international car rental company, independent rental providers, travel service providers

The Major Concerns For Independent Operators In 2022

The pandemic has had a devastating effect on many industries, and the car rental industry is no exception. The independent car rental companies are the most troubled of all, owing to the requirement to prosper in their local car rental markets and competition from the larger brands.

The leaders of four independent automobile rental firms took part in a roundtable conference at the recent International Car Rental Show to address their challenges in overcoming the pandemic hurdles. These panellists, led by Sharky Laguana, CEO of Bandago Van Rental, also expressed their perspectives on independent rental providers in this new context.

Shortage Of Cars

Creating a fleet is one of the most challenging problems for independent operators, and it necessitates the addition of new vehicles. Michael DeLorenzo, senior vice president of NP Auto Group, expressed his concerns, claiming that most of his regular new vehicle lenders have shown empty hands and that some of those who have promised to offer new automobiles will only be able to do so by early 2022.

Dan Miller, an independent car-rental operator, is curious about the larger rental corporations’ vehicle acquisitions. But how does the acquisition of automobiles by large corporations affect smaller corporations? In response, Miller argued it influences rental pricing, which turns out to be an extra burden on top of the existing ones on the independents. Miller has just purchased six Advantage Rent Car locations.

Because of the rental shortage, independents are being obliged to employ their cars more frequently than they used to. DeLorenzo commented on this, saying he was unclear whether he would be happy pushing his automobiles for 60,000 miles or even to 88,000 miles.

However, for organizations that deal with VIP clientele, such as Midway Car Rental, this is not viable. Brett Lippel, president of Midway Auto Group, was confident that his VIP clientele would never prefer or tolerate renting vehicles with excessive mileage. Lippel stated that while Midway could increase its capacity through new partnerships such as that with HyreCar, it had a hard time procuring large vehicles and SUVs.

According to DeLorenzo, NP Auto Group will increase its fleet by purchasing vehicles at a reasonable price on the used car market while judiciously extending the life of its present fleet. He expressed that getting automobiles would be a tough challenge that would need additional money, but it is possible. Because of the extended period of used automobile scarcity, disposing of cars would also leave significant residuals on the opposite side. He agrees with his partner Bill’s words—there should be a new sold automobile to generate a used car.

A Shortage Of Employees

According to Miller, the automobile rental sector, like other industries, is experiencing a labour crisis, and raising pay does not appear to be retaining existing employees or attracting new ones. He stated that management is looking for inventive methods to provide new possibilities for its staff to develop and attain their full potential, such as offering new options outside their typical tasks. This is necessary since there are few opportunities for advancement for employees of these businesses.

In terms of retaining the staff, Lippel didn’t think it was a huge deal because Midway expanded additional offices and promoted its existing employees. He had great difficulty hiring new ones because most of the interviews had a no-show percentage of 80-85%.

DeLorenzo shared his concerns since it was the same scenario with them, too. Although the interview process has been simplified from in-person interviews to phone interviews to Zoom interviews, there was no silver lining in recruitment. Staffing constraints, according to DeLorenzo, are also contributing to extended maintenance schedules, as is the situation with lenders. Everything, even recalls, is progressing slowly.

Future With Electric Cars

It is widely known that rental firms are experiencing vehicle shortages. Richard Lowden, CEO and creator of Green Motion in the United Kingdom, could extend the size of his firm’s fleet by acquiring a large stock of electric cars as his company branded its eco-friendly fleet. Electric cars presently account for 30-40% of Green Motion’s fleet in several of its sites. 

He considers himself lucky because most OEMs have transitioned to environmentally friendly fleets through electrification. Although electric vehicles are widely accessible, traditional rental companies are hesitant to electrify their fleets.

Many small businesses do not have the infrastructure to accommodate electric cars, making them an unfeasible alternative. Still, the price has dropped down in the last two years, and installation has become simpler, according to Lowden.

His advice to deal with clients concerned about the range of electric vehicles is to query about their trip ahead of time, such as the destination, the distance to cover, and so on, and help them plan the trip accordingly.

Because the future will almost certainly be dominated by eco-friendly electric vehicles, it is preferable to construct an infrastructure that is compatible with such vehicles.

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