Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

http://techcrunch.com/2012/11/24/airport-car-rentals-please-god-someone-make-them-not-suck/

by OJKoukaz • 14 years ago

29 45 14 years ago

Anechoic• 14 years ago

Frequent travelers and members of rewards programs aren’t treated that differently

Um, actually we are. With Avis First (free to join) or Hertz Gold (last I knew there was a fee, but that may have changed), I take a shuttlebus to the rental car lot (or at the smaller airports, walk from the gate to the rental lot), look for my name on the message board, walk over to my car, get in, drive to the gate, show the attendant my license and I'm gone. In the really small airports (FSD or FWA for instance) it's literally 5 minutes from gate to road.

WRT Flightcar, that has absolultely no appeal to me as a car owner parking at an airport, or as a car renter. As a car owner, when I get back from a trip, I really want my car to be there so I can get home, I don't want to have to deal with my car not being there because the renter got stuck in traffic or had a change in plans.

As a renter (for both business and pleasure) I want to be able to have some flexibility in my rentals - if I want to extend my rental, I just visit the website and extend the rental. Would I be able to do that if the guy who's car I'm renting needs it back at a certain time? Also, how do I know that the car I'd be renting would be in decent running order?

I think that airport car rentals could use some disruption (for example more flexibility in refueling is nice, but I don't see that Silvercar really solves that problem), but I don't see these businesses doing it. Of course YMMV.

whatusername• 14 years ago

The petrol (gas) refuel thing is the only thing that feels all that different from Hertz Gold (I think it's sometimes a 1-time fee -- I got mine free a few years ago).

My experience at CBR last week. Walk off the plane. Walk up to the Hertz counter. Wait 20 seconds for the 1 other person in the Gold line. Flash my license. Given my keys and the direction to the lot. Walk to the lot. Drive off. Would have been under 5 minutes from when I walked off the plane.

rsheridan63• 14 years ago

As a renter, I've usually already bought my return tickets and have to be at work the next day, so there's no chance that I'm going to extend my trip, unless I get stuck somewhere. The company should have provisions for giving a loaner to a car owner whose car isn't returned on time, but I doubt that would be a problem very often.

itry• 14 years ago

Both of your arguments against Flightcar (trust as owner, flexibility as renter) are as valid for Flightcar as for AirBnB. Still AirBnB rents out rooms for some hundred million dollars per year.

czr80• 14 years ago

Well, the question is not whether their business model is uniformly better than the current model, nor whether it makes sense for everyone. The question is whether there is a sufficiently large group of people for whom the cost savings outweigh the potential hassle/risks. I'm not sure it will, either, but let's see.

pbreit2• 14 years ago

Flightcar sounds like a tough call...a lot of moving parts to save a few bucks on parking and/or car rental and with added anxiety for both parties.

Silvercar sounds more like how renting a car should be (except for the limited car options)(I'd go with a Toyota/VW lineup).

The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-customer gas policies.

rprasad3• 14 years ago

*The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-customer gas policies.

I suggest you patronize different car rental companies. Discount car rental companies skimp on the service and choices. Better ones (Enterprise, Hertz) focus on the service and only cost a dollar or two more a day than the discounters.

pbreit2• 14 years ago

The more expensive agencies are routinely double the price. And I'm not sure they fare much better on the points I mentioned.

jacquesm4• 14 years ago

Why would I risk my 2 decades+ no claim discount on someone else renting my car?

Why would I let someone who I don't know drive the car I take good care of, possibly use it for illegal purposes or deal with the aftermath of fines and so on?

Really, that's a pretty bad idea.

mandeepj• 14 years ago

Your "no claim discount" will still remain valid incase the renter hits your car because you will using renting company's (flightcar\silvercar) insurance for filing claims. You are right with your other points.

The OP made up this stuff pretty badly - "There are the lines, the hassles, the constant upsells, confusion around cost of gas and insurance, and about 15 pages of paper that you have to sign before being able to pick out your car and leave the lot. " I have never experienced any of this.

Most of times I have used enterprise and few times hertz. Car choice is an issue when it is a long weekend otherwise not a problem at all. I use my own insurance because I know there is no point in using their's. If I can use an insurance for my own car then why should I get some other insurance for renting a car. I get cheap gas, free upgrades from enterprise.

jacquesm4• 14 years ago

You can't just be 'double insured', insurance is usually on the license, not on the driver. So if I put another driver in my car he/she can claim whatever they want, the law here is that the license owner is the one taking out insurance. By law, as soon as a vehicle is on public roads the owner of the car has to have mandatory insurance.

I'm not quite 100% clear on what the situation would be if someone else would be driving the car and they took out insurance to absolve me (and by extension my insurance) for liability, but I'm fairly sure that just driving around with my license plate will cause me to be the party addressed for any injuries/damage caused using that vehicle.

That's why license plate duplication is such a nasty thing, you end up having to prove that it wasn't you that caused the damage/fines/whatever.

And of course, if they do get into an accident and supposedly their insurance pays for the damage I will still find no car on my return from a trip as well as having to deal with the aftermath of the damage and having a car that was repaired after an accident, which may render it drivable but will significantly impact the book value.

