The road ahead
MORE car-sharing,
streamlined
reservations, checkin/check-out
processes and
self-service models, are what
international transportation
experts predict for the carrental
industry over the next
three to five years.
The evolution of technology
has created an on-demand
environment, especially among
younger travellers who are
used to doing things on the
go from their smartphone or
tablet.
Added to that, in the US
ride-sharing is becoming
increasingly popular. Apps
like Turo (described as being
‘Airbnb for cars’) allow people
to rent a car from someone
in their vicinity, eliminating the
need to make a reservation
with a car-rental outlet.
A report by travel and
expense report management
software company Certify,
found that in the US,
Uber’s share of the ground
transportation market
continues to grow while car
rental declined from 33% in
2016 to 25% in 2017.
If international trends are
anything to go by, the South
African car-rental industry is in
for a shake-up. While Lance
Smith, executive: sales at
Avis Southern Africa, says
ride-hailing services have
had no measurable impact,
Melissa Nortje, executive
head: strategy, development
& marketing at First Car
Rental, says the biggest
impact has been on one/
same-day rentals. She says
there’s yet to be a noticeable
impact on rentals requiring
multiple journeys over greater
distances because the Uber
equivalent is more costly than
renting a car.
“Interestingly though,
availability of products
deemed safe, such as
Uber Black and the quality
of vehicles of Uber X, are
often an issue. Uber drivers
cancelling bookings due to
proximity to destinations is
another problem, from airports
specifically,” she adds.
Wils Raubenheimer, ceo of
Hertz Rent a Car Southern
Africa and Firefly Car Rental
South Africa, says: “We’re of
the opinion that Uber has its
place in the mix, particularly in
respect of customer demand
for short-term, one-day rentals.
We’ve seen some decline
in areas like Gauteng, for
example, where Uber is filling
this demand, but there’s been
very limited impact on longer
term rentals.”
Martin Lydall, chief
commercial officer of Europcar
SA, says although there
are areas where car-rental
organisations and other
transport services can be seen
as competing companies,
their service offering is
complementary. “We believe
there will always be a space
to provide cost-effective shortto
medium-term transport
solutions.”
Tracy Teichmann, manager
of Sure Adcocks Travel in
Pietermaritzburg, says the
biggest impact on car-rental
bookings came from the
Gautrain. “We had a lot
more corporate Joburg car
rentals before the Gautrain. A
combination of the Gautrain
and Uber is more convenient
for our corporates flying into
OR Tambo for meetings in the
Sandton area.
“They take the train and then
taxi or Uber to the meeting.
They don’t have to worry about
finding and paying for parking,”
she adds.
However, George Corbett,
operations executive at
Bidvest Car Rental, says the
traditional car-rental customer
base has maintained the
use of car rental but may
supplement this with Uber for
after-hours usage.
Mixing it up
With more options, particularly
in urban areas, many
travellers take a multimodal
approach to getting around.
This entails a combination of
ride-hailing, public transport
and possibly even vehicle
rental.
A multi-faceted solution,
says Lance, is not something
Avis is considering at this
point. “But, our travel partners
are already offering this to
customers. We have our Avis
Rental offering as well as
Avis Point 2 Point and Avis
Chauffeur Drive. If customers
want to book a combination of
these offerings it is definitely
possible.”
Wils says Hertz is looking
into multimodal ground
transport in Gauteng, but
not other regions as yet. The
company is at an advanced
stage with the development
of its car-sharing business
in international markets.
But, he says: “I believe it is
still a long way off in South
Africa due to lack of public
transport, culture of ownership
as well as security and related
issues.”
According to Martin,
internationally, Europcar has
made extensive investments
in car sharing and ride hailing.
“With car sharing, there are
some local challenges. In
order for these services to be
effective, they need to operate
in high density cities with an
effective and complementary
public transport system. There
is also a higher risk in SA due
to the low level of insurance
in the market,” he says.
Martin says Europcar’s core
product offerings are car-rental
and transfer solutions, which
are underpinned by a dynamic
and flexible home-grown
operating system that is easy
to integrate with other booking
and reservation systems.
