Top 5 Issues Car Rental Industry Is Going To Face In 2021
The pandemic has shaken most businesses and the car rental industry is one such industry that has been impacted the most. The entire 2020 sales in the Car rental industry were impacted. However, experts have predicted a recovery in 2021, it will not be a quick one but hopefully, around the third quarter, things will get much better.
Even though it is expected that the Car rental business will pick up in the third quarter but there are going to be a lot of roadblocks. This industry will have to find innovative and different ways to put their business on track. As the things that once worked for them might not work now.
Below is a list of issues the Car Rental Industry will face :
1. Local Market :
Most of the companies relied on their local area for business. For eg: we could see a large number of cars parked outside the airport for easy access but since Covid hit and flights were canceled there was a significant drop in the revenue. The same applies to other places having high footfall like Malls, markets, etc. There was a significant drop in sales which turned to no sales at all when lockdown began.
Most of the companies, however, came up with innovative ideas like grocery delivery, food delivery, etc to mitigate losses but still, there is a lot to recover from.
2. Lower Rates
Since there was no work at all most of the companies had to lower their rates for health workers and essential workers. Some revenue is better than none. Companies like Uber were still able to stay afloat but most of the local car rental companies were dropped out of the competition as they did not either offer a user-friendly platform or contactless transactions.
3. High competition
The Car rental industry especially the local ones, is suffering due to high competition. The riders are fewer and cars are more. Furthermore, earlier shareable rides could be offered but after the pandemic, it was all prohibited. This competition also led to the closing of a lot of car rental companies.
Companies using high-end car rental software were able to survive due to their seamless user experience, online booking, and contactless transactions.
The car Rental Industry has taken a high strike and has been impacted the most. The ones with better software and better support along with better value were able to stay afloat. All the others had to bear a lot of losses. We expect things to get back on track but now more than even Rental Companies will have to identify innovative ways of proving service to their customers adhering to pandemic guidelines.