How Ridesharing Is Driving Rental Car Industry Innovation

Car Rental

In the 1960s, Avis turned to its marketing agency in hopes of tackling a challenge: the car rental company wanted to keep pace with Hertz, which was the top brand for car rentals. The agency, Doyle Dane Bernbach, came up with the tagline “We Try Harder” — to highlight the brand’s position as a challenger. Now, Avis, along with its rivals, is facing a crowded transportation field that offers travelers many alternatives to rental cars such as rideshares.

Attempting to compete in this market, Avis recently rolled out an offering to tackle one of the key pain points in the car rental process: that is, the company is seeking to make returns easier for its customers. As an alternative to the shuttle bus to the airport terminal, in September launched an offering called Curbside Delivery in 35 major cities.

With the offering, an Avis employee will drive a customer to the terminal in the same car that she rented. In order to tell customers about the offering, Avis said in a press release that customers can receive a notification offering them the Curbside Delivery feature mid-rental if they have enabled notifications. They can also buy the feature through the “Purchase Add Ons” screen through the Avis app.

The idea is to make the trip to the airport, well, more convenient. Avis Budget Group President of the Americas Joe Ferraro said in the press release, “We’ve all been in that situation where we’re running late for a flight or have a juggling act when returning a rental car with luggage, golf clubs, kids, and little time to spare. The new Avis Curbside Delivery shaves time off your trip and extends you the convenience of being dropped off right at the airport terminal by one of our staff members in the same car you rented.”

That said, Avis is not the only rental car company that will give customers a ride to the airport in their own rental cars. A spokesperson Hertz, for instance, told the New York Times that the company drops off members of its Gold Plus Rewards Platinum program and does the same for customers who are not part of that offering when it is possible. But the spokesperson noted that initiatives around drop-off and pickup at some airports are in the works.

But, while ridesharing platforms do offer the promise of convenience, the car rental companies might have a potential solve with their drop-off offerings: “Some business travelers may be willing to pay a premium to use a ride-sharing service because it’s a significant timesaver. But curbside drop-off evens the playing field because of the convenience it offers,” Abrams Consulting Group Founder Neil Abrams told the New York Times.

Beyond Avis, Silvercar has worked to offer a mobile platform along with alternative pricing methods to keep travel and rental customers from converting to the side of ridesharing. Through its free mobile app, customers can book their rentals on their phones — a step up from waiting in line — and receive receipts via e-mail. The mobile app also unlocks a customer’s Silvercar rental. Incidentally, Silvercar also offers a drop off service and, at select airports, its renters can leave the car in a short-term parking lot for pickup by a Silvercar staffer. (Free rental days are also a benefit for members of Audi’s car subscription service.)

Car Rental Innovation

Curbside drop-off isn’t the only play in the rental car innovation playbook. Amid a crowded field of transportation services, Avis has been rolling out other innovations such as those in the area of carsharing. In its third-quarter earnings conference call this November, Avis Budget Group CEO Larry D. De Shon pointed to the company’s Zipcar unit as an example of innovation.

To that point, Zipcar’s Flex services enables drivers to pick up a vehicle in one place and return it in a different point. De Shon said in the call, “At a price point substantially lower than ride-hailing, Flex continues to grow nicely each month, and has contributed to our international membership growth.” The executive also said that it amped up tis supply of Volkswagen e-Golfs in London. (He noted that more than 6,000 “Zipsters” used the electric vehicles.) Beyond those efforts, Avis has joined forces with ridesharing company Lyft.

On the call, De Shon noted that the company announced a partnership in August with the ridesharing firm to bring “thousands of vehicles” to multiple North American cities through the Lyft Express Driver program. (The offering helps people who want to drive for Lyft access a car.) He said, “our teams have been working very closely since the announcement, and we are looking forward to launching our first market with Lyft later this year.”

One approach for rental car companies are taking to age of rideshares is to, then, is to simply join forces.