“Further development to
enhance these interfaces
and to enable integration
into multimodal systems is
under way"
How to transfer on the GDS
MORE car-sharing,
streamlined
reservations, checkin/check-out
processes and
self-service models, are what
international transportation
experts predict for the carrental
industry over the next
three to five years.
The evolution of technology
has created an on-demand
environment, especially among
younger travellers who are
used to doing things on the
go from their smartphone or
tablet.
Added to that, in the US
ride-sharing is becoming
increasingly popular. Apps
like Turo (described as being
‘Airbnb for cars’) allow people
to rent a car from someone
in their vicinity, eliminating the
need to make a reservation
with a car-rental outlet.
A report by travel and
expense report management
software company Certify,
found that in the US,
Uber’s share of the ground
transportation market
continues to grow while car
rental declined from 33% in
2016 to 25% in 2017.
If international trends are
anything to go by, the South
African car-rental industry is in
for a shake-up. While Lance
Smith, executive: sales at
Avis Southern Africa, says
ride-hailing services have
had no measurable impact,
Melissa Nortje, executive
head: strategy, development
& marketing at First Car
Rental, says the biggest
impact has been on one/
same-day rentals. She says
there’s yet to be a noticeable
impact on rentals requiring
multiple journeys over greater
distances because the Uber
equivalent is more costly than
renting a car.
“Interestingly though,
availability of products
deemed safe, such as
Uber Black and the quality
of vehicles of Uber X, are
often an issue. Uber drivers
cancelling bookings due to
proximity to destinations is
another problem, from airports
specifically,” she adds.
Wils Raubenheimer, ceo of
Hertz Rent a Car Southern
Africa and Firefly Car Rental
South Africa, says: “We’re of
the opinion that Uber has its
place in the mix, particularly in
respect of customer demand
for short-term, one-day rentals.
We’ve seen some decline
in areas like Gauteng, for
example, where Uber is filling
this demand, but there’s been
very limited impact on longer
term rentals.”
Martin Lydall, chief
commercial officer of Europcar
SA, says although there
are areas where car-rental
organisations and other
transport services can be seen
as competing companies,
their service offering is
complementary. “We believe
there will always be a space
to provide cost-effective shortto
medium-term transport
solutions.”
Tracy Teichmann, manager
of Sure Adcocks Travel in
Pietermaritzburg, says the
biggest impact on car-rental
bookings came from the
Gautrain. “We had a lot
more corporate Joburg car
rentals before the Gautrain. A
combination of the Gautrain
and Uber is more convenient
for our corporates flying into
OR Tambo for meetings in the
Sandton area.
“They take the train and then
taxi or Uber to the meeting.
They don’t have to worry about
finding and paying for parking,”
she adds.
However, George Corbett,
operations executive at
Bidvest Car Rental, says the
traditional car-rental customer
base has maintained the
use of car rental but may
supplement this with Uber for
after-hours usage.
Mixing it up
With more options, particularly
in urban areas, many
travellers take a multimodal
approach to getting around.
This entails a combination of
ride-hailing, public transport
and possibly even vehicle
rental.
A multi-faceted solution,
says Lance, is not something
Avis is considering at this
point. “But, our travel partners
are already offering this to
customers. We have our Avis
Rental offering as well as
Avis Point 2 Point and Avis
Chauffeur Drive. If customers
want to book a combination of
these offerings it is definitely
possible.”
Wils says Hertz is looking
into multimodal ground
transport in Gauteng, but
not other regions as yet. The
company is at an advanced
stage with the development
of its car-sharing business
in international markets.
But, he says: “I believe it is
still a long way off in South
Africa due to lack of public
transport, culture of ownership
as well as security and related
issues.”
According to Martin,
internationally, Europcar has
made extensive investments
in car sharing and ride hailing.
“With car sharing, there are
some local challenges. In
order for these services to be
effective, they need to operate
in high density cities with an
effective and complementary
public transport system. There
is also a higher risk in SA due
to the low level of insurance
in the market,” he says.
Martin says Europcar’s core
product offerings are car-rental
and transfer solutions, which
are underpinned by a dynamic
and flexible home-grown
operating system that is easy
to integrate with other booking
and reservation systems.
