While rental providers have the perception that they stand to lose market share to the proliferation of car subscription, it's more accurate to say they are the best positioned to take advantage of this fundamental shift toward flexible mobility and gain market share into new customer segments.

Advantages for Existing Rental Providers

Car rental companies have existing infrastructure and expertise in vehicle maintenance and management, which can be leveraged to support car subscription services. Additionally, rental providers have existing relationships with consumers and corporate customers, which can be leveraged to cross-sell subscription services.

Moreover, car rental providers are well-positioned to offer flexible and convenient options for consumers who may not want to commit to long-term vehicle ownership or who may need a vehicle for shorter periods of time. By offering subscription services, rental providers can offer a more convenient and cost-effective alternative to traditional car ownership and rental models.

It's important to note that there are some differences between car rental and car subscription services, and rental providers will need to adapt their offerings accordingly. For example, car subscription services typically offer a wider range of vehicles and more flexible pricing options than traditional rental models, which may require rental providers to reevaluate their existing business models and pricing strategies.

However, managing a car subscription service does require a higher level of technical expertise compared to traditional car rental or ownership models. Subscription providers need to be able to manage the additional customer touchpoints that come with a subscription service, such as handling customer inquiries and requests, managing subscription changes and cancellations, and providing a seamless digital experience for customers.

In addition, billing and payment management is more complex in a subscription model than in traditional rental or ownership models. Subscription providers need to be able to handle recurring payments, manage subscription changes, and accurately track usage and billing.

Improving Technical Capabilities

It's fast becoming apparent that incumbent rental software is not up to the task of running a modern car subscription service, as the demands of the two services are quite different. Car subscription services require a higher level of technical expertise to manage the additional customer touchpoints, billing complexity, and digital-first approach that has become expected of subscription providers.

Rental software is typically designed to manage short-term rentals, where the focus is on vehicle availability and rental duration. In contrast, car subscription services require more advanced software to manage flexible and longer-term subscription duration, including vehicle swaps, maintenance, dynamic recurring billing and customer self-service.

To run a successful car subscription service, rental providers may need to invest in new software systems or partner with third-party providers who specialize in car subscription services. By doing so, rental providers can offer a more seamless and integrated experience for their customers and compete more effectively with pure subscription providers.

In summary, while incumbent rental software may not be up to the task of running a modern car subscription service, rental providers can adapt by investing in new software systems or partnering with third-party providers to offer a more advanced and integrated experience for their customers.