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Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

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Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#41

Post by ablefire »

I don't rent cars all that of then so there may be all kinds of Pro Tips that I don't know.

My biggest gripe with car rentals is not the experience at the counter but the schlep from the terminal to the rental car district. First there is the wait for the shuttle bus, then the tour of the other terminals, then the drive to the rental lost. By the time you get to the counter you've lost 30 minutes of your life to waiting and ferrying.

So for me the core problem is that the car is not somewhere extremely convenient at the terminal when I need it. I do recall some uber-statused folks at my work having the rental car company meet them at the curb with the car but this seemed to be an arcane and rarified perk.

It's kinda like the last mile problem. Once you actually get to the rental hub then it's pretty painless and quick but getting from the plane to the rental lot is a slow mess.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#42

Post by bradleyjg »

aneth4 wrote: post #14

Airport car rentals tend to be pretty cheap ( AirBNB is competing with high priced hotels that often are booked and an existing inefficient P2P subleasing business. Uber is competing with taxi services notorious for poor responsiveness and frequent gaps in availability. I don't see the same room for disruption in the airport car rental market, but there is likely some room for innovation. Don't count on Hertz and Pay…

Indeed. People look at a car rental business and think 'I can offer better customer service'. Maybe, maybe not but that's only one of the necessary business lines.

Rental car companies are the largest buyers of new vehicles in the world, and more importantly the largest sellers of used cars. What's your strategy in those areas? What's your cost of working capital going to be? Ditto with insurance, these companies generally self insure the collision, can your startup afford to do that?

Then there's counter space at the airport. These generally come on the market rarely and at a different time and process for each airport. How are you going to compete when your lot is a twenty minute shuttle ride, and your competition has a lot in walking distance from the terminal?

I'm not saying it's impossible but the barriers to entry are high.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#43

Post by genwin »

You shouldn't let strangers use your car. You are liable for the vehicle regardless who's driving it. Photo traffic tickets and tolls are just the start of the liability issues. When the stranger driving it gets into an accident, you'll be sued too.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#44

Post by ricardobeat »

aes256 wrote: post #39
ricardobeat wrote: post #36

Earlier quoted context omitted.

"A pretty good job" (not so pretty when you are waiting in-line for an hour) is not enough. If they can do the grunt work just as well, or better wrt refuelling/cleaning, and a better booking system , they will win. You also missed the picture of car sharing.

> "A pretty good job" (not so pretty when you are waiting in-line for an hour) is not enough. You can bet the leading companies have already invested huge amounts seeking out efficiency savings and ways to improve customer satisfaction. Slow moving and bogged down in bureaucracy they may be, but if there were a simple way to avoid common customer complaints (e.g. long queues) without hurting the bottom line, they wou…

The big names are trying to do the same: Hertz On Demand, Avis on Location, etc. But they probably generate lots of revenue from the extra fees and hidden costs, so they have less of an incentive to switch to more friendly setups.

It's a warming thought that companies are always looking to improve customer experience, but more often than not, they will not do something because it doesn't improve the bottom line, not the opposite. And "hurting the bottom line" depends on the business model, that's where the market can be disrupted.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#45

Post by rprasad »

mseebach wrote: post #17
jacquesm wrote: post #9

Earlier quoted context omitted.

You can't just be 'double insured', insurance is usually on the license, not on the driver. So if I put another driver in my car he/she can claim whatever they want, the law here is that the license owner is the one taking out insurance. By law, as soon as a vehicle is on public roads the owner of the car has to have mandatory insurance. I'm not quite 100% clear on what the situation would be if someone else would be…

> You can't just be 'double insured', insurance is usually on the license, not on the driver. In the US, that's not the case - I'm not perfectly sure how it works, but you can often use your own car insurance when you're driving a rental. And of course double insurance is possible, it's entirely up to the insurance company. Insurance is obviously one of the things FlightCar would need to deal with. All in all, the is…

The issues FlightCar faces are very different from those AirBNB faces.

For starters, auto insurance is mandatory in the U.S.; homeowner's insurance is not. Strict laws govern auto insurance coverage, liability, and claims. These laws vary by state. This means that accidents by a renter can affect no-claim policies in many states.

