Online Car Rental Platform Market

Market Overview

An online car rental platform can be termed as an online portal, website, or mobile application used by service providers to rent their vehicles and customers to procure a rental vehicle from a remote location using the online gateway. The platform provides client communication and client support using an online module and also caters tothe business management needs of online car rental operators. The platform is focused to provide essential features, such as an online booking engine, fleet management services, vehicle availability information management, driver information management, order booking and tracking the order, billing and invoicing for the customer, and an online payment module.

Market Dynamics

Growing Travel and Tourism Industry

The travel and tourism industry is one of the largest and fastest-growing industries in the world, with the industry surpassing the global rate of economic growth. For Instance, in 2018, according to the World Travel and Tourism Council, the travel and tourism sector grew at 3.9% to contribute a record USD 8.8 trillion and 319 million jobs to the world economy.

International tourism continues to perform strongly around the world due to the growing air travel, constructive economy, and increasing visa facilitation. For instance, more than 50 countries, including Thailand, Maldives, Kenya, Jordan, and Fiji, among others, offer ‘Visa on Arrival’ for Indian citizens. According to the UNWTO World Tourism Barometer, in 2018, international tourist arrivals grew 6%, reaching 1.4 billion tourists

Additionally, North America’s travel industry is witnessing growth in leisure as well as business travel; according to the U.S. Travel Association, in 2018, direct spending on leisure travel in the U.S. by domestic and international travelers totaled USD 761.7 billion. Online car rental companies are adopting new technologies to offer online booking services for tourists looking to explore new regions as online bookings provide convenience with e-signed contracts, pick up and drop, cashless transactions, and many other features.

Declining Car Ownership among Millennials

Millennials are altering life-choices, which is affecting vehicle ownership. According to Genser Energy, the net effect of the endogenous choices of millennials is less than a 1% decline in vehicle ownership. The generation is more open to collaborative consumption programs, such as sharing a home, vacation sharing, media sharing, and car-sharing. The high cost of gas and maintenance makes car ownership an expensive affair and millennials prefer intelligent mobility solutions over owning a private car to evade the associated costs.

As per the analysis of preference of the drivers, 55% have actively made an effort to drive less, compared to 45% in the same study in 2010. Millennials are the most likely age group to participate in the ‘sharing economy’ (67% would participate in media sharing and 49% in home/vacation sharing). About 40% say they would participate to save more money for retirement or buying a home. The generation still values the mobility and convenience of driving but increasingly seeks alternatives to personally owning a car.

Regional Analysis

With Increasing Preference of Consumers in the U.S. and Canada, the Market of Online Car Rental Platform to Witness Skyrocketing Growth

North America is home to many prominent online car rental platform developers and also online car rental service providers that are making strategic developments to lure in customers and cement their revenue share in the market. The players, such as Avis Budget Group and Hertz, are trying to explore the untapped market in the region by providing rental services to the drivers of Transportation Network Company (TNC). By adding rental services for goods carrier vehicles in their portfolio the companies are striving to widen the scope of their existing customer base in the market

Peer 2 Peer rental services in the region are also witnessing a heavy upsurge. For instance, Turo Inc. has increased its available vehicle fleet up to 400,000 vehicles on its platform. The company has almost doubled its vehicle fleet over the past two fiscal years. The commendable development in the performance of P2P service providers also projecting a promising picture for market growth. Similarly, HyreCar made a significant change in terms of rental fleet procurements from the vehicle dealerships, which are ready to operate as rental service fleet providers. The participation of vehicle dealerships in the market is expected to provide a significant upsurge for the market.

With the increasing preference of consumers in the U.S. and Canada towards rental services for the daily commute and during holiday travels, the market of online car rental platforms is projected to exhibit skyrocketing growth.

Segmental Analysis

Self-Drive Online Car Rentals Segment to Dominate the Market

The self-drive online car rental car is categorized as one of the most sought-after modes of commute preferred by many online car rental customers. Self-drive online car rental services provide the customer with full control over the rental vehicle for the stipulated time period. The services enable the customer to leverage benefits, such as freedom to change the time of departure and route for travel as per the convenience and also the requirement of the situation.

Additionally, the control of wheels at the hands of the customers ensure them about the safe and secured journey and also at times help customer to avoid the rash driving of taxi drivers. The self-drive private rentals also help customers to avail privacy benefits while the customer is enjoying a holiday tour or is on a leisure tour.

The self-drive rental segment is also targeting young professionals as the most prominent customer base to procure self-drive online car rental services.The emergence of multiple start-ups operating as a self-drive rental service provider adds an extra benefit for the customer to choose the most cost-effective and suitable provider in the market. The induced level of competition also encouraging service providers to inculcate new and customer-friendly feature in their offerings which is also to positively affect the market growth.

Tourism and Leisure  to Bolster the Short-Term Segment Growth

The prominence of the self-drive rental platform across the markets can be termed as the most impactful factor in the growth of the short terms online car rental service providers. Many platforms offer hourly, daily, or even monthly online car rental services to their customer. This service proves extremely useful for tourists looking to procure vehicles in tourist destinations for a limited time period.

Additionally, increasing the participation of companies to establish themselves in the online car rental market is a factor strengthening the opportunities for growth of the segment. For instance, in Argentina and Latin America, many regional online car rental agencies are working for the digitization of their operations by venturing into partnerships with such developers. These companies are aiming at operations within the most visited tourist destination cities to develop their sales in short term.