What Are the Prospects for the Car Sharing and Car Rental Market?
In recent years, the car rental market has been growing by 25-30% a year. At the same time, the main growth is due to regional cities. A comparative analysis of the number of search queries on the topic “car rental” demonstrates a higher growth rate of demand in regional cities around the world.
However, market participants do not see the growth of demand in the city, but on the contrary, talk about its stagnation. Until 2020, the market showed good growth, but over the past year and a half or two years, there is no decline, but there is no growth either. It just stands still. However, given the development of the coronavirus pandemic, perhaps this development just can not cope with the overall global trend. Also, the growth in demand may not be fully felt because competition is increasing. Many new small companies and individuals are appearing who are turning in their cars.
One of the important trends in the car rental market of Dubai, its participants point out the decrease in profitability. This is associated with an increase in costs: cost of insurance, car maintenance, and cars themselves. At the same time the prices of rental cars in the UAE, according to experts, have increased over the past 2-3 years by about 10%. But the prices for luxury cars and supercars, on the contrary, become more accessible, that’s why tourists are interested in Ferrari hire Dubai.
In this market, capacity is determined by the number of people aged 21 years and above, with a driving experience of two years. While the capacity of the market of traditional car rental (daily rent) – people aged 27 years old with the driving experience of 3 years (in some companies the age of 28 years and 2 years of experience). Narrowing the potential market, car rental companies are trying to reduce the risks associated with the inexperience of customers and lead to frequent major and minor accidents and, as a result, costs.
It is also worth noting that the market is not standing still, and experienced customers are coming in. Gradual growth of popularity of the service, the first experience of using a rental car in Europe, the age qualification on the part of car renting companies leads to the fact that the car rental customers are modern socially and economically active citizens of a metropolis who know all car rental tips. Moreover, they need to solve the problem of mobility quickly and without extra trouble and expense. As a consequence, there is a decrease in the number of thefts.
Factors of development of car rental market
There are several factors stimulating the active development of car rental car sharing in cities with millions of people:
- The growth of smartphones, as these gadgets are the main tool for ordering and managing the service – a mobile application. Also, the spread of quality mobile Internet should meet the needs of users.
- The spread of bank cards and the widespread use of online payments. Already today, a large number of people do not use traditional paper money, which limits the growth of online transactions.
- Low cost (compared to cabs) and comfortable ride conditions (compared to public transport). The quality of new services obviously does not standstill. It is unlikely that traditional taxis or public transport will be able to offer revolutionary solutions in the next 10 years.
Conclusion: What is the future of car rental?
When people have even more smartphones and are more computerized in 7-8 years, then this service will become much more developed and everyone will rent cars in Dubai, instead of buying. And, in that way, the traditional rental will be meaningless. In the meantime, there will be a steady but slow development of the car sharing segment.
In small towns, the prospects for hourly rentals are not bright, and the future is in the per-minute rentals. And we are creating that future right now. This is a trend that will become commonplace for residents of large cities in the next two or three years. Now it already seems like the past century to catch a cab by hand or to call a dispatcher’s office. This is why the widespread development of car sharing is not far off, not only for megacities but for all cities with a population of millions.