Bad plan.

rsheridan63• 14 years ago

I agree on the second point, but then again, I'd never rent my house out with Airbnb either, and apparently they've done well. Different people have different tolerances for risk.

antiterra• 14 years ago

I think a key difference with Airbnb is that you have to be pretty clever to run a red light or over a pedestrian with someone's condo.

atirip• 14 years ago

It's hard to impossible to damage your house by the renter so that the damage stays hidden. With car, it is pretty easy and the costs of such damages when you discover them afterwards would be realatively high.

npguy• 14 years ago

Some people might be okay with the risk of someone else driving their car, for the money, especially in these tough times.

kosei• 14 years ago

Perhaps I'm the wrong subject as I don't use AirBnB, but the idea of FlightCar frightens me. Far too much risk to take on for either side with little reward in terms of cost savings. And frankly, I imagine that the paperwork and coordination would create even more hassle than that of a typical rental car company.

allerratio• 14 years ago

What comes after that? An sort of Airbnb for self storage?

aneth42• 14 years ago

Airport car rentals tend to be pretty cheap (<$200/wk), available, and high quality. This poses a problem for any company attempting to "disrupt" the industry.

AirBNB is competing with high priced hotels that often are booked and an existing inefficient P2P subleasing business.

Uber is competing with taxi services notorious for poor responsiveness and frequent gaps in availability.

I don't see the same room for disruption in the airport car rental market, but there is likely some room for innovation. Don't count on Hertz and Payless quaking in their boots any time son.

mseebach2• 14 years ago

The biggest problem with car rental is the paper work - for some reason it can take five-ten minutes per customer to deal with, if nothing goes wrong. I've waited 20+ minutes on multiple occasions. There is literally no reason it can't be handled online well in advance (and it typically is, but for some reason it's repeated in person). Car rental needs something like airline self-service check-in kiosks more than FlightCar, IMO.

smackfu• 14 years ago

Join Hertz Gold and there is no paperwork. Totally worth it to me.

rprasad3• 14 years ago

Join any "Gold" or "Executive" level offering from any car rental company. They've offered these plans for years--paperwork is handled when you join, and thereafter your wait time for a car is usually the amount of time it takes you to pull your member card out of your wallet.

aneth42• 14 years ago

This can be a problem, though I doubt an alternative airport parking based service would be much quicker.

As mentioned by others, Hertz Gold etc really ups the service, but it's usually not worth the 2-4x you pay on the rental.

I've found Payless and Fox both to be the cheapest and provide adequate service. I've had run-ins about fees and such, but generally I fell I get excellent value.

joeguilmette• 14 years ago

My only interest in renting cars is long term, greater than one week rentals.

I move often, and when I'm going to be in one place for more than a month I buy a cheap $1000 car. Then I sell it, usually for around $1000. Sometimes I take a loss, sometimes I make some money, it's a wash.

But when in I am in town for less than a few weeks, I rent. Always with Enterprise. Never on airport. In fact, I've taken hours of busses from the airport to save $100 on a rental.

I think it's easy. I go in, I sign a few times, we walk around the car and I leave. Done.

Getaround is cute but its too expensive, Flightcar sounds nice, but it amplifies all the problems that Getaround has.

Meh.

ezl• 14 years ago

are you US based? I was trying to do the same a few years ago and found it was harder than expected to justify for short time periods with:

    - new license plates
    - state registration
    - sales tax
    - insurance
    - city stickers
    - title application and fees

I remember thinking it wasn't even worth it for me to do buy it and sell it on the 6 month time horizon (and I also couldn't find sub $1000 cars).

I'm asking from a place of envy, not challenge. Please teach me your ways. I must be doing this wrong. Would you mind shooting me an email: ezl@rocketlease.com

bradleyjg• 14 years ago

Indeed. People look at a car rental business and think 'I can offer better customer service'. Maybe, maybe not but that's only one of the necessary business lines.

Rental car companies are the largest buyers of new vehicles in the world, and more importantly the largest sellers of used cars. What's your strategy in those areas? What's your cost of working capital going to be? Ditto with insurance, these companies generally self insure the collision, can your startup afford to do that?

Then there's counter space at the airport. These generally come on the market rarely and at a different time and process for each airport. How are you going to compete when your lot is a twenty minute shuttle ride, and your competition has a lot in walking distance from the terminal?

I'm not saying it's impossible but the barriers to entry are high.

gfodor• 14 years ago

I dunno this seems like a solution in search of a problem. The rental car industry is highly competitive which results in high quality service at low prices. I don't remember the last time someone I know complained about a rental car company.

tomjen3• 14 years ago

The brilliant part is that flight car doesn't need an inventory but all their competitiors do. And inventory is a sunk cost that will force the prices higher, but will have no benefit to their customers.

dutchbrit• 14 years ago

I wouldn't feel comfortable renting my car out. I have visions of people doing burnouts, handbrake turns, trying to dump the clutch etc... You might not notice it at first...

