Companies operating in car rental industry have realized that they are now not only operating to provide access to care but rather have to focus on mobility solutions. Users are currently looking for fulfilling variety of needs rather than just fulfilling one function. The market for car rental is witnessing a dynamic shift and hire companies now offer variety of features to address their corporate clients need. To improve their own utility, companies have come up with car pooling or sharing mechanism. Global Car rental industry is expected to grow at a CAGR of 13.7% and reach an approximate market value of USD 127 Billion by the year 2022. This growth potential has been coupled with unorthodox services by the hire companies which include car pool servicing.
Car-sharing, or carpooling, started life as a motor vehicle version of hiring a DVD. Renting is no longer just a financial alternative to owning – user paid for a period of use, not for access at any time. The new service of carpooling, the user only pays by use. The person hires the vehicle when he or she confirms the booking via a device and stops when the user ends the booking. Car sharing companies fulfill an important function. Both public sector companies and private companies have number of employees residing in different areas nearby and far-off. These companies look for mobility solutions for their employees to and from their workplace. These companies look for vehicular rental services to be provided to their employees. This is where car rental cash in with their pooling service by providing easy and efficient services. Since car booking is allowed at intervals of hour and half hour, it allows multiple employees to use the car pooling service. For the corporate client, there are also three ‘hidden’ benefits that accrue. First, duty-of-care is taken care of i.e. the users do not have to worry about the maintenance associated with the companies; second, these cars will be much lower-emitting than the typical privately-owned car; and third, one of the unexpected benefits is that it eliminates the need to drive to work. If the employee uses his car he shall have to drive it in the first place however, once an employer provides a car-sharing service, number of people use car sharing service which works as a positive externality to the employees motivation as they do not have to worry about traffic or driving to their workplace.
Currently UBER and Lyft dominate the market in the car pooling segment of car rental industry of US. UBER is a huge corporation with deep pocket which not only functions in this segment but also has other number of services. There have been many companies that have entered the market in the past year. These include Juno, Gett, BlaBla Car who although have a small market base but still have entered the market to explore untapped potential.
With rise in revenue of corporate clients and the need to motivate employees with non monetary incentives, companies have increased their demand of such services which opens up the pooling segment of car sharing. Thus, this industry will expand further in the coming years to serve both corporate and private customers efficiently and effectively.
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Ankur Gupta, Head Marketing & Communications