How to improve your car rental business? Start with these 5 steps
Updated: Aug 6, 2021
Connected vehicle technologies will shape the future of car rentals!
It is always hard to make a dramatic statement in public without worrying about consequences. In this case, however, we are quite confident to be challenged.
As a Technology Strategist, I increasingly see businesses not only relying on data to operate but invariably find new revenue opportunities that are enabled by it. ‘Data science’ or ‘Machine Learning’ skills have become the hottest selling jobs on LinkedIn and job sites as every organisation continues to invest heavily in building the capability in-house. Despite government scrutiny and heavy-handed regulations such as GDPR, organisations have not lost momentum on their investments in Artificial Intelligence (AI) and data science to stretch the boundaries of what can be achieved through AI.
We see similar innovation being pursued by automobile manufacturers who have understood the potential value of enabling connected technologies within their cars. As a simple example, I own a Jaguar XF which I can remotely lock, unlock and control the ignition of the vehicle using the manufacturer’s app. It’s great for me during winters when my car is parked in an open parking lot and covered with frost or snow. I can simply switch on the ignition 15 mins before I am due to arrive and the car is defrosted and ready for me to drive away. It’s a luxury alright! But think about more important benefits such as vehicle security. I can easily monitor my car through the app to see if it is secure or track it if my car gets stolen.
Hopefully, we have successfully established my point about the value of data and connected vehicle technologies, which is going to drive the future of the automobile industry. But what about its adoption across the car rental industry?
While the automobile industry may have taken off on using Internet of Things (IoT) technology to improve the performance of cars, the car rental industry is yet to catch up. We spoke to a fairly large number of large rental companies recently to understand how they are using telematics, only to find out that 100% of them use it merely track their vehicles. That is equivalent to human beings using only 10% of our brains. What a waste of good intelligence (literally!).
Today, we will cover a few snippets of how Coastr’s ‘Connected Vehicle’ technology can unlock opportunities for your car rental business.
1. Fleet tracking and live updates – This is the baseline of telematics capabilities and while most devices will give you this feature, the trick is to use the data more effectively for fleet management and increased utilisation. Coastr’s car rental management platform is an example of how we will be enabling booking management and automated scheduling of vehicles by leveraging the tracking data from cars and using it to create alerts that customers and staff members value the most. We anticipate that through the automated scheduling capability, car rental companies will be able to increase their fleet utilisation by at least 10-15%.
2. Fuel management – This is a major issue for many fleet managers and car rental companies as loss of fuel equates to higher operational cost. Telematics can unlock the data that can help to better manage fuel and fleet mix. As an example, one of the telematics companies Masternaut, has published an interesting article on how the telematics data can be used to track fuel efficiency in cars and determine the type of vehicles to buy in order to reduce fuel costs. A car rental company can pass these benefits to their customers who will incur less fuel costs in renting, while keeping the environment cleaner. A win win for everyone!
3. Predictive maintenance and vehicle health monitoring – The airlines sector is one of the best in using predictive maintenance as a way to identify issues in aircrafts that requires frequent maintenance to avoid unforeseen issues. The same can be applied to cars as telematics devices have become smarter in reporting vehicle health and diagnostics data in real-time that can predict when a vehicle may need maintenance. TomTom has written a great article on this topic.
4. Driving performance monitoring – There is an ongoing debate in the car rental industry about reducing CO2 emissions from vehicles and controlling driving behaviour is a key element of this problem. Telematics can help in addressing poor and rash driving behaviour by generating real time and in-cab feedback to drivers to improve their driving behaviour, thereby reducing CO2 emissions. Coming back to my Jaguar XF example again, when I am driving in my eco-mode every time I hit the accelerator a bit harder than usual, I get an instant amber colour on my dashboard to indicate that I am making a poor choice. If you want to read more on this, you can read this article by an independent consultant.
5. Dynamic pricing – Car rental companies have to invariably spend a lot of time planning and organising their fleet to get the maximum revenue out of them. Telematics data can be hugely beneficial in dynamic pricing while creating a really unique customer experience. As an example, customers renting out a car on limited mileage often complain about extra charges. Using telematics data, car rentals can now alert the customer when they cross the mileage restriction and automatically notify them of the extra charges they would be charged, without waiting for it to appear in the final bill or invoice. This can help create a very transparent and trusted experience to increase customer retention.
So, here is the deal. If you work at a car rental company or are the owner of one, please read up on the benefits of telematics and come talk to the team @Coastr because our car rental management platform is pre-configured with telematics to enable a fully integrated one-stop shop experience for businesses like you.