As a frequent traveler, Chandra Gore has noticed some surprising changes when she rents a car.
There is a better selection of vehicles for starters.
“When I rent at the airport, I have more options, even after I’ve selected a vehicle class,” says Gore, a communications consultant from Stafford, Virginia. “I’ve even been offered electric and luxury cars as upgrade options.”
And there’s something else she doesn’t hear anymore: “We don’t have any more cars.”
So far there are many vehicles.
The car rental industry has recovered from a pandemic-related shortage that has pushed rates to historic levels. Customers notice. There are new ways of renting cars, there are new technologies – and of course prices have come back to earth in many cities.
What’s new for rental cars in 2023?
Everything is new in the car rental industry this year.
- New technology. Car rental companies are testing and implementing new technologies. For example, Enterprise Holdings launched a company-wide initiative to improve customer experience. First, National’s mobile app has been redesigned to enable one-click reservations and provide users with a streamlined reservations experience.
- New options. One of the highlights is Audi on demand (formerly Silvercar), which was expanded at the end of 2022 and added new long-term rental options. The app-based service leverages a network of Audi dealerships across the United States to give customers more options, including the ability to rent a new Audi for weeks or even months.
- New electric vehicles. Hertz has taken the lead in electric vehicles with several ambitious orders for Teslas in Europe and the United States. Hertz estimates that electric vehicles will soon make up more than 20 percent of its global fleet. According to the company, the new electric vehicles will be supported by a combination of Level 2 and DC fast charging in more than 100 markets by the end of 2023.
Renting a car is more popular than ever, if the number of web searches is any indication. According to Semrush, internet searches for “where to book cheap rental cars” have increased by 2,850% in the last year.
But what does all this mean?
Car rental companies compete with their “latest and best” customer experience
A massive shift is underway in the car rental industry, says Mario Matulich, President of Customer Management Practice.
“Car rental companies no longer compete with other car rental companies when it comes to customer experience,” he says. “You compete with the latest and greatest customer experience.”
Matulich says while many car rental brands still follow the same concept, others have evolved in 2023. He says Enterprise Holdings stands out because its customer service initiatives promise to revolutionize the rental car experience with new self-service tools and strategies.
“The initiatives will make waiting in long lines, filling out detailed questionnaires and getting that last-ditch sales pitch to sell that impractical sports car a thing of the past,” he predicts.
The new way? Grab your vehicle and drive off.
To do this, car rental companies have to take a close look at their processes. They need to understand the friction, high-effort steps, and frustrations inherent in their current rental car delivery process. Then they can design a better system.
That’s what 2023 is all about in the car rental industry, says Matulich.
How does Audi on demand work?
Another example of innovation this year is Audi on demand, which offers an app-based rental service. With Audi on demand there are no rental stations or sales partners – just an app that you download onto your smartphone. You can select a car close to your location, available through a network of dealers, for a period of one day to more than a month.
Audi on demand proves how smooth – and painless – a rental can be. With no sales force, there are no awkward sales pitches for insurance, upgrades, and extras. You can quickly override these options on your phone when you don’t need them.
Audi on demand offers three basic models: the SUVs Q5 and Q7 and the A5 Sportback. Some dealers also have an Audi e-tron Sportback EV on offer. Once you have added your payment and contact information to the app, the rental process is seamless. A dealership representative will check your driver’s license and then hand you the keys – done.
The advantages of renting through Audi on demand are significant: you can drive an almost new Audi, which is miles ahead of most rental vehicles. You will also receive personal and attentive service at Audi level.
After you’ve rented from Audi on demand you’ll probably want to buy one, which I think is one of the reasons Audi on demand exists. Once you’ve driven an Audi, it’s difficult to go back to your regular car unless you already drive an Audi.
What is Hertz doing with electric vehicles?
One of the most surprising recent developments has been at Hertz, which has been driving the adoption of electric vehicles.
Stan Caldwell, who teaches transportation and public policy at Carnegie Mellon University’s Heinz College, says it’s one of the standout trends of 2023. In September, Hertz announced it would order up to 175,000 electric vehicles from GM over the next five years. Just days later, it announced a deal with BP to expand the number of charging stations.
“Hertz is not only adding more electric vehicles to its fleet through its five-year deal with GM, but is also entering the charging infrastructure business with BP Pulse,” he says.
Hertz’s ambitions seem clear: it wants travelers to think of Hertz when they think of renting an electric vehicle, and with EV adoption so rapid, it could get that wish.
Steve Birkett, EV Editor at FindTheBestCarPrice.com says car renters are at a turning point in 2023.
“When I was looking for an electric vehicle two years ago, the only options were Turo or boutique Tesla rental companies in big cities like Boston and New York,” he says. “This year, electric cars are much easier to find from established rental companies like Hertz and Enterprise.”
There is also a larger selection. Birkett says he’s seen more models than just the Tesla Model 3. Rental car companies are now offering electric vehicles from Polestar, Nissan and Kia this spring.
“However, there remains an EV premium of 20% to 30% over renting a comparable petrol model,” he adds.
In some cases, the lower cost of charging an electric vehicle could offset the higher rental price. As more all-electric models become available and EV production ramps up, expect more affordable EVs to join rental car fleets over the next few years.
Will you have a better customer experience when renting a car in 2023?
Despite the optimism, the rental industry still has room for improvement, according to Mike Taylor, general manager of travel, hospitality and retail at JD Power.
The industry has shown small but steady gains over the past year and is stagnant when it comes to customer service, he says. “We’re still seeing some staffing issues in JD Power’s data across North America, which is affecting some of the service scores from the major rental car companies,” he says.
But overall, travelers are happier with their cars than they were during the pandemic years. Vehicles are more available, prices are lower and the rental experience is better.
Have you recently rented a car? I would like to get your impressions. How was the customer service? did you pay less Or have you tried one of the new electric vehicles? The comments are open.