Starting a Car Rental Business: Challenges to solutionsby Bruce Oxenford Digital Marketer and Tech Blogger
Like many other industries, the car rental industry is also one of the most lucrative and competitive marketplace. Gone are the days, when the customer used to stand in the queue or call the car rental company to rent a car.
Today everything’s gone digital, people are getting quick bites on news updates on mobile phones rather than spending time on reading the newspaper.
People love getting personalized solutions to their problems using technologies and are not ready to waste their time.
So read on to learn more about the future of the car rental industry and what they can do to adapt this change.
Business & Revenue Model of car rental business
The business model of a car rental company is that they purchase or lease cars and rent them to customers. Also, they manage to sell the car after some point of time and get some good resale amount.
Actually the car rental has quite a few revenue options like,
They rent out the cars on an hourly, daily, or weekly basis as per the customer’s preference.
Charging service fee for additional products like GPS, child care facilities, etc.
Another is that the car owner can list their cars on a car rental platform. The car owner and the platform owner share the profits. The platform owner earns by the service charge they get from the car owners and the customers.
What customers expect from car rental businesses?
The best option to stay in this competitive market is by getting into the shoes of the customer and knowing the expectations of them.
Do some research, talk with your customers and listen to their needs.
Here are some of the needs that customers expect to be solved,
1. Better customer service
The customers expect personalized service from the car rental business. Also, they want their problems to be resolved as soon as possible.
"Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves." - Steve Jobs
User experience plays a major role in the growth of any business. It helps in building trust between the customer and the business owners.
2. Prolonged Waiting Time
The majority of customers say that they hate waiting in a long line at the counter.
Most of the customers for a car rental business are either family came for a vacation or businessmen.
Do you know how frustrating it is to wait in a line for a long time when you are there for a vacation or for a business meeting? I hope you know.
3. Car choices
Everyone’s different like how our all five fingers are. Everyone has their own needs and wishes.
Offering the same kind of vehicle for every customer is not a safe option to go with, considering affordability, comfort, etc. Some may need compact SUVs but the other may not necessarily rent that same car.
Everyone loves options, isn’t it? Allow your customers to choose the preferred car from the wide range of options available.
4. Payment options
As everything’s gone digital now, cashless transactions became one of the most preferred modes of payment.
Customers love paperless transactions as it is safer and secure. If you are not offering what they need then you may lose them.
Challenges faced by the car rental industry
Like many businesses out there, car rental companies also face some really tough challenges.
Biggest challenges faced by the car rental industry are,
1. Managing bookings and customer data
Managing bookings is the tedious process and doing it manually requires a lot of human skills. But humans are human, they tend to get frustrated in managing all the records. And the chances of errors are also high.
2. Brand awareness
The car rental market is lucrative but also a competitive niche. Creating awareness and attracting potential customers in this competitive market is really hard.
Leverage social media and post regularly to reach your target audience. Make a strong online presence and interact with your customers.
Customer satisfaction plays an important role in creating brand awareness.
3. Technological advancements
The next challenge for the car rental business is adapting the change. Most of the small car rental businesses out there are afraid of taking this big step.
Most businesses out there are moving online as they know the trends that the smartphones and internet are the biggest market.
Companies that are not available online will not last long in the competition. As customers love to get their work done in a single click on their smartphone.
How car rental software helps in solving the challenges?
The car rental software is the online car rental marketplace platform that helps the business owners to manage the car listings, reservations, payment details and also keep track of the customer records.
By using the online car rental script the business owner can effectively manage their business, this solves the first big problem of the industry.
Having their own web and mobile applications creates brand awareness. Also, booking through the company’s website creates a sense of trust among the customers.
Talking of booking, the car rental app built with a safe and secure payment gateway helps the users to pay for their rental hassle-free.
The car rental software lets the customer scroll through the listing of cars, select the preferred car of their choice, enter pick-up and drop off locations and pay online once the ride is completed.
This increases the user experience which in turn increases the customer retention rate.
Future of car rental industries
The future of the car rental industry depends on how they manage to overcome the above-said problems and how effectively they satisfy the customer needs.
Digitalizing the car rental marketplace is one of the best solutions for the industry to stay strong in this competitive market.
Artificial intelligence and IT plays a major role in the development of the car rental industry.
According to statista.com, the number of smartphone users in 2021 will be around 3.8 billion. This number clearly indicates that building a mobile application can be of greater help.
Due to this fact, almost every industry is moving towards developing mobile apps to stay connected with the customers.
The next big step in the car rental industry will be the on-demand rentals.
The on-demand business like Uber is growing at an enormous rate. It replaced the regular modes of transportation which has become a greater threat to the car rental industries.
Most of the big car rental companies are looking forward to launching their own on-demand rentals.
This will allow the users to book the car in a few clicks and the car will be there at the user’s location in a quick time.
So, if you are about to start a car rental then try to incorporate the above-said solutions into your business.
Still the car rental industry is one of the best startup ideas for an entrepreneur to kick start their journey if they learn to adapt to the change.
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Created on May 8th 2020 01:32. Viewed 282 times.