Convergence between traditional car companies and transportation network companies (TNCs) continues as the leading brands in each category “reach in to each other’s bread-and-butter businesses”, according to recent research from Phoscuwright.
The company highlights that Avis Budget Group and Hertz continue to invest in fleets provided to TNC companies and last minute delivery services, and the technology that enables them. For example Avis Budget has partnerships with Uber, Lyft and Via and in 3Q 2019 increased its ride haling fleet by 60% over the previous quarter.
Avid Budget has also signed an agreement with rail operator Brlghtline, said Phocuswright, to make Avis and Zipcar vehicles available at select Miami, Fort Lauderdale and West Palm Beach stations.
Hertz, meanwhile, dubs its TNC business a growth driver, Phocuswright stated. Its revenue from that segment in 2018 was nearly USD300 million, which was more than double the previous years.
The company’s research also stated that Hertz’s Express Drive programme allows Lyft drivers that lack suitable vehicles or who prefer not to put wear and tear on their personal cars to use discounted rental cars to transport passengers.
“Conversely, Lyft and other TNCs are launching services that make them look more like traditional car rental companies,” Phocuswright concluded, highlighting a pilot by Lyft launched in Jul-2019 of daily rental service in two California locations, West Oakland and San Francisco. The rentals are available thought the Lyft app and include pickup an drop off at the rental lot.
“As publicly traded companies, both Lyft and Uber may feel shareholder pressure to continue to add these types of higher-priced services,” Phocuswright concluded.
The company remarked that it remains to be seen if the “cross-pollination of car rental products and mobility services creates clear winners and losers, or if more consumer choices create a larger car rental marketplace”.
The US Car Rental 2019 report provides an overview of the U.S. car rental segment, including online and mobile bookings, distribution trends, OTA versus supplier dynamics, and projections through 2023.
It acknowledges that riding on the strength of the US economy and the resulting increase in consumer travel demand, car rental gross bookings were projected to climb +3% in 2019. Online bookings account for more than half of all car rental revenue, and in 2019 the supplier-direct channel captured approximately two thirds of the online market, it says.