“Further development to
enhance these interfaces
and to enable integration
into multimodal systems is
under way"
How to book transfers on the GDS
AMADEUS’S new transfer
solution allows travel
agents to book transfers
for travellers locally and
internationally within a
single workflow, under a
single PNR.
The solution is the first
of its kind in the South
African market and was
rolled out in April.
Because the solution
is fully integrated within
the PNR, agents do not
have to manually create
a new segment when
booking transfers. Instead,
the segment is created
within the PNR and will be
cancelled once it has been
cancelled in the platform.
Within the Amadeus GDS
screen, agents now have
a drop-down menu, where
they can access transfers.
The point and click system
lets agents select an
airport where a traveller
needs to be collected and
then input the destination,
date and time. Thereafter,
options are displayed side
by side and the agent can
make the selection.
Once the agent clicks
book, they input the client’s
details and flight number,
after which the provider
sends a confirmation. The
transfer providers also
track flights in case flights
are delayed.
Andy Hedley, gm of
Amadeus Southern
Africa, explains that the
integration allows agents
to simplify their processes
and save time. He says
agents can book transfers
with confidence because
the providers have already
been vetted.
Keeping up to speed
COMPARED with many
of the ground transport
services on offer, car rental
is considered by many to be
the most cumbersome due
to paperwork, queues, credit
card validation and so on.
But car-rental companies
are embracing technology to
reduce the hassle.
First Car Rental, for example,
offers corporates a Show&Go
Corporate Checkout via their
mobile phones at all major
airports. Leisure travellers
can make use of the Quick
Checkout technology to view,
change and add features and
benefits to their rental before
arriving at the branch.
Says Melissa Nortje: “This
gives the renter total control of
what they would like included
with their rental before they
get to the counter, saving
them time, and completing the
customer checkout process in
half the time.”
To remain relevant and
competitive, Lance Smith says
Avis is constantly enhancing
the car-rental experience
through innovation and
technology.
“We have led innovation
for many years in making car
rental easier for our customers
with our global preferred
service programme.
“This service has been
significantly enhanced with the
launch of our preferred loyalty
app, rental apps, in-store
tablets for digital rental
agreement completion, Avis
Now for bypassing the rental
kiosk, the ability to change
your allocated vehicle on your
phone and open that vehicle
with your phone.”
Europcar’s Martin Lydall says
due to more competitors in
the market, Europcar ensures
the ease of booking and
renting, price points and value
propositions remain attractive
to customers. “We not only
pay attention to existing
competitive solutions but
also emerging technologies,
both domestically and
internationally. We gain
significant insight from sharing
ideas and projects with our
international franchisor,”
says Martin.
Europcar’s Ready Service
counter offers re-loaded
customers an express checkout
process that requires no
paperwork and comes with
a service promise of keys in
hand in under 30 seconds.
“We have platform agnostic
Internet booking that
customers can access on
any device at any time,
mobile apps, e-vouchers,
pre-checkout data collection
via Ready-2-Go and a system
that records customer details
so that it is not necessary
to recapture details on every
rental check-out,” he adds.
Michelle Minnaar,
manager at Harvey World
Travel Plettenberg Bay, says
she has noticed that fewer
people are hiring cars, opting
instead for alternatives that
offer cost savings and more
convenience.
“To hire a car, you have to
have a credit card. What about
those who don’t own one? And
then you worry about being
charged for damage.” When
she’s rented a car, Michelle
says she makes sure to take
pictures of any damages or
paint chips before she gets
in, to avoid any disputes on
return.
“Damage to rental vehicles
is a fact of life, often resulting
in long-winded claim and
billing procedures that lead
to customer disputes,” says
Hertz’s Wils Raubenheimer.
Working with a team of
software and operations
experts, Hertz developed a
proprietary Vehicle Events
(VE) damage assessment app
to streamline the process.
Damage to a vehicle is
assessed and charged out
immediately upon return with
this technology.
Tracy Teichmann of Sure
Adcocks Travel believes carrental
companies need to
make the pick-up process
quicker for everyone. “I think
some clients can be put off
by long waiting times at the
counter.”
