What is Telematics for Rental Fleets?
To understand what exactly telematics for rental fleets is, it’s important to first understand the concept of telematics software and solutions.
Telematics software is software, most notably used in vehicles, which allows for the communication between an electronic device and other devices (or human users) over a network. Telematics is a subset of the Internet of Things (IoT) where the ‘things’ are vehicles and their components. Closely related to this, ‘Telematics for Rental Fleets’ is where rental companies use telematics solutions to inform fleet management and business decision-making. Through utilizing telematics, fleet managers can benefit from having greater visibility, transparency and control over their rental fleet.
The Changing Face of the Car Rental Industry
Little over twenty years ago, if a person wanted to use a vehicle without owning it, renting was one of the only options available. Today, the car rental sector has undergone a significant paradigm shift. This transformation has been shaped by evolving consumer expectations, combined with the technological and smartphone revolution. Ride-sharing/ride hailing apps (think Uber), car-sharing (GoCar) and carpooling businesses have now joined the rental industry, which has forced existing companies to innovate and adapt.
These relative newcomers to the market such as Uber and GoCar are not direct competitors to traditional rental companies. Typically these methods of travel are for short-term, on-demand use. However, the phenomenon has disrupted the auto industry’s business model by offering customers an alternative to vehicle ownership.
“It is critical that we are constantly innovating and forging forward-thinking partnerships”
In a recent interview, Avis Budget Group’s International President Keith Rankin earmarked how they have responded to industry disruption. “With the rapid pace of technological advancements, it is critical that we are constantly innovating and forging forward-thinking partnerships that will help us to be a step ahead of competitors. Our partnerships (with AWS amongst others) are just the start of the future of mobility and they demonstrate how industry specialists need to work together to provide the best mobility services for consumers.” It seems that for rental companies, the options are to keep up or get left behind.
The aforementioned paradigm shift means that car rental companies’ function is changing. It’s no longer just about renting cars but providing a mobility solution to allow people to gain control of their time and destination. In essence, they are no longer rental companies but mobility solution providers. Industry projections echo this claim. The mobility as a service (MaaS) market, which generated a revenue of $171.5 billion in 2018, is predicted to grow to $347.6 billion in 2024. Soon car rental and mobility as a service may be synonymous with one another.
Rather than resist the change that is occurring, rental companies need to embrace it. We often hear about the benefits that technology is bringing the consumer but it’s also bringing ample opportunities to providers. Telematics for rental fleets is making fleet management significantly more efficient increasing vehicle utilization and revenue generating opportunities while enhancing operations.
How Telematics for Rental Fleets is Driving Operational Efficiency
Telematics for rental fleets has provided fleet managers with real-time visibility of every vehicle in their fleet. This of course has brought many benefits in terms of control and accessibility. But what is rarely discussed are the benefits this has brought to operational efficiency. Fleet management systems (such as RentalMatics) not only inform fleet managers as to a vehicle’s location but also where they are in relation to gas stations, cleaning bays, garages, body shops and rental locations. This has radically changed the entire return process.
With fleet management software powered by telematics, staff know when a vehicle is approaching the branch for a return. Before the car pulls in staff can access information about the vehicle, the rental agreement and any incidents that might have occurred during the rental period. GPS tracking can determine whether or not a vehicle has recently stopped at a gas station, if not there might be refueling charges due.
Once the renter has left the branch, the turnaround process begins. Before, during busy periods, a car might have been left to sit there and go unnoticed. Now, a monitoring system built into the telematics management solution identifies when a vehicle is sitting idle, when it has passed through the cleaning bay, or has been fully processed and added to the rental system. This not only drives operational efficiency but increases utilization and revenue.
Telematics for Rental Fleets – Providing the Ultimate Problem Solving Tool
Telematics has completely transformed the insurance industry (Global Insurance Telematics Market was valued at USD 1047.17 million in 2016 and is projected to reach USD 5826.52 million by 2025). Insurance premiums based solely on driver profiling (age, gender) had been heavily criticized in the past. Now however, telematics insurance bases premiums on driving behavior, thus solving a key problem of the field.
In a similar way, telematics for rental fleets has become the ultimate problem solving tool for fleet management. Below are just a few areas impacted:
- Theft – The average rental fleet loses thousands a year in theft. Now, GPS tracking can help to locate vehicles that are stolen while out on rental or alert management if a vehicle is unexpectedly removed from a branch.
- Unauthorized movement – GPS tracking, combined with geofence mapping can be used to alert management of vehicle movement out of state borders, country boundaries or restricted areas.
- False insurance claims – All movements are tracked and stored by telematics solutions and g-force metrics are monitored. This level of data collection means that fleet managers can get to the bottom of road accidents and identify false insurance claims.
- Stock anomalies – In the past, stock check was carried out manually and data was stored solely in clunky rental systems. However, with more connected, real-time fleet management solutions, rental companies can spot discrepancies and issues related to the car rental system much quicker and easier.
Embracing Telematics for Rental Fleets to Further Business Growth
It might come as a shock to learn that the automotive industry is the second most data-driven industry in the world. Harnessing data is no longer something that rental companies need to do but have to do in order to compete.
In a recent interview, Bob Barton, previously Snr. VP of Global Franchise Operations for The Hertz Corporation, now President of Global Mobility at RentalMatics gave the following piece of advice for rental companies. “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.”
In other words, car rental companies need to embrace data collection in today’s new mobility market. There are a huge amount of opportunities to better service the changing needs of consumers and drive operation efficiency. The advancement in telematics for rental fleets presents a unique opportunity for rental companies to step up and become dominant players. As the mobility industry continues to evolve, it’s an opportunity that rental companies simply can’t afford to pass up.