In a previous post, we described how we see the used car market changing as the Connected Car evolves. Here, we focus on the Car Rental sector with particular emphasis on how data collection can impact the sector. (Note that while we focus on the power of the data here, we do view the Connected Car as offering more – see our vision post for details).
The car rental sector is very interesting from a Connected Car point of view from two particular perspectives. Firstly, the Connected Car sector is comprised of quite a few big organizations who can roll out Connected Car technology across their entire fleet quite easily. Secondly, the car rental sector is seeing some disruption with peer-to-peer solutions offering lower cost services – the Connected Car fits neatly into this paradigm shift. Both of these perspectives are examined a little further below.
The classical car rental agency typically owns a fleet of cars which it provides to its customers for a short period of time. These business often have quite sophisticated IT infrastructure to manage their business – customer bookings, inventory at any time, customer loyalty programmes, car related information etc. However, they still do not know so much about what happens to their cars after they leave the lot: yes, they know how many miles have been driven and they have records of the external state of the car after each rental, but they don’t know where the car has been, how many trips the driver made, what the driver’s style is like, etc. Hence, their understanding of their customers is wanting in many respects.
It is relatively easy for car rental agencies to roll out Connected Car capabilities within their organizations. They often have fleets of quite homogeneous cars and can install some monitoring functions with relative ease. This would immediately give them a substantial data set which they could mine for intelligence both on how their customers use their cars and how their cars are performing; the former would be good for targetting specific services at their customers, while the latter would be good for ensuring that their fleet is always in peak condition.
Peer-to-peer car rental agencies are a relatively new development, which is trying to use the internet to match individuals who want to rent cars with those who have cars available. Relayrides and Flightcar are good examples of these services. Data collection is very important in the context of these services: those providing their cars to the system would like understand where their car goes and how it is driven. Further, before allowing a specific individual to have their car, they would like to have more information on his/her driving history.
For the above reasons, P2P car rental systems offer good incentives for individuals who participate in the scheme to install Connected Car solutions in their cars. These can then be integrated with the rental platform and the data made accessible to both the car owner and the renter. This will increase the value of the platform to all parties: the car owner, the renter and platform provider.
It is clear that the car rental sector can benefit from the rich data which can be provided by the Connected Car and it is highly likely that this will be quite an early adopter of these technologies. However, there is still much work to do to develop the tools and systems to enable meaningful, actionable information to be extracted from this deluge of data.