Magazine for the professional car and truck rental industry.
Issue link: https://autorentalnews.epubxp.com/i/236613
INDUSTRY NEWS IN-DEPTH CAR RENTAL MEETS CAR SHARING Two independent car rental companies try car sharing from different business models. T BY KELSEY NOLAN THE MAJOR CAR RENTAL COMPANIES NOW CONTROL THE MAJORITY of the car-sharing market and are beginning to realize the synergies with feet and operations. Two smaller, independent car rental companies are following suit — but from different business models. FLEETING UP FAST "When someone sees their brand underneath our brand, 'Student CarShare powered by Discount,' there's a credibility that goes along with that," Lende says. GROWING, WITH PAINS Gil Cygler, president and CEO of AllCar Rent-A-Car serving New York's boroughs, founded his car-sharing outft Carpingo a year ago in Brooklyn. Michael Lende, founder and CEO of Student CarShare, saw a need for a carWhile operating a traditional car rental company for more than 30 years sharing service that catered to an underserved yet obvious market — rentgave Cygler an advantage in car sharing, he explains his continuing chalers ages 18 to 25 on college campuses not served by the major car-sharing lenges. players. "Member attrition is pretty high," Cygler Lende, who helped establish Zipcar in says, adding that the challenge of constantly Toronto, partnered with Discount Car and Truck replacing members is different than car rental, Rentals, one of the largest independent car which has a steadier, fxed customer base. rental providers in Canada. In September, Lende "We're still learning who joins — why and launched the car-sharing service at 16 campuses when." in and around the province of Ontario, Canada. Utilization is heaviest during the weekThough they operate as independent companies, ends, while midweek rentals are still diffcult Discount provides the feet of Kia vehicles and in as Carpingo tries to gain corporate clients. return receives a portion of Student CarShare's The high cost for the car-sharing technology overall profts. (about $1,200 per unit) and time to install Lende explains that the biggest challenge for a (two to four hours) creates barriers for sharing Car Share Operator (CSO) is building a feet. The feet between AllCar and Carpingo. partnership with Discount not only eliminated Parking issues persist, as market leader this cost, but it also allowed Student CarShare Zipcar continues to hold a monopoly on to launch in 16 markets at the same time. "[The Student CarShare leverages its partnership with Discount certain parking garages and locations. Discount partnership] allowed me to set up shop Car and Truck Rentals through its feet buying power, Carpingo vehicles are parked in private lots, without the major overhead that most CSOs have operations infrastructure and ability to cross promote. an especially high expense in New York City. to worry about," Lende says. "I can add cars Cygler says that while a traditional car rental quickly, without pain points." lot might rent for $3,000-$4,000 a month, he's paying $200-$400 per spot The companies are complementary in many other ways. While Student for his Carpingo cars. CarShare's demand centers on the school year months of September to May, Cygler also didn't foresee the level of gas fraud Carpingo experiences. Discount's highest demand season is the summer. Lende says it's too early As a result of renters using the provided gas cards to fll up personal tanks, to report on feet sharing, but he anticipates the opportunity to cascade cars daily gas audits and in some cases membership cancellations have become to the Discount feet in the spring for the busy summer rental season. Nonnecessary. students use the service as well, and having "Student" in the name serves So far, Carpingo has seen less damage to its feets, while shorter trips as a marketing angle for cheap rates, Lende says. means mileage is kept low. To be able to cater to younger drivers, Student CarShare leveraged DisVolume for Carpingo has picked up and revenue per day is trending count's longstanding insurer relationships. In addition, Student CarShare upward, though "We'd like to see it a little higher," Cygler says. requires that members have a valid credit card and no more than one Cygler is fnding that car sharing requires constant attention. "With car minor moving violation in the last three years. Lende says 86% of applicants rental, you close your doors at night and you just have to hope that the cars are approved. don't break down," Cygler says. "[With car sharing], monitoring overdue As well, feet transport, maintenance and car sales are handled through rentals and activity is almost a 24/7 task." Discount, and Student CarShare is able to promote at Discount locations. 12 January/February 2014 AUTO R ENTAL N EWS