Page 6 - Fortune-November 01, 2018

R E I N VE NTI N G TH E R E NT AL CAR
When cars get impounded because of parking
violations, renters often walk away, leaving
the agencies to deal with the consequences—
including figuring out where the car has been
towed. Avis won’t say how much revenue it
loses to this scenario. But it’s a big enough
problem that the company has set up geofenc-
ing around more than 160 of the country’s
biggest impound lots, so it doesn’t have to
wait for pound workers to call the company.
That move, combined with internal location
tracking, has cut the average recovery time for
an impounded car by half, to six days. (In a
similar if more upscale vein, location tracking
helps Avis more quickly retrieve rentals that
have been dropped off early at airports that
serve the private-jet crowd.)
Connected cars could also allow Avis to
widen its customer base, by putting its cars
closer to more drivers. The company hopes to
become less reliant on airport locations, where
it currently gets 70% of its revenue. Avis is
talking with retailers, mall developers, and city
planners about creating self-service, counter-
free hubs where people could pick up and
GOTTA TRY HARDER
The Avis Budget Group has the smallest market share among the self-driving cars’ day is near: Boston Consult-
“Big Three” in the U.S. rental-car industry.
CAR RENTAL COMPANIES MARKET SHARE
ENTERPRISE HOLDINGS HERTZ CORP. AVIS BUDGET GROUP
ENTERPRISE HERTZ
43.9% 14.7%
THRIFTY 1.9% DOLLAR 3% makers, Avis is servicing Waymo’s self-driving
AVIS OTHER *
10% 6.3%
NATIONAL ALAMO
7.7% 7%
BUDGET
5.5%
*OTHERS INCLUDE PAYLESS, AN AVIS SUBSIDIARY WITH VERY SMALL MARKET SHARE SOURCE: EUROMONITOR companies of the future. (This, too, will be a
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FO R T U N E. CO M // N O V. 1 . 1 8
drop off a car, much as they do with Zipcar.
“Anywhere I can park five to 10 cars, I can call
it a rental location,” says De Shon, the CEO.
Avis has begun testing that model in the
Kansas City, Mo., area, where all of its roughly
5,000 cars are connected. Avis is sharing live
car-location data to help city planners refine
their computerized traffic flow models, the
better to determine which roads are used
most frequently and to plan repairs more ef-
ficiently. In return, Avis stands to get some-
thing any city dweller can appreciate: a bunch
of dedicated parking spots.
F YOU RENT A CAR from some Avis loca-
tions in the Phoenix area for three days
I or more, you’ll soon get an extra perk: a
coupon for a ride in a driverless Waymo.
Your Jetsons moment, should you choose
to accept it, will be part of an experiment with
high stakes for Avis and its rivals.
Avis’s shares shot up 21% on the day it
announced its Waymo partnership last year.
Enterprise and Hertz have been exploring the
same terrain, but Avis’s deal with Waymo is
the splashiest so far, and Waymo, in turn, is
further along in its development than many
competitors. While autonomous vehicle
(AV) makers have numerous regulatory and
technological hurdles to clear, few doubt
ing Group estimates that by 2030, 25% of
miles driven on U.S. roads could be logged by
shared, self-driving electric cars.
For a shared-car business model to work,
however, these robo-taxis will need to be on
the road practically around the clock, which
means they’ll need to be serviced and cleaned
far more regularly than typical cars. That’s
where the Avis-Waymo deal comes in. In
Phoenix, a testing-ground for many AV-
Chrysler Pacifica minivans, a fleet of 600
cars and counting. Avis handles tasks like oil
changes, tire rotations, and cleaning; Waymo
maintains the more high-tech AV hardware.
Avis is betting that its huge infrastructure
of garages and storage facilities will make
it an essential partner to provide such “fleet
management services” for the car-sharing
GRAPHIC BY NICOLAS RAPP