How Will Self-Driving Vehicles Impact the Car Rental Industry?
As it stands, automatic vehicles are still the most popular type of car among consumers. These feature an automatic transmission that makes shifting easier for drivers. Now, imagine a world where your car truly does everything for you. Technology for self-driving vehicles is no longer a future consideration. Vehicles with ever developing means of self-navigation are already on the road and in use by private drivers. Given their current availability, with ongoing improvements and their possible application to car-sharing and other transportation services, how will these conditions affect the current state of car rental agencies?
Rental contracts need to account for accident damage, vandalism, and theft, so safety is a top concern when considering autonomous vehicles. While autonomous cars are a recent technology, data does support the suggestion that computer-driven cars are less prone to accidents than people. Where human attention can be swayed and tiredness can set in, computers are designed to be consistently aware. This can either help or hinder, as humans can make judgement calls computers cannot. As it is, human error is still a concern, as 90 percent of accidents are attributed to it. Given autonomous cars could eliminate human error, they may be a legitimate consideration for rental centers in the future.
Autonomous Cars and the Sharing Economy
In cities and towns, new, app-based ride-hailing services are taking a large share of transportation services from both taxis and rental agencies. Between 2014 and 2018, ride-hailing service shares went up seven-fold, while rental agencies lost more than 50 percent. Included in this is the likelihood of autonomous vehicles playing a part in new transportation services in the future, consequently lowering their cost of business, while rental services still contend with the same overhead costs, such as accidents or theft. Custodio & Dubey, LLP explains that rideshare companies may be held liable for an accident in the event they did not adequately vet the driver. Insurance costs and driver liability could be reduced as autonomous vehicles take over. With reduced overhead, local travelers, rather than own or rent a car, could end up calling on autonomous vehicles several times a day.
Adoption of New Technologies by Rental Agencies
Car rental will likely be driven more by technological processes. Customers are less interested in dealing with people when renting a car. As car sharing methods and ride-hailing services are app-based, expectations will be the availability of a car simply by locating it in a fleet of maintained vehicles at various parking locations and ordering it or even calling it by means of an app. What keeps a fleet in business is its customer rating and immediacy and ease in the ordering process.
Autonomous vehicles are already on the road, and the app technology is already here. While testing is still being carried out in a broader range of environmental conditions, such as weather and cities, other concerns also remain to be decided. Ride-hailing services are still getting established and are not yet confirmed as a viable business model. Legal concerns remain, such as cities’ willingness to adapt, and security is still an issue, where hackers could find ways of gaining access. As well, vehicles will still need to be maintained. A primary concern for rental companies is to adopt new technology and morph according to new developments.
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