The millennial generation is lagging behind the traditional age groups in car ownership. It is not uncommon to find this generation without a car. Thankfully, the rise of smartphone applications has made it easier to reserve and rent a car for a trip. These apps provide convenience and ease of booking, and online payment methods have made the entire process hassle-free. Overburdened public transportation systems and social distancing guidelines are also propelling the market growth. And, the COVID-19 pandemic has influenced the population to adopt vehicle rental services.
Smartphone-Based Car Booking Applications
Smartphone-based car booking applications are becoming more popular in the automotive industry due to the rising penetration of smart phones. Apart from the usual services like rental car, many car rental companies are now offering services that can be used for both long-term and short-term rental. Moreover, most of these services are available in popular tourist destinations and tier-II cities. The growth in this industry has been attributed to several factors such as affordability, car prices, and pollution. In addition, the car rental industry has gained enormous attention from both manufacturers and consumers and is now offering lucrative schemes.
Apart from making it easier for customers to make reservations, these applications allow users to book multiple cars at a time and also update their personal information. Moreover, car rental apps offer users the convenience of navigating to their pick-up point with ease. Additionally, the car’s location is also live-tracking, which ensures security. Rental applications also save an algorithm for bookings that can be shared with the service provider. This information helps them allocate cars and drivers according to user behavior.
Low Rate Of Car Ownership Among Millennials
With a low rate of private car ownership, millennials are opting for car rental. This trend has several reasons, including low ownership costs and fuel efficiency. Moreover, ride-sharing services are growing, making car ownership less desirable. In addition, more millennials are living with roommates and near their workplace. These factors may make car rental more popular among millennials. However, the low rate of car ownership among millennials does not mean that renting a car is the only option.
According to a recent survey conducted by Enterprise Holdings, most millennials find car ownership important. However, a significant proportion of them also see car rentals as an extension of test drives. The survey further found that a quarter of millennial respondents consider car rental as a convenient way to test drive different brands. This trend translates into a significant opportunity for car manufacturers. These companies have the advantage of long-term customer relationships.
Impact Of COVID-19 Pandemic On Car Rental Industry
The recent COVID-19 pandemic impacted global economies and businesses across verticals, but it has had a mixed effect on the car rental industry. Lockdown measures and travel restrictions were among the major challenges. However, the widespread disease has made rental cars a safer mode of transportation, and this has positively affected car rental revenues. This shortage will continue until the virus is eradicated and travel restrictions are lifted.
Among the key players in the car rental industry, Speedy Drive is one the fastest-growing segments. Several major players are preparing for the future and are focusing on service enhancements. However, this disease outbreak may affect growth.
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