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Connected Cars Present Great Opportunity for Car Rental Companies

Similar to mobility, connected car technology (e.g., telematics) has been around for some time, but only recently has the car rental industry truly exploited the massive opportunity it presents. The Internet of Things (IoT) has allowed companies to leverage new technology that better manages their fleets of cars. It’s also helping businesses, such as those that rent trucks for construction and landscaping, to closely monitor the performance and safety of their vehicles and drivers.

For car rental companies, there are plenty of uses. For example, it allows them to better track idle cars. The technology can also inform them when cars are ready to be rented, completely transforming the planning and inventory process.

Another example of how connected cars can help improve operations relates to fuel monitoring. A connected car can let companies and consumers know how much fuel was in the tank when the car left the lot and how much fuel it returned with. This accuracy and transparency is a win-win for consumers and car rental companies alike. It also represents an opportunity to increase fuel revenues and reduce fuel costs. The bottom line is that connected cars offer many opportunities to maximize operational efficiency and boost customer satisfaction, which is why companies remain keen on testing new technology.

In February 2018, I.D. Systems, a leading provider of enterprise asset management technology, announced that Avis Budget Group would convert 50,000 vehicles into connected cars by installing the company’s telematics solution. According to Arthur Orduña, executive vice president and chief innovation officer, Avis Budget Group, “The integration of I.D. Systems’ UTP will accelerate our ability to meet our goal of a fully connected fleet by 2020. Connected cars offer us unparalleled potential to dramatically improve the customer experience while also streamlining operations and reducing costs, which is why we’re taking aggressive steps to fully connect our fleet as quickly as possible.”

Avis Budget Group recently reiterated that connected cars represent a major growth initiative for the company. Its exploration of new connected car technology is a great example of the industry’s growing desire to adapt to consumers’ changing habits. In November 2017, the company announced it had created a “Mobility Lab” that “serves as a test bed for fully connected vehicles and operations.” One month later it said it was testing key-as-a-service (KaaS) technology. The company says that it “empowers Avis customers to use the Avis mobile app to lock/unlock the car and start the engine.” Avis Budget Group’s president and chief executive officer, Larry De Shon, said, “Keyless car rental not only offers customers the ultimate in convenience and personalization, but it also enables us to accelerate our offerings into new markets as we continue to innovate the overall car rental experience.”

The car rental industry is embracing people’s changing habits and a new operating environment. Car rental companies are responding with intelligent strategies, innovative ideas, and technology investments that can help drive operational efficiency, growth, and profitability. These are the strategic initiatives on which industry executives must focus to remain relevant. To learn more, download our new guide: 2018 State of the Car Rental Industry.

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