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How can car rental and pco hire operators reduce costs effectively post pandemic

A cost-effective future | Part 1

This is the first part of a two part series discussing the need for a new system of cost saving measures in the vehicle rental industry and how digitisation can help rental providers save money, improve their service and meet the demands of the future.

To meet the demands of a more digital and cost-cautious world, rental companies will have to rapidly shift their business and customer priorities. Thankfully, many operators in the market are making wholesale changes to their fleet management, gig economy ethics, sustainability quotas and more, to remain cost effective in the new normal.


Every industry has undergone a reckoning in the last year, and the vehicle rental industry is no different. Our collective future is one where efficiency, safety, sustainability, personalisation and digitisation are paramount business considerations.


Vehicle rental companies need to balance their own business considerations and savings while engaging and inspiring the most important figure in their business matrix - their customer. Savings need to be strategised, and must not negatively impact your customer experience.

Your efforts to retain your existing customers and draw future customers must hinge around where cost savings meet, and improve on, changing customer expectations such as digitisation and sustainability.

Understanding what changes you’re making and how questions around efficiency, sustainability and usability are positively affecting your end user and their choices to do business with you, should be the main factor in building cost savings into your business practice. Efficiency of cost does not directly correlate to effective service, so try and make changes where you know your customer most benefits.

Typical cost inefficiencies

The following list is where we see the most inefficiencies. This list covers the whole ecosystem of management, customer engagement and business preparation.

  • Manual operations - legacy software, slow systems requiring manual booking and scheduling of vehicles and documentation,

  • Post-Pandemic safety - critical in our new normal,

  • Real time fleet tracking - both for protection from theft and immobilisation,

  • Insurance costs - for customers and operators to better understand changing rates using data,

  • Revenue leakage - from competitive purchasing to fleet planning,

  • Understanding local market share - reach and meet real-time demand, match customer needs, set expectations and open into new markets.

Inefficiencies across the above account for a lot of what could be considered wasteful spending. Again it’s worthwhile reiterating changing every part of the above for the sake of it does not guarantee a better customer experience: it’s how you factor in suitable changes to make sure you’re meeting your business and customer needs.

What does cost saving mean to you and your customers?

At the operational level, the cost of car and fleet ownership is the highest it’s ever been, so cost-efficiencies start first and foremost with you, the vendor, and where you need to make operational change.

How you then reflect cost saving efficiencies to your customers while maintaining excellent service is the great balancing act of savvy vehicle rental business management. For your customer, your cost savings have to be meaningful and communicable. They also need to be clearly understood - nothing alienates a customer base more than opaque cost commitments.

Your end user wants to be able to rent a vehicle efficiently, quickly, safely and as cheaply as possible, and that’s about providing effective rental cost savings, not just efficient cost savings.

The changing face of your customers

The “cost” of meeting your end-users' (changing) expectations of what a vehicle hire company can do and will be doing in the future is imperative in guaranteeing return custom and positive advocacy.

Also it’s worth noting customers are doing everything they can to save money on their rentals, such as avoiding airports or renting exclusively via credit cards to take advantage of inbuilt insurance offers. Rental companies have to have one finger on the pulse for what customers will compromise on to save pennies.

Cost efficiency is the matter of beating a competitor's price for your service. Cost effectiveness is in the eye of your customer, and continuing to deliver meaningful, effective service in the post-pandemic world, while making cost savings in some aspects of your business.

Do this and you’ll be running a sustainable, future-proof firm.

Want support in making your business operations more robust and cost effective?

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