COVID-19 and Car Rental: Challenges from a Platform’s View
COVID-19 is without a doubt the greatest challenge the world has faced since World War II, if we consider the number of cases in comparison to SARS, MERS, and Ebola. The world is in strict lockdown, and that means it’s not business as usual anymore; neither are relationships, life, or the world in general “as usual” anymore. While the presence of COVID-19 on our surfaces and in the air is testing our cleanliness, discipline, and certainly our physical immunity, this social distancing is also testing our social immunity — it’s testing our ability to absorb the pressure of being alone and working alone. In over 12 years of car rental experience, I never imagined a situation like this. Almost three weeks ago, I received an email that most car rental branches would partially close due to the COVID-19 lockdown. Car rentals are not considered an essential sector, so we had to follow strict lockdown measures and wait for the restrictions to be lifted before we could resume operations. As the founder and CEO of a car rental platform, when I heard the news, I felt the earth shake. The technology we had developed, the ecosystem we had created, and all the hard work that we had put in for so many years suddenly became “redundant” and “non-essential” in a matter of minutes. But soon I realized that our car rental marketplace is already online, and we don’t have physical locations, huge staff, high overhead costs, etc. Then I started wondering what kind of trauma and difficulty traditional car rental companies will go through in this situation. Following are the lessons I believe the car rental industry needs to learn from the COVID-19 pandemic. Locations are Becoming Irrelevant Opening and maintaining a rental location is a decision to make very carefully, as it can incur a lot of overhead costs. If the location doesn’t perform as expected, it can have a negative impact on the bottom line. Having an airport location and one or two downtown locations should be enough. I believe what we can learn from the pandemic is that having too many locations can pose a serious threat in this lockdown situation. I believe car rental companies will be looking to optimize their locations during, and possibly even after, this situation. Demand for Deliveries Will Increase Today’s consumer is ordering everything online. E-Groceries and food delivery apps are flooded with orders. Considering this behavior, I believe car rental customers are also going to be delivery-savvy and will be looking for car rental delivery options as opposed to pick-up. I believe we need to rethink our delivery strategy and create an ecosystem where “delivery-first” can be promoted more rather than “walk-in first.” Our digital interface should adapt the same way, making ordering a car as easy as ordering food online. Digital Strategy: Mobile Self-Collection, Unlocking The biggest roadblock to “business as usual” in this COVID-19 period is social distancing, as many of the businesses around the world are still based on face-to-face interactions across the counter or outlet based transactions, which is why digital transformation for car rentals is required. I am talking about the concept of “self-unlocking,” which will play a huge role in our industry going forward. We need critical digital systems where a customer can book a car and sign a rental agreement on an app. They then need the ability to locate their assigned car, unlock it, and drive away. I believe every car rental company in the world should now create a digital strategy prioritizing “mobile as first point of sale” and display it with due prominence on the website as well as in the marketing campaigns. Raising the Sanitation, Cleaning Process This pandemic has made us cleanliness conscious. Consumers are concerned about the sanitation of the things they buy, and they have always been concerned about the cleanliness of the cars they drive. Therefore, when they make a booking, customers are going to want assurance that the car is clean and sanitized. Car rental agencies will need to find a way to give them that assurance, and they might also want to throw in a small hand sanitizer to reassure the consumer and show that they care. Also, they’ll need to make sure they update their terms and conditions regarding their cleanliness and sanitization policies and standards. Allow a Lockdown-Proof Return Policy Consider the following real-life scenario: A customer booked a car for 13 days, and on the 12th day of the rental the lockdown was announced. The customer panicked and insisted he didn’t want to pay for extra days in the lockdown, as he was not able to return the car on time. We understand that, and of course we didn’t charge the customer for the extra lockdown days. But I think it is now time to make allowances for these kinds of extenuating situations in your policy, as I am sure consumers will want to make sure they don’t end up paying extra due to unforeseen circumstances. Evolving Situations Demand Agility The points mentioned above are by no means comprehensive, as the COVID-19 pandemic is an evolving situation. I think we need to make sure that our business models are agile enough to make necessary advancements and changes to keep the customer at the center of our universe. I hope this helps. Always remember that we are all in this together. About the Author Ammar Akhtar is an award-winning entrepreneur and the founder and CEO of Finalrentals, which is UAE’s largest car rental marketplace. He has over 12 years of industry experience in digital transformation of car rental booking engines and apps around the world.