The car rental industry has existed for more than a hundred years. Since its inception, the industry has experienced significant changes as it evolves to the car-for-hire business that we know of today. Consumers’ demand for better convenience and experience, fueled with the growth of Internet of Things (IoT), have contributed to the transformed landscape of the car rental industry.
IHS Markit defines connected vehicles as those with embedded, consumer electronics-based, and hybrid connectivity. Embedded connectivity provides wireless communication via a built-in modem; consumer electronics-based connectivity provides wireless communication via connection to the driver’s mobile device; hybrid connectivity is the combination of both embedded and consumer electronics built into a vehicle. In short, a connected vehicle is equipped with internet access that connects the vehicle to its surroundings. IHS Markit’s Connected Car IoT Vertical Market Brief indicated that connected cars will exceed 350 million in 2021—75% higher than the figure in 2018.
IoT in the car rental industry will continue to gain importance in this era of connectivity because of the opportunity to streamline operations, increase revenues, and reduce operating expenses. Global market share leaders of the car rental industry have been investing heavily into connected vehicles. In 2018, Avis Budget Group installed the Unified Telematics Platform (UTP) on 50,000 Avis vehicles to convert those vehicles into connected cars. At the end of 2018, Avis announced that the company will connect an additional 75,000 vehicles after the successful deployment of the first batch and that the company is on track to have its fleet fully connected by 2020. Similarly, Enterprise Holdings hopes to have a fully connected fleet by 2020 and is partnering with General Motors to add 100,000 connected cars in 2019; Europcar Mobility Group had 35,000 connected vehicles as at the end of 2018. It is only a matter of time car rental companies will no longer be competing on the basis of whether their fleet offers connectivity, but rather which fleet offers the best connectivity features and convenience to meet customers’ expectations.