Also, lets say I know something is about to go on my car. Something expensive. Why not bring it there and let someone drive it 10 miles until it breaks and blame them for it?! Free repairs? Or how would they handle that?

dsr_• 14 years ago

This will be much more feasible when you drive a robocar. Put it in automatic-only mode, take photos before you leave it, and the insurance will cover all your potential problems (except the inconvenience of coming back home when the car isn't there.)

tokenadult• 14 years ago

When driverless car services are a routine way for people to obtain a car on demand, renting a car at an airport is just one subset of obtaining a car for a one-trip use. It will be interesting to see whether the existing car rental companies have the management strategies and algorithmic understanding of maximizing car return on investment needed to make an on-demand driverless car service a part (and eventually the whole) of their business model. Whoever wants to be in Flightcar's or Silvercar's (or Uber's) business has to think ahead to what the wide availability of driverless cars will do to their whole industry. Those who disrupt can be disrupted in turn, if they are not ready for the future.

vladoh• 14 years ago

I think car sharing solutions like DriveNow (https://us.drive-now.com/how-it-works/) are much better for this case. Instead of giving your own car to somebody else, it is much easier to drive to the airport in one of the car sharing cars and drop it at the airport, where somebody else can use it to drive back to the city. DriveNow already allow free parking at the San Francisco airport and they are expanding very fast so I think it will be a really valuable service soon.

aes2562• 14 years ago

I don't see much potential here.

Airport car rental is mostly grunt work. Moving cars, storing them, valeting them, maintaining them, filling them with gas, sorting out insurance, customer service, screening customers, chasing late returns, pursuing people for damages, so on and so forth. 5% booking interface, 95% on the ground work.

There is already healthy competition in the market, and the incumbents do a pretty good job. There are lots of moving parts, so things often go wrong, but it's hard to do better.

Who cares about a shiny iPhone app? The existing companies already have passable online interfaces, and if they don't already have iPhone apps they have the capital to roll one out in a matter of weeks and crush any looming competition.

I give both of these startups 12-24 months, and the end won't be pretty.

ricardobeat2• 14 years ago

"A pretty good job" (not so pretty when you are waiting in-line for an hour) is not enough. If they can do the grunt work just as well, or better wrt refuelling/cleaning, and a better booking system, they will win.

You also missed the picture of car sharing.

aes2562• 14 years ago

> "A pretty good job" (not so pretty when you are waiting in-line for an hour) is not enough.

You can bet the leading companies have already invested huge amounts seeking out efficiency savings and ways to improve customer satisfaction.

Slow moving and bogged down in bureaucracy they may be, but if there were a simple way to avoid common customer complaints (e.g. long queues) without hurting the bottom line, they would already be doing it.

> You also missed the picture of car sharing.

I can't think of anyone I know who would even consider sharing their car. It's just an absolute minefield. It might just about work on a small scale, where you know and trust the people you are sharing with, but that kind of thing doesn't scale.

TommyDANGerous• 14 years ago

Pretty cool ideas, not sure if I'd rent someone my car but I'd definitely rent someone else's.

PaulHoule• 14 years ago

People around SV might get the wrong idea of how bad airport car rentals are because the car rental center at SFO is probably the worst in the world.

I remember coming in on a delayed flight and riding the train out to the rental center, waiting in line half an hour, then finding the car parked in the space I was sent to was entirely different from what it was supposed to be (and the keys didn't work), going back and waiting in line again, getting a call from the satellite police station on my cell because my wife was wondering what happened to me, finally getting a car and remembering I never got a child seat but driving right out because I didn't want to wait in line again.

Sensible (unamerican) people just take the BART if they are going to SF. I didn't have that choice because we were going to San Luis Obispo.

I'll admit fueling can be a pain, but car rentals at other airports, even big ones, are nowhere near as bad.

At LAX, for instance, I reserved a Hertz car on Priceline, caught a shuttle bus to the car rental center, got the paperwork filled out quickly and drove off. On the way back they were handling a huge volume of returning automobiles but it was efficient, really a pleasure.

(I did make the mistake of thinking I could go north on the 405 at 5pm on a Friday... Had I known LA a little better, I'd have gone north on the surface streets which are easily accessible from the rental center.)

ablefire• 14 years ago

I don't rent cars all that of then so there may be all kinds of Pro Tips that I don't know.

My biggest gripe with car rentals is not the experience at the counter but the schlep from the terminal to the rental car district. First there is the wait for the shuttle bus, then the tour of the other terminals, then the drive to the rental lost. By the time you get to the counter you've lost 30 minutes of your life to waiting and ferrying.

So for me the core problem is that the car is not somewhere extremely convenient at the terminal when I need it. I do recall some uber-statused folks at my work having the rental car company meet them at the curb with the car but this seemed to be an arcane and rarified perk.

It's kinda like the last mile problem. Once you actually get to the rental hub then it's pretty painless and quick but getting from the plane to the rental lot is a slow mess.

genwin• 14 years ago

You shouldn't let strangers use your car. You are liable for the vehicle regardless who's driving it. Photo traffic tickets and tolls are just the start of the liability issues. When the stranger driving it gets into an accident, you'll be sued too.

Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

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