The Self-Drive Car Rental Market: What’s The Post-COVID Scenario?
The pandemic and the subsequent lockdowns put a temporary halt to all our travel plans and even brought life to a near standstill. Mobility was one of the foremost aspects that impacted at the outset of the unprecedented COVID-19 pandemic that struck in early 2020. Businesses in the mobility sector were at the forefront of disruption as movement restrictions made them reimagine and actively digitize their operations to adapt to the scenario and thrive in the market.
Now, after a prolonged hiatus induced by the pandemic and its second wave, the economy is gradually beginning to reopen but for the self-drive car rental market, the winds of change are blowing in several aspects. To that end, the million-dollar question now is what is the outlook for the self-drive car rental market in the post-COVID world? Let’s take a look.
Growing demand in the car rental market
With offices resuming operations and state governments easing intra-state movement regulations, local travel has gradually begun to pick up the pace once again. However, consumers are still apprehensive about taking public transport owing to safety concerns, and purchasing a vehicle for mobility is often not feasible, especially amidst the pandemic where several people are experiencing job losses and salary cuts. People are also preferring to travel in smaller groups. Self-drive car rentals have turned out to be the ideal solution for this as it allows them the flexibility and freedom to commute/travel while remaining safe.
Subscription models: An emerging feature with countless takers
Besides, there is also the subscription model that has gained immense traction in recent times, especially over the past year. Self-drive car rental platforms are now witnessing a huge uptick in demand for subscription models, particularly the short-term subscriptions that range anywhere between 1-3 months. During the pre-pandemic time, short-term subscriptions constituted less than 10% of business for self-drive car rental platforms. However, this number has now skyrocketed to 50-60%. Since subscriptions offer customers the liberty and feel of owning a car without having to bear the additional costs such as maintenance, insurance premiums, etc., that come with it, aside from being a safe mode of transportation, it is expected that the subscription model will only further grow in popularity in the post-COVID world.
What’s in store for the future?
By 2022, reports estimate that the car rental industry in India is poised to touch INR 1000 billion, making it a highly lucrative market as more and more consumers shift from purchasing a car to leasing and subscribing to a car. The fundamental reasons for this being the affordability, flexibility, availability, and safety aspects. As players in the self-drive car rental space recalibrate operations and incorporate technology-driven features to offer best-in-class experiences to customers, it’s evident that the landscape is changing. The new car rental ecosystem will indisputably be more convenient, efficient, safer, and quicker with players adapting to changing scenarios thriving in the increasingly competitive market.
