Traditional car rental firms will have to invest in the experience if they are to excite younger generations about the sector as new forms of car sharing business models become popular.
Speaking at this week’s Travel Distribution Summit Europe, James Mueller, senior vice president sales and revenue management, said he was relaxed about the impact to date of car sharing and peer-to-peer rivals.
But he admitted that the car rental industry in general had to meet the challenge of driving loyalty among a new generation of millennial customers.“The thing I hear from customers a lot is my dad is a very loyal customer of Hertz, and I always think why are you not a loyal customer of Hertz,” he said.
Mueller conceded that there is a sense that young people today do not value the car rental experience. And he said: “Part of the reason for that is car rental companies have not delivered a great experience. We have to accept some responsibility. But the story has yet to play out.”
Mueller said firms like Hertz must question all the ways things have been done in the past that have made the car rental experience frustrating for customers.
He said the rise of firms in the ground transportation space like Uber has set new standards for what customers expect in terms of a simple and convenient experience.
“Does Hertz match that standard? Well no, but we will,” said Mueller. “It’s all about executing our business in a much smarter way.”Areas in which Hertz sees room for improvement are in the drop off and pick up phase of a car rental.
Mueller said today signing the car out, adding ancillary products, and handing over the keys do not have to be done face to face, or even at dedicated pick up spot.
“There are a lot of legacy components, all of which have their justification in history, but in three years’ time it’s all going to be different,” he said.
Despite not being overly concerned about the impact of new mobility models like BlaBlaCar, Hertz is keeping a watching brief, and feels they’re rise may actually increase car rental.
Mueller said Hertz is conscious of what it is good at and that it is in discussions with new entrants and potential disruptors.One example is a deal with Lift, a rival to Uber, to allow their drivers to use Hertz vehicles.
Mueller said car rental firms like Hertz will invest in driving up direct business, but that good partners and third parties will always also play a vital role.
He said the issue of price parity was not concerning as long as Hertz can control the price that consumers see.
The “huge opportunity” for the car rental sector, added Mueller, is to be a lot more transparent about the product and the experience the customer can expect.
“There is a huge opportunity to deliver a better customer experience.
“For example you step off a flight and we send you a notification which says here’s your car, here’s what it looks like and here’s two others if you want to switch.
“We need to do it much smarter for every customer every time.”