PHOTO: Travelers at a Hertz counter in 2009. (Photo courtesy Flickr/Steve Damron)
According to CNN Money, car rental companies like Hertz are having a remarkably rough time at the moment, and you can place a great deal of blame at the feet of ride-hailing apps like Uber and Lyft for the shift in ground transportation use among travelers.
The report issues just how bad things have become for what was and still might be a classic mode of transport for travelers landing in destinations all over the country: “The car rental company's stock tanked over 50 (percent) Tuesday morning after it cut its forecast for future growth and reported weak earnings Monday night.”
The norm would be landing in your respective departure city of business or holiday import and then making your way to the car rental counter or to the taxi line outside the airport.
Well, times have changed. A great deal more travelers, whether out for business or pleasure, hop on their phone and hire a ride off Uber the second they land. Or, at the very least, they decide to use that method to squire themselves about town once at the hotel.
Gone are the days when its more affordable and efficient to rent a car than it is to just use an app and forego the time suck that is waiting at a counter for access to your car.
That, at least, is the presumption. The numbers are quite real and tell a grim story for companies like Hertz.
The report states that Hertz rallied from its worst showing since 2008 and was still down 30 percent by the middle of Tuesday. As for Avis, it also saw an 18 percent decrease in its stock.
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Back in October, TravelPulse reported on Certify’s most recent survey on business traveler’s habits on the road, and it highlights growing trends in the travel industry. Its SpendSmart report shows expenses from its surveyed travelers. The recent results illustrates Uber and ride-sharing companies now surpass taxis for ground transportation and make up over 50 percent of that part of the sector.
At the time, Certify CEO, Robert Neveu, expounded on the industry’s evolution: “Of all the disruptive technologies to come out of the sharing economy over the past several years, nothing has captured the interest of businesspeople or captured more headlines in the media than Uber and global rise of ride hailing. Tracking at 52 percent of the ground transportation total in the third quarter, it’s remarkable to see that ride hailing is now more frequently expensed by business travelers than taxi and car rental combined, and more popular than taxi at anytime during the three years Certify has been reporting on this data.”
There is still a tremendously viable market for car rental, but it will take innovation, efficiency and ease for the consumer to keep the industry afloat. When it’s so astoundingly efficient and inexpensive to simply hail a car via your phone, the idea of having to lug around an entire car for the weekend loses its luster.
Let this be a wake-up call for companies like Hertz. Consumers want simplicity, especially during the most stressful aspects of the travel itinerary.