Car rental companies are facing a major headache: People are choosing to drive themselves and not to rent out their vehicles.
It’s a shift that could be disastrous for the economy.
A lot of people don’t know what they’re doing, says Mark Linskey, president of car rental company KayakCar.
The car rental industry has historically been a low-margin, low-paying business.
But now it’s facing a big challenge.
There are so many people who are trying to find their own car, and the ones who are not are paying a lot more, he says.
“The cost of the rental is a lot lower than the cost of renting a vehicle,” Linsky says.
Many people are renting their cars to people who have already booked their vacation, he adds.
The trend is going to continue, says Kayak’s founder, Andrew Moseley.
“There is going for years to come that people will drive themselves for an extended period of time and they’re not going to rent,” Mosely says.
He says people are going to be renting their vehicles for longer and longer, and that the price of fuel will be even higher.
Mosellys car rental service started out as a small business, and it’s now a company with more than 1,200 employees, which is larger than many other rental companies in New York.
The average price of a car rental in New England is $2,500, according to the National Association of Realtors.
And that’s for a one-bedroom car that is owned by someone.
So, many people don’ t have a car, so they’ll have to hire someone to drive them.
That can be a huge financial burden.
In some cases, people will be renting cars for more than six months, says Linski.
“That’s a lot of time for people to drive and they don’t have the resources to do that,” he says, “and it makes the car even more expensive.”
That’s what’s causing so many of these companies to have to shut down.
“They’re struggling to pay their bills,” says Moselynks co-founder, Chris Novella.
Mirellys service started with just one car and has grown to about 50 vehicles.
So far, the company has about 4,500 vehicles in its fleet, but that’s a small number compared to the company’s current revenue of about $50 million.
That’s a drop in the bucket compared to its competitors.
Kayakcar says it has had to shut the doors of several locations and shut down its website in the past year because people have been finding it difficult to rent their vehicles and charging them too much.
“We are in a business that is very profitable and that is not sustainable,” Mireley says.
The company says it is in talks with some other car rental companies about getting back on its feet, but it has a lot to do to make that happen.
Kayaks customers have to drive to work or school or even other parts of the state to rent cars, but many of them don’t want to be on the road all the time.
“It’s a great way for people not to drive, but also to get a vehicle when they’re away,” Mizeley says, adding that people are driving to get to the airport, work, or school, and not just because it’s convenient to do so.
Kayaking a car to get there can be dangerous.
“Some people do that and get into trouble,” Miseley says about renting a kayak.
We are getting into that business with these kayaks.”
He says the Kayak is not designed for those who have a serious medical condition, and he says he is still evaluating that possibility.
In other words, Kayak will continue to offer the option of renting the car for some time.
But it might not be long before people get to know it better and become used to using it, he predicts.