Every industry was forced to make drastic changes at the start of the pandemic. Yet, very few were impacted like the car rental industry. They experienced an immediate cash flow problem when business and vacation travel came to a grinding halt. What was a mature and steadily growing industry faced the dual existential challenges of rapidly declining revenue and unused fleets. Roughly 40,000 employees were laid off and around a third of the industry’s operating fleet was sold to the open market. To put that number in perspective, the industry fleet of available cars to rent declined by 750,000 in 2020.
When states eased up on lockdowns and traveling demand increased, consumers quickly gravitated towards renting cars as the safest way for business and leisure travel. This trend quickly created the exact opposite problem. With fewer vehicles, they simply couldn’t keep up with the surging demand from consumers. As a result, the industry faced rising prices and customers experienced fewer choices, higher costs, longer wait times, and less satisfaction in their overall experience.
The industry responded to the daunting challenges by investing in ways to create sustainable growth. While they had been committed to digital transformation before, the pandemic gave them an opportunity to make large investments to rebuild rental fleets with electric vehicles. Doing this had the potential to strengthen the rental car market’s buying power and accelerate movement toward government goals to have at least 50% of new car sales be electric by 2030. They believed the rate of adoption and innovation was likely to increase by engaging in large scale infrastructure investments and exploring ways to evolve the use of technology systems. This was a big step towards achieving their long term business objectives.
It is important to acknowledge that digital transformation is one of many broad terms, or buzzwords, used in the tech industry for years. Zia Consulting breaks down the meaning of the term to include six primary objectives, including modernizing systems, integrative and innovative systems, digitized core organizational processes, automated business processes, automated governance, and investment in new technologies. Together, these six objectives create an organizational strategy that improves efficiency and delivers more value to customers and employees. As experts in the enterprise content management (ECM) market, Zia Consulting helps companies modernize how their information is captured, processed, stored, and ultimately leveraged to better achieve optimal business objectives. With this framework defined, let’s look at how the car rental industry is responding to the external challenges so they can thrive moving forward.
A rapid push to completely digitize the car rental experience for consumers is a consistent theme across the industry. This begins with enabling a complete mobile experience. This includes everything from picking the exact car, changing or confirming reservations, extending the length of a rental, and ultimately returning the car to complete the transaction. All of this is centered around a customer centric mobile experience.
The second trend is a push to create a fully connected fleet by leveraging the power of the internet of things (IOT). This creates tremendous operational efficiency by allowing the fleet to be monitored digitally for maintenance, safety, recalls, and loss management. This investment creates millions of data points each day that are transferred with 5G technology to improve Advanced driver assistance systems (ADAS) and fully autonomous vehicles.
Together, these two trends create effective partnerships that propel the industry towards greater prosperity. A fully connected and digitized fleet uses monitoring technology to optimize the ideal time to sell a vehicle, while also connecting with an online platform that completes the transaction. Rental car companies are also beginning to leverage their unused fleet for rideshares and mobility as services providers. These partnerships can accelerate the market share of electric vehicles and create a new ecosystem where car rental companies have a symbiotic relationship with electronic vehicle manufactures and mobile ride sharing companies.
I feel very privileged to work with a wide variety of industries that allow me to see trends and patterns across the general economy. While every industry is unique, I can confidently say that companies that adhere to the digital transformation principles outlined above are betting on the future and setting themselves up for a higher probability of sustainable growth. At Zia Consulting, we notice that companies of all sizes face common issues that can be minimized or even eliminated. Some of the issues include using systems that are not connected, relying on manual processes that should be automated to reduce risk, and being stuck with inflexible technology that does not allow dynamic and rapid access to infrastructure services that support a rapid customer centric experience.
Like the car rental industry, I’m sure your business is facing unique challenges and can be at a crossroads. If these challenges are related to getting most value out of your information and upgrading your ECM practices, I highly encourage you to reach out to Zia Consulting. We can help you extract value from your content and ensure that you have a solid plan for investing in your modernization efforts. We have deep expertise in the content services market and welcome the opportunity to help move your business forward.
ABOUT THE AUTHOR
Matt Vanore, Enterprise Sales Director – Southeast
Matt has 10+ years of experience as a consultative sales professional primarily in the IT services industry. In past roles, Matt has led both Sales and Delivery teams to service fortune 500 clients in various industries such as Consumer Packaged Goods, Manufacturing, Hospitality, Manufacturing, Information Technology, Entertainment and Financial Services. Matt has a Finance degree and began his career as a group sales representative in the Insurance industry. Outside of work, Matt enjoys spending time with his family, playing poker, reading, and coaching youth sports.