Second, as others have noted--cars are easy theft targets. Homes are not, and aside from a few high-dollar items like TVs or computers, neither are the contents of most homes. Assuming that FlightCar is able to find an insurer willing to cover this theft risk, the policy would start in the millions just for California-level coverage.

Finally, asset seizures are a far bigger problem with cars than with homes. A car used to transport drugs can be seized by the authorities and impounded. The laws are very generous to the authorities for drug-related asset seizures. For purposes of drug-related asset seizure laws, if a person is driving a car with permission of the owner (i.e., even as a rental), their actions are imputed to the owner for purposes of justifying seizure. (This maxim has been tested repeatedly in the courts.) In other words: if a renter transports drugs, gets caught, and your car gets seized, you're SOL. Insurers don't cover this at the personal level; even if they provide coverage to a business like FlightCar the policy would be prohibitively expensive.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#46

Post by rprasad »

mseebach wrote: post #18
aneth4 wrote: post #14

Airport car rentals tend to be pretty cheap ( AirBNB is competing with high priced hotels that often are booked and an existing inefficient P2P subleasing business. Uber is competing with taxi services notorious for poor responsiveness and frequent gaps in availability. I don't see the same room for disruption in the airport car rental market, but there is likely some room for innovation. Don't count on Hertz and Pay…

The biggest problem with car rental is the paper work - for some reason it can take five-ten minutes per customer to deal with, if nothing goes wrong. I've waited 20+ minutes on multiple occasions. There is literally no reason it can't be handled online well in advance (and it typically is, but for some reason it's repeated in person). Car rental needs something like airline self-service check-in kiosks more than Fli…

Join any "Gold" or "Executive" level offering from any car rental company. They've offered these plans for years--paperwork is handled when you join, and thereafter your wait time for a car is usually the amount of time it takes you to pull your member card out of your wallet.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#47

Post by rprasad »

pbreit wrote: post #3

Flightcar sounds like a tough call...a lot of moving parts to save a few bucks on parking and/or car rental and with added anxiety for both parties. Silvercar sounds more like how renting a car should be (except for the limited car options)(I'd go with a Toyota/VW lineup). The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-custo…

*The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-customer gas policies.

I suggest you patronize different car rental companies. Discount car rental companies skimp on the service and choices. Better ones (Enterprise, Hertz) focus on the service and only cost a dollar or two more a day than the discounters.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#48

Post by aneth4 »

mseebach wrote: post #18
aneth4 wrote: post #14

Airport car rentals tend to be pretty cheap ( AirBNB is competing with high priced hotels that often are booked and an existing inefficient P2P subleasing business. Uber is competing with taxi services notorious for poor responsiveness and frequent gaps in availability. I don't see the same room for disruption in the airport car rental market, but there is likely some room for innovation. Don't count on Hertz and Pay…

The biggest problem with car rental is the paper work - for some reason it can take five-ten minutes per customer to deal with, if nothing goes wrong. I've waited 20+ minutes on multiple occasions. There is literally no reason it can't be handled online well in advance (and it typically is, but for some reason it's repeated in person). Car rental needs something like airline self-service check-in kiosks more than Fli…

This can be a problem, though I doubt an alternative airport parking based service would be much quicker.

As mentioned by others, Hertz Gold etc really ups the service, but it's usually not worth the 2-4x you pay on the rental.

I've found Payless and Fox both to be the cheapest and provide adequate service. I've had run-ins about fees and such, but generally I fell I get excellent value.

Re: Airport Car Rentals: The Next $10 Billion Industry Ready For Disruption

#49

Post by pbreit »

rprasad wrote: post #47
pbreit wrote: post #3

Flightcar sounds like a tough call...a lot of moving parts to save a few bucks on parking and/or car rental and with added anxiety for both parties. Silvercar sounds more like how renting a car should be (except for the limited car options)(I'd go with a Toyota/VW lineup). The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-custo…

*The things that are completely stupid with current car rental companies: 1) lengthy checkout process, 2) inability to choose car and 3) anti-customer gas policies. I suggest you patronize different car rental companies. Discount car rental companies skimp on the service and choices. Better ones (Enterprise, Hertz) focus on the service and only cost a dollar or two more a day than the discounters.

The more expensive agencies are routinely double the price. And I'm not sure they fare much better on the points I mentioned.
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