Technology changes the car rental business

Typically, traditional businesses transform with a change in consumer behavior. The most common catalyst for this in our days are technologies and their availability and price. See how much a mobile phone or a minute of call cost now and 20 years ago? How the use of cars and their prices will change with technology advancement? Let's see how much it costs to start a car sharing business now and 10 years ago:

According to the market experts, the car sharing revenue per unit (RPU) is three times higher compared to the income of traditional car rentals. 

Thus, for fleet managers, technology provides an opportunity to not only increase revenue but also reduce costs.

Car sharing RPU is higher not only in terms of simple math, because more than one person uses a car in 24 hours by paying a higher average per-minute price than traditional car rental, but the key moment here is the customer structure. Car sharing customers are locals who use the car every day of the year (on demand), meanwhile, the traditional car rental business relies on tourists, i.e. seasonality, that kills.

RPU should be calculated by splitting the yearly (or monthly) income to your car fleet. The RPU of the  80% utilization fleet (car rentals) is about US$1000 per month, while in car sharing such RPU can be achieved merely with half the vehicle fleet, due to more uniform occupancy, i.e. absence of big gaps between seasons and price fluctuations.

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