Thinking about the future of car rentals is the same as thinking about the involvement of taxi business to Uber. Technology rocks and changes stagnating business models, and they will never be the same as before. After the advent of Uber to the taxi market, calling taxi by phone or paying in cash is no longer status quo.

But I would like to take a broader look at the entire private transport system, and how rental companies will look like in this picture. Let’s divide it into two categories: “I drive myself”, and “the driver drives”. The latter innovations were suggested by Uber and, I think, I have nothing to say about it. But how the category “I drive myself” will transform?

Certainly, “I drive myself” will turn into driveless, i.e. the categories will be merged again – Uber will lose drivers and only driveless cars will remain. Therefore, prospects are quite clear. It is difficult to forecast when this becomes a reality – due to state regulation and trust in technologies, because it affects personal security and other sensitive issues.

Thus, you already can start using the acronym of Car-as-a-Service (CaaS).

The only unanswered question remains – who will own the cars? 

Currently, cars are delivered from the manufacturer to the dealer and/or the lease company, then to car rental companies, or directly to consumers. The feeling of ownership, based on security, social status and driving enjoyment, is the driving force that maintains the current situation when cars are owned by the end user.

With a growing number of CaaS solutions, fearing that you no longer have a car at your home, when you need it most, or urge of boasting with own BMW, will be eliminated. When you can go to university in Toyota Prius, and to a party in BMW, owning Ford no longer makes sense. Therefore, if we use a car as a service, and only pay for consumption, the property will have to be transformed back of the pipeline to manufacturer. Who will manage the future car fleets? Will manufacturers replace the current sales model to CaaS and cars will be simply used, or maybe manufacturers will continue selling cars to dealers which, in turn, will offer CaaS services? Or maybe rental companies will occupy these positions because you not only have to service the car but also know your client.

The Car-as-a-Service category will gradually replace the Rent-a-Car business model (as Uber is reshaping the perception of taxi services).

Rental counters will extinct in the same way as calling taxi by phone, or paper contracts. 

Cash payments and deposits will become equivalent to the current Uber: I arrive, get out of the car and leave it under any tree I want.

Transformation towards full CaaS mainstream, I think, will occur through car-on-demand (car rental companies will offer rent-per-mileage or per-hour, rather than per-day, like, for instance, Zipcar) and car sharing (where people share cars, for instance, through Getaround).

Certainly, electric cars will be important as well, along with charging infrastructure and government support in this field. Yet, one thing is inevitable: if you no longer need to drive yourself and can use a different car every day, the sense of ownership transforms and ownership will become a thing of the past as the Internet modem, – after all, we do not buy it, we buy Internet services.

If you kept reading to this point, I offer you to listen at this year’s International Car Rental Show, Bandango’s Sharky Laguana and Gotham Dream Car’s Noah Lehmann-Haupt “The Debate on the Future of Car Rental” on April 19, 2016 at 3:00pm. Las Vegas.

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