In August, RentalMatics announced the appointment of industry veteran, Bob Barton, as President of Global Mobility. Bob has over 30 years’ experience in the automotive industry, most recently as Snr. VP of Global Franchise Operations for The Hertz Corporation with responsibilities for 130 countries and 500 franchises. He is a past President of the American Car Rental Association and the 2009 recipient of the Russell Bruno Award.
We sat down with Bob to get his take on the future of the mobility industry. We discussed key trends, his opinions on the latest advancements in automotive technology, his advice for rental companies, and the reason why he’s optimistic for the future of the industry.
Q/ How do you think technology is impacting the mobility space?
Technology is changing the mobility space in ways we couldn’t have imagined. It is transforming the sector completely and I think the main driver is people’s level of comfort with how technology works. People are trusting companies with their data and managing things for them more and more. Because of this, technology is moving things forward at a rapid rate.
The best way to explain this is to look at the evolution over the last number of decades. I’m a child of the 60s. When I was growing up, I would leave the house and all my mother would say is “be back before dark”. By the time I was raising my kids in the 80s, this had changed completely. We had gotten to a point where you weren’t allowed to talk to strangers or go out on your own. As parents, we wouldn’t let children out of our sight.
Nowadays, everyone is more comfortable with technology. Teenagers don’t know life without smartphones or the internet and it’s almost gone full circle. Now, we have the likes of Uber, where we are comfortable with taking rides from strangers and giving people our money, simply because the data says that this person is trustworthy. As the years go by and the level of exposure increases, we are going to get even more comfortable. It will be interesting to see how far the mobility space progresses in the years to come.
Q/ You have a huge experience in car rental industry. What are the key trends impacting the industry’s future?
I believe there is going to be a major shift in how people view car ownership. We are moving into a world where car ownership will dissolve and rental will become known as ‘transportation as a service’.
Fundamentally, this is a function of demographic. Firstly in Europe, where we’ll use Germany as a perfect example. The transportation system is at such a level that you could use public transport 90% of the time and have limited need for a car of your own.
In America, we aren’t exactly built for this. There are densely populated cities and very sparsely populated rural areas. This is combined with the typical lifecycle of a young person who might grow up in the countryside, move to the city to advance their careers and then settle down in the suburbs to raise a family. In the city, there’s lots of traffic and over-congestion. It is almost pointless to own a car there. Peer-to-peer businesses, car-sharing and ride-sharing make much more sense and will continue to flourish. In the suburbs, it’s hard to predict what will happen. Car-ownership will either go down or else the age at which people buy their first car is going to go up, meaning people will own less cars in their lifetime.
Q/ What role do autonomous vehicles or electric cars have to play?
For electric vehicles, I might refer to a point made by the late Sergio Marchionne of Chryster. Yes, from the time of purchase to the end of use, electric cars make a far less damaging impact on the environment. However, you have to take in everything from producing these vehicles to disposing of the batteries. When you consider all that, electric cars are actually worse for the environment. On top of that, they still haven’t figured out how to create a vehicle with an acceptable range and rapid enough charge. Right now, especially in rural areas, the mileage per charge isn’t sufficient.
As for autonomous vehicles, what I’ll say is that the issue isn’t with the vehicles or the technology. It is with the laws surrounding them. For autonomous vehicles to work there needs to be legal reform before these vehicles take hold. Because these vehicles run on programs and algorithms, it’s very hard to pin the blame on someone when an incident occurs. Is it the person in the car, the manufacturer or the engineer who’s at fault if a fatal impact occurs? It’s a complex area. Right now, the advancement in technology is so far ahead of the legislative procedures and the laws that regulate them.
I think we are some way off both of these technologies being mainstream just yet.
Q/ What do you see as the main fears for rental companies?
I think the challenge right now is data. And the million dollar question is “Who owns the data?”. When I think about the current mobility space, I’m reminded of the 1960s in America, which was the ‘era of the muscle car’. Of course, the big racing series in America was, and still is, NASCAR. Back then, the big question was, “Who owns the NASCAR, was it Dodge, Plymouth, Ford, or Chevrolet?”. That was because NASCAR was a function of the vehicles, the drivers and their speed. NASCAR was only as good as the vehicles in the race, so the question was, “Who really owns it?”.
Now, the question in today’s environment is “Who owns the data?”. I think the manufacturers have very strong opinions on this. They think that because their vehicles created the data, they should own the data. Privacy laws, like GDPR, say that it’s the individual that owns the data. Then rental leasing companies say that because they own the vehicles, they own data. I think that this “battleground” strikes fear into a lot of rental companies.
Q/ For RentalMatics customers, do you have an answer for the questions of “Who owns the data”?
Simply, RentalMatics do not own the data. The rental companies that use RentalMatics own the data.
They own the data because they are putting disclaimers on rental agreements and clearly communicating to customers that their vehicles are using telematics. By signing disclaimers, the customer is consenting to the collection of that data.
Q/ What opportunities do you see stemming from this collection of data?
Let me start by showing a quick evolution of how data was used in the past. In the 1980s there was a famous lawsuit where a rental car company was sued for charging higher rates to a person because of their postal code. The case was won because it was classified as being “prejudicial”. At the opposite extreme, insurance companies have long been charging higher premiums if you live in say Manhattan compared to Westchester County because one is in a more congested, high traffic area.
In reality, we are at a point where insurance companies are placing telematics inside in cars and charging based on performance. This evolution is opening doors everywhere. I really think we are moving towards an environment where, for example, leasing or trucking companies will use data to see who are the best drivers, and reward their drivers accordingly.
I think data is going to afford people better discount structures and better lines of communication with insurance companies. It will also be a phenomenal tool in terms of claims management. Whereas in the past, an impact wouldn’t come to light until after an insurance company had time to process the incident. This could be nine months down the line. Now, with telematics, you see incidents in real time (3 seconds later) and can get to work on managing claims immediately.
Q/ What makes you most optimistic about the future of the industry?
It is the longevity of the industry that I’m most optimistic about.
The car rental industry is never going to go away. No matter how big companies such as Uber or Lyft get, the rental industry will always be there and will probably keep growing as owning cars ceases to be the norm. Yes, the industry will morph and change over time but so will every other industry.
I think what is most important is that car rental companies embrace the technologies at their disposal. If the last few years are anything to go by, I have reason to believe that they’ll do so and push even further ahead.
Q/ What advice would you give to companies that are trying to adapt to an ever-changing industry?
The number one thing that every car rental company needs to look at is the quality, the quantity and the speed at which they are getting data and improving their technology.
We’d like to thank Bob Barton for sharing his opinions on an industry that is going through a major period of disruption. As Bob mentioned in the last question, the onus is on rental companies to embrace technology. Telematics and fleet management software is one way of doing this.
Learn more about embracing Telematics Software, by checking out this blog post.