A Shift in Car Rental Industry Battlefield from Supply Side to Demand Side

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When car rental companies started feeling heat from a big appetite of OLA and UBER mainly it was on the supply side.  Lucrative incentives, cash collection and weekly settlement of dues were attracting vendors and drivers to APP based companies. Traditional car rental companies started facing challenges, but were still having good hold on the demand side which was flowing mainly from corporate base.

Sequential acquisitions, mergers and closures of eligible competition by the power of funding from deep pockets are clearly indicating the intentions of becoming largest player within their domain.

In car rental domain following few initiatives from UBER and OLA is indicating that the battlefield scenario is changing very fast as they are going to attack from the demand side also.

  • OLA launched corporate offering with option of invoice in company name, monthly payments and corporate dashboard etc. Their serious effort is giving them results too.
  • OLA’s option to book for outstation is also a new initiative to enter in the most profitable utilization segment.
  • UBER has provided an option to book a cab without sign-up, making it more easy for customers
  • UBER is testing Book-Later Testing is launched in London last week with a 30 days advance window.
  • UBER launched testing of driver-less cars in Singapore last week to eliminate need of drivers in future. Today people do have questions on this technology, but I am sure 20+ years of hard work from so many technology guys will certainly establish itself.

Will traditional business model owners/managers will be able to notice this apparent change or will they take more time to gauge the depth of dent their big rivals going to create in their strong customer base like they took in their first battle of supply side.

Do the traditional car rental companies have something special which the sharks of industry can’t afford or adopt? I believe it is a matter of time only and signs are very clear and visible of competition approaching fast within their strong zone and will challenge them from both ends of business that is Supply side as well as Demand Side.

Customers, especially corporates, do not always look for cheap rates but also consider a package deal of viability, reliability and accountability.

It’s high time for traditional car rental companies to come out from comfort zone and start adopting technology of GPS and APPs to fulfill new aspirations of their customers like ease of making booking, booking at short notice, cost optimization, track a ride, same day invoice and many more which technology and only technology can provide.

Corporate managers will not take much time in switching their customer loyalty which is been considered as an invincible castle by old champions of industry.

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