driving is widespread. Until then, he guarantees, fixed locations, such as stores and rental centers, continue to allow for economies of scale and other commercial opportunities.

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