Bidvest Car Rental, says
George Corbett, has looked
at ways to make the process
simpler and more efficient.
“The introduction, for example,
of a keyless car-rental offering,
SnappDrive, is a good example
of technology being utilised to
make the customer experience
seamless.” He says the prequalification
process and
registration are also examples
of reducing hassle.
Martin highlights that
autonomous (self-driving) cars
are another rapidly developing
technology that will materially
change the vehicle market and
related industries.
“This will be relatively
short in developed countries
where extensive experiments
are already under way.
In developing countries,
however, items such as road
conditions, road markings
and lawlessness are less
favourable, and will pose some
challenges,” he says.
Paying the price
THIS year has seen a VAT increase
and a rising fuel price, which makes
purchasing and operating cars more
expensive. What can we expect
prices in the car rental industry to
do?
Avis’s Lance Smith says these
factors will lead to a rise in the
price of car rental, which will impact
the industry as a whole. Martin
Lydall of Europcar SA, explains:
“The cost increases are real and
the industry will have to recover
some of these increases via price
increases. We remain focused on
our own cost efficiencies so that we
are able to offer very competitive
pricing.”
Further, he says increased prices
result in fewer people being able to
afford car rental, in which case they
will seek alternatives and reduce
usage. “We have already seen this
in the form of a softening market
in the first quarter and a significant
shortening of rental length,” says
Martin.
Wils Raubenheimer of Hertz Rent
a Car Southern Africa and Firefly Car
Rental South Africa, hopes there
will be price increases ahead for
car rental but believes it is unlikely.
“The car-rental environment is
extremely competitive, making it
difficult to adjust or increase rates,”
he explains. He agrees that the VAT
and fuel price increases will impact
the whole industry, adding that
there has already been a decline
in volumes compared with previous
years.
Karen Schwartz, international
sales manager of Hertz Rent a
Car and Firefly Car Rental, says
price, followed by convenience,
plays the most important role
in car rental decisions. “With
respect to rewards, the Hertz Gold
Plus Rewards programme is a
bonus, with features and benefits
that do contribute to the overall
convenience factor.”
Bidvest Car Rental’s George
Corbett says the VAT increase has
resulted in inclusive rates being
adjusted accordingly, but adds that
fuel remains a direct customer
usage cost and, as such, does not
affect the actual customer rate.
“The consumer is very price
sensitive and price does play a big
role in the decision-making, whilst it
is important that the service offering
and rental experience are of the
highest standard as a differentiator.
Some prefer aggregators
Tracy Teichmann of Sure Adcocks
Travel, says car-rental companies
who give clients more options for
booking a car (through an app, for
example) take business away from
travel agents in the same way that
booking flights online has. “We don’t
want our clients steered away from
us for the sake of convenience. We
need to maintain our place as ‘their
convenience’.”
Yumna Kharodia, md of Sweet Life
Travel in Pretoria, says she prefers to
book rental cars with an aggregator
such as Car Hire Bookers.
“It’s easier getting a car and not
having to call individual car-hire
companies during peak periods.
The rates and inclusions, especially
unlimited mileage, are a huge plus
point as well,” she says.
Michelle Minnaar of Harvey World
Travel Plettenberg Bay, also uses
brokers, saying it is more convenient
for her and her clients as everything
is prepaid.
An added bonus for agents, she
says, is that agents earn more
commission since they earn on
insurance as well as the rental.
Productive news
Tech investments
Hertz and Firefly (Hertz’s low-cost carrental
brand) are constantly looking
to use technology to streamline
processes and offer added benefits.
A nominally priced, add-on option
to the rental agreement, the Mobile
Assist App, was launched in May.
The app’s primary services
include roadside, medical and legal
assistance.
There are also plans in place for
Hertz to go entirely paperless in the
near future. Soon, all documentation
will be online.
Minor damage
Europcar has introduced a minor
damage waiver to help reduce the
costs related to and time spent on
minor damage to rental vehicles.
The waiver gives your clients peace
of mind when driving in unfamiliar
destinations, covering their liability
for the first R2 500 (excl. VAT)
