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Will Uber and Lyft Kill Rental Cars?

Home 5 Blogs 5 Will Uber and Lyft Kill Rental Cars?

Will Uber and Lyft Kill Rental Cars?

Home 5 Blogs 5 Will Uber and Lyft Kill Rental Cars?

Back in November, Hertz rental car shares fell sharply when the huge rental car company slashed its profit forecast for the year. Hertz (which also owns Dollar and Thrifty) blamed it on vehicle depreciation, but depreciation may be the least of the rental car industry’s worries as we move into 2017.

Over the past several months, I’ve become a fan of Uber and Lyft. With these services at my fingertips, I’ve discovered that I seldom need to rent a car when I travel. I avoid long lines, confusing contracts and surcharges. I have a driver to chauffer me about and I don’t have to learn my way around a strange city!

In a recent column, New York Times writer Ron Lieber reports that he also avoids renting cars when he travels. Uber and Lyft’s apps make summoning and paying for a ride effortless, but rental car companies seem bent on making the experience as difficult and unpleasant as possible.

For example, I’ve written about reports that Payless Car Rental imposes draconian refueling policies and charges customers for insurance that they declined. But Payless isn’t the only one providing negative experiences. Here are a few incidents that I or the people I know have encountered at a variety of rental car counters in the past few months:

· Reserving a car online, and then arriving at the rental car facility and being told that there were no cars available. Getting a car only after traveling to another location across town. And not being offered any discount, upgrade, or even an apology.

· Renting a car that smelled like smoke, mentioning it, and being told, “Oh, well, I guess someone smoked in it when they weren’t supposed to.” Again, no apology, discount, upgrade or offer to switch to a different car.

· Taking a shuttle from the airport to the rental car location, waiting in line for 20 minutes to speak to an agent, and then waiting another 20 minutes while the agent mysteriously disappeared. Then being sent out in the dark with a form (but no pen) to inspect the car and mark any pre-existing damage.

· Being told that the car had to be refueled within one mile of the rental location, being assured that such stations existed, and then being unable to find one that was open at 5 am!

Add to this the usual confusing car classes (what exactly is the difference between compact, economy and intermediate?), array of refueling options, and scary insurance waivers and it’s no wonder I’d rather just use Uber.

Think back to the last time you rented a car. What do you remember about it? If you’re like me, you remember the interaction you had at the rental car counter – how you were treated, how easy it was, whether they had the car you expected, and how stressful it was to complete the paperwork. If things went badly, you remember not only the negative experience, but also the name of the rental car company that provided it.

It’s these kind of memories – good and bad – that build or destroy long term value for any brand. In the case of rental car companies, when we have bad memories of interactions with multiple companies, it begins to destroy value for the industry as a whole. I discuss this in depth in my recent book, The Intuitive Customer: 7 imperatives for moving your Customer Experience to the next level, co-authored with Prof. Ryan Hamilton of Emory University.

And as Uber and Lyft expand into more areas and add services like advance reservations, rental car companies are going to start losing more business if they don’t start paying attention to what their customers want and need. In our customer experience consultancy, we’d use tools like customer mirrors and behavioral journey mapping to understand what customers are thinking and feeling and design a better experience.

But I don’t expect big changes from the major rental car companies anytime soon. As Mr. Lieber noted in his column, Hertz and Avis didn’t even return his calls asking for comment.

Would you rather catch a ride with Uber or Lyft, or rent a car? Tell me what you think in the comments section below.

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