Smartphones Bring More Mobility to the Rental Car Business

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【Summary】OWNING a car in a congested city like New York or San Francisco can mean more hassle than happiness, what with traffic snarls, limited street parking and expensive garages. But Curtis Rogers has figured out a way to turn those psychic costs into a source of profit. The less he drives, the more he potentially makes.

Mia    Sep 13, 2016 9:13 PM PT
Smartphones Bring More Mobility to the Rental Car Business
Eric Taub

OWNING a car in a congested city like New York or San Francisco can mean more hassle than happiness, what with traffic snarls, limited street parking and expensive garages.

But Curtis Rogers has figured out a way to turn those psychic costs into a source of profit. The less he drives, the more he potentially makes.

Registering his vehicle on the peer-to-peer car rental company Getaround, Mr. Rogers, who lives in San Francisco, rents out his Toyota Prius by the hour or the day, whenever he does not need it. In the last six months, he has earned an average of $750 a month for essentially doing nothing but acting as his own rent-a-car company.

"My friends and family back in Texas think I'm crazy," he said. "But I've been really surprised by how much money I've made.''

Mr. Rogers, whose day job also involves disruptive transportation technology, is an account operations manager for Lyft, the ride-hailing competitor to Uber.

Getaround joins companies like Lyft and Uber — and for that matter, Airbnb — that enable owners and customers to make use of valuable assets that might otherwise sit idle much of the time.

And it is but one example of how smartphone-based technology continues to upend the traditional car rental business, which was long dominated by Avis, Enterprise, Hertz and their various subsidiaries.

Continue reading the main storThe conventional car rental companies, which a decade ago had to respond to the rise of digital fleet-rental alternatives like Zipcar — which Avis ended up buying — have had little choice but to continue evolving to adapt to smartphone upstarts like Getaround.

"For us, technology is key," said Sam Zaid, Getaround's chief executive. "Our technology makes car rental as easy as owning a car."

Operating in 10 cities in the United States, Getaround has signed up about 3,000 car owners. Each owner agrees to let Getaround install a small box under the car's dashboard, which tracks vehicle diagnostics, pinpoints the car's location at any moment and keeps track of how the vehicle is being driven. Getaround charges owners $20 a month, and a 40 percent commission on rental fees.

To rent a car, which costs $5 to $25 an hour depending on the model, a customer uses the Getaround app to find a nearby vehicle. A grid shows its location and whether and when the car is available. The customer can unlock the vehicle by smartphone, then find a car key that has been hidden within the vehicle.

All rental forms are filled out electronically, with no need for the owner and customer to ever meet. The rental rate includes $1 million of insurance coverage, as well as roadside assistance.

The Getaround model is meant for cities with concentrated populations, which is why its initial markets also include Portland, Ore., Chicago and Washington.

For less densely settled, sprawling metropolises like Los Angeles, there are companies like Skurt, a one-year-old start-up, which will deliver rental cars to customers. After the drop-off, Skurt drivers head back to the office by public transportation, a folding bike or even a skateboard.

Like Getaround, Skurt does not own the cars. The company contracts with the major rental companies to make use of their excess capacity. Using the Skurt app, customers choose the models they want, set the drop-off and pickup times and locations, and scan their driver's licenses. Prices start at about $40 a day.


Mr. Rogers using the Getaround app.CreditRamin Rahimian for The New York Times

Skurt is aiming at the millennial market. And so, unlike traditional car rental companies, which usually add a surcharge for renters younger than 25, Skurt will rent to drivers as young as 21 at no additional charge.

"Our customers don't consider us as an alternative to car rental companies; they use us as a replacement for car ownership," said Josh Mangel, 23, one of Skurt's founders.

Skurt's cars are available in the more heavily populated parts of Los Angeles and neighboring Orange County, with expansion planned soon to San Diego and Austin, Tex.

Besides the considerable costs involved in big fleets of vehicles and large chains of airport and storefront retail offices, the conventional rental car companies are also encumbered by longstanding business procedures, which for customers can mean standing in a slow-moving line at a rental agency waiting for a paper rental contract to be issued.

That is one reason that earlier this year, Hertz invested in customer convenience by taking a stake in Luxe, a San Francisco start-up that operates as a valet on demand, parking a car when the customer cannot find a space and then handing it back over again when the customer is ready. Although Luxe will park anyone's car, Hertz plans to make it a service option with some of its rental fleet.

To make its valet service feasible, Luxe operates only in parts of Manhattan, Brooklyn, Los Angeles, San Francisco and several other cities. The company returns a car within 30 minutes of the customer's requesting it.

Hertz plans to enhance Luxe's convenience by having employees pick up and deliver cars for customers who rent away from an airport, wherever they are.

"We're on the precipice of very significant changes within the company," said Jeffrey Foland, a Hertz senior executive vice president. Over the next two years, the company will refresh its core technology, including its customer interface and reservations systems. "We want to make the rental process no more complicated than a couple of clicks on a mobile device."

Enterprise, which also owns the Alamo and National brands, is betting that the best way to reduce the stress of a rental is keeping the customer away from the rental counter. It already operates Enterprise CarShare, a service similar to Zipcar.

And now, using Enterprise's new LaunchPad software, available in 17 North American cities, a customer who has booked a reservation is greeted at the rental agency door by an employee holding a tablet. With LaunchPad, the Enterprise employee has real-time access to the locations of cars in the fleet. The employee uses a prefilled reservation and takes the customer directly to the car.

During the car's inspection, any dings are photographed on the tablet through LaunchPad. When the vehicle is returned, the process is reversed, with a receipt emailed to the renter.

"We're moving the process from a transaction to an interaction," said Scott Stephens, an Enterprise assistant vice president.

Avis is taking a different approach. With its new Avis Now app, the company's preferred customers receive automatic notification of the location of their rental vehicle and a picture of it upon reaching the rental lot.

Customers can use Avis Now to change cars while still in the lot, confirm fuel level and mileage and return the car without assistance. With Avis vehicles that have connected technology, the app also allows the renter to open the doors and flash the lights to make the car easier to find.

Yet none of these advancements address the one basic fact about renting a car: Like borrowed evening wear, it may fit, but it is still not as comfortable as your own.

Imagine one day jumping into your rental vehicle and finding your favorite radio stations, seat position and temperature all preconfigured, based on your digital profile. That is a goal that the rental companies say they are pursuing.

"There's an aligned interest between the car manufacturers, Google, Apple and us," Mr. Foland of Hertz said. "We're working with these parties to have customized vehicles in the near future."

resource from: New York Times

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