As a frequent traveler, Chandra Gore has noticed some surprising changes when she rents a car.
There’s a better selection of vehicles, for starters.
“When I rent at the airport, I get more options even after selecting a class of the car,” says Gore, a communications consultant from Stafford, Virginia. “I’ve even been offered electric and luxury cars as upgrade options.”
And one more thing she doesn’t hear anymore: “We’re out of cars.”
So far, there have been plenty of vehicles.
The car rental industry has bounced back from a pandemic-induced shortage, which drove rates up to historic levels. Customers are noticing. There are new ways to rent cars, there’s new technology — and, of course, prices have returned to earth in many cities.
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What’s new for rental cars in 2023?
Everything is new in the car rental industry this year.
- New technology. Car rental companies are testing and implementing new technology. For example, Enterprise Holdings has launched a company-wide initiative to improve the customer experience. First up was a redesign of the National mobile app that allows a one-click reservation and gives users a streamlined reservation experience.
- New options. One of the standouts is Audi on demand (formerly Silvercar), which in late 2022 expanded and added new long-term rental options. The app-based service leverages a network of Audi dealers in the United States to give customers more options, including the ability to rent a new Audi for several weeks or even months.
- New electric vehicles. Hertz has taken the lead on EVs with several ambitious orders for Teslas in Europe and the United States. Hertz estimates EVs will soon comprise more than 20 percent of its global fleet. The new EVs will be supported by a combination of Level 2 and DC fast charging in more than 100 markets by the end of 2023, according to the company.
Renting a car is more popular than ever, if the number of web searches is any indication. In the last year, internet searches for “where to book cheap car rentals” went up by 2,850%, according to Semrush.
But what does all of this mean?
Car rental companies are competing against their “most recent and best” customer experience
There’s a massive shift underway in the car rental industry, says Mario Matulich, president of Customer Management Practice.
“Car rental companies are no longer competing with other car rental companies when it comes to customer experience,” he says. “They are competing against the most recent and best customer experience.”
Matulich says while many car rental brands are still following the same playbook, others have evolved in 2023. He says Enterprise Holdings is a standout because its customer service initiatives promise to disrupt the car rental experience with new self-service tools and strategy.
“The initiatives will make waiting in long lines, completing detailed questionnaires, and receiving that last-ditch sales pitch to upsell that impractical sports car a thing of the past,” he predicts.
The new way? Grab your vehicle and go.
To do this, car rental companies have to take a hard look at their processes. They need to understand the friction points, high-effort steps, and frustrations inherent in their current rental car delivery process. Then they can design a better system.
That’s what 2023 is all about in the car rental industry, says Matulich.
How does Audi on demand work?
Another example of innovation this year is Audi on demand, which offers an app-based rental service. There are no rental locations or sales associates with Audi on demand — just an app that you download to your smartphone. You can select a car near your location, available through a network of dealerships, for anywhere from a day to more than a month.
Audi on demand proves how frictionless — and painless — a rental can be. Because there are no sales associates, there’s no uncomfortable sales pitch for insurance, upgrades and extras. You can quickly swipe past those options on your phone if you don’t need them.
Audi on demand offers three basic models: the Q5 and Q7 SUVs and the A5 Sportback. Some dealerships also have an Audi e-tron Sportback EV available. Once you add your payment and contact information to the app, the rental process is seamless. A dealership representative checks your driver’s license and then hands you the keys — and that’s it.
The benefits of renting through Audi on demand are significant: You can drive an almost-new Audi, which is a cut above most rental vehicles. And you also receive Audi-level service, which is personalized and attentive.
After you rent from Audi on demand, you will probably want to buy one, which I suppose is one of the reasons Audi on demand exists. Once you’ve driven an Audi, it’s hard to go back to your regular car, unless you already drive an Audi.
What is Hertz doing with electric vehicles?
One of the most surprising recent developments has been with Hertz, which has charged forward with EV adoption.
Stan Caldwell, who teaches transportation and public policy at Carnegie Mellon University’s Heinz College, says it’s one of the standout trends of 2023. In September, Hertz announced it would order up to 175,000 EVs from GM over the next five years. Just a few days later, it announced a deal with BP to expand the number of charging stations.
“Hertz is not only incorporating more EVs into their fleet through its five-year deal with GM, but also getting into the charging infrastructure business with BP Pulse,” he says.
Hertz’s ambitions seem clear: It wants travelers to think of Hertz when they think of renting an EV, and with such speedy EV adoption, it may get its wish.
Steve Birkett, the EV editor at FindTheBestCarPrice.com, says car renters are at an inflection point in 2023.
“Two years ago, when I looked to rent an EV, the only option would be Turo or boutique Tesla rental firms in large cities like Boston and New York,” he says. “This year, electric cars are much easier to find from established rental companies like Hertz and Enterprise.”
There’s a greater choice, too. Birkett says he’s seen more models than just the Tesla Model 3. Car rental companies now offer Polestar, Nissan, and Kia EVs for this spring.
“However, there remains an EV premium of 20% to 30% over renting a comparable gasoline model,” he adds.
In some cases, the lower cost of charging an EV could offset the higher rental rate. As more all-electric models hit the market and EV production ramps up, expect to see more affordable EVs added to car rental fleets over the next few years.
Will you have a better customer experience when you rent a car in 2023?
Despite the optimism, the car rental industry still has room for improvement, according to Mike Taylor, managing director for travel, hospitality and retail at JD Power.
The industry has shown small but steady gains over the past year and is plateauing when it comes to customer service, he says. “We still see some staffing issues in the JD Power data across North America, which is affecting some of the service scores across the major rental car companies,” he says.
But overall, travelers are happier with their cars than they’ve been during the pandemic years. The vehicles are more available, rates are lower, and the rental experience is better.
Have you rented a car recently? I’d love to get your impressions. How was the customer service? Did you pay less? Or did you try one of the new EVs? The comments are open.