The Avis Budget Group is using Internet of Things technologies to create better and more differentiated customer experiences. With the emergence of the sharing economy as a major force in the car industry, the rental giant, rather than shunning them, has embraced the new technologies whole-heartedly. The Avis Budget Group is proving that IoT technologies can be used to create real value for the customer and drive innovation at the same time.
The three emerging pillars of the rental car industry
Perhaps no industry on Earth is being more quickly upended by the advent of Internet of Things technologies than the rental car industry. The emergence of the gig economy, with its ride-sharing services, like Uber and Lyft, as well as the quickly developing technologies involved in self-driving vehicles, are conspiring to radically shift the foundations on which the rental car industry lies.
But there is another area in which the industry sees a huge opportunity for growth and differentiation. That’s in the area of ultra-short-term rentals. ZipCar, a startup controlled by the Avis Budget Group, is providing car rentals for as short as one hour. This is an industry that simply could not have existed even ten years ago. With advanced internet booking systems and sophisticated fleet management, ZipCar is able to provide short-term rentals at prices that are competitive with traditional car rental companies.
The Avis Budget Group has also made a foray into the car-sharing economy, which, like AirBnb does with homes, allows car owners to rent out their automobiles to rental customers. What’s perhaps most surprising about all of this is that the Chief Innovations Officer for Avis, Arthur Oduna, says that the company is able to differentiate all of these products, with the separate markets complimenting each other, rather than cannibalizing each other.
Orduna also sees the Internet of Things playing a major role in enhancing the customer experience, in years to come. The Avis Budget Group is currently investing heavily in self-driving car technology. This innovation is largely made possible by robust connections to the networks, such as GPS, and the ability of mind-bendingly complex artificial intelligence algorithms to replace all of the complicated tasks that a driver would normally perform. Orduna says that the company will likely have a significant percentage of its fleet as self-driving cars within the next decade. On the high end, he says that it is fully possible that by the year 2025, the majority of car rentals in the United States will be of 100 percent autonomous vehicles.
This revolution in autonomous driving will give rise to dramatic increases in the productivity of workers while commuting. Orduna says that a major component of his company’s business is other businesses using Avis’ services. The advent of self-driving cars means that Avis will be looking to pack its vehicles full of productivity-enhancing tools. While Orduna is coy about what this could mean, in concrete terms, he believes that rental cars of the future will be marketed and appointed in much the same way as business-class flights are today.