Rental Car Biz Is Long Way From Gone, Says Avis CEO

In order to convince Wall Street that the car rental industry is still relevant, a change to its old “try harder” advertising slogan night be necessary for Avis Budget Group.

There is a rising question among investors about car rental because of the rise of cab hailing services. There is therefore a notion that car rentals are not needed because one can just use the smartphone to book an Uber or Lyft

This year there has been a 25% fall of Avis and its fitting CAR. And there has been a 35% drop in shares of rival Hertz in 2018 so far.

But Avis CEO Larry De Shon believes that it is an overreaction. It would not be soon that car rental companies would be going away, he said in a television interview. In fact, Avis is being a lifted by many of the same trends that are driving Uber and Lyft in big cities.

Possessing a second car is not a good option for many in the urban areas, says De Shon. Such people can well do with one car even if it is small one instead of a large SUV.

But what would his solution when the same individual would plan a trip out of town for a beach trip or a camping in the woods is what De Shon asks.

“If you have a long weekend when you want to get away, you have to rent a car,” De Shon said. “Our average rental is four days and 450 miles. That’s not an Uber experience.”

Quick one-day excursion is not the reason people are hiring his cars, says De Shon. Only 3% of the total rental business at Avis is accounted for by these forms of short-term trips.

“Our clients use our cars. It’s the sales person on the road going from one city to next or the leisure customer with children, car seats and lots of luggage,” De Shon said.

And yet, some foray in to the ride hailing segment has been made by Avis. In 2012, the company acquired Zipcar – a firm that lets people to rent a car for as little as one hour.

Zipcar is now available in more than 500 universities and as well as in several international markets, De Shon said.

Some adaptation has also been made in the offerings of Zipcar. The company now allows renters to drop off cars at a different location if they find it convenient in addition to such cars being allowed to be picked up and returned to the same spot where they had bene picked up from.

“We have been working hard on modernizing our business,” De Shon said.

Customers can also make use of the Avis app to quickly check on the options available and choose a car fast. This will help Avis avoid long queues of people who have just landed after a long flight and are looking for their rented car at the airport.

Avis now also allows its cars to be booked via Amazon’s voice assistant Alexa.

De Shon said all that leads to happier customers.

“We’re focusing on product offerings that are relevant to today’s consumer and makes the rental process more simple,” De Shon said. He added that Avis asked customers for suggestions on how to best design the Avis app — and that customer satisfaction is higher than when reservations are done through the app.

(Adapted from


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