Let’s fix the car rental business



In the second piece, Ron explains,












So, a confusopoly.












  1. Ways, Not Places
  3. KRL, Data and Personal Clouds
  4. Personal Clouds as General Purpose Computers
  5. Personal Clouds Need a Cloud Operating System
  6. The Foundational Role of Identity in Personal Clouds
  7. Data Abstractions for Richer Cloud Experiences
  8. A Programming Model for Personal Clouds
  9. Federating Personal Clouds







How about through new infrastructural approaches, such as the ?









  1. Doc,

    Based on working in the VRM(-isch) space since 2008, the one thing you forget I think is the supplier. The VRM community needs to understand that we need to know their business side deeply, their models, their rev models etc. You NEED to have them on board otherwise it’s not going to fly.
    Reading your post I sense a “we against them” feeling. Be aware …


  2. Thanks, Bart. I just added some text, at and near the end of the piece.

    (And there seems to be a problem with this comment. The latest edit sometimes shows up, sometimes not, on different browsers. Not sure what the deal is with that.)

    I went to the trouble of doing what you say, back in 2006. What I learned was that the industry is very caught between tight walls put up by airports, regulatory bodies (state, local, federal), taxes (governments make more off car rentals than the rental agencies do), and car makers that wish they didn’t have to deal with car rental at all.

    Two interesting findings, back then. One was the prediction that more and more rental cars would be going out with multiple dozens of thousands of miles on them. This has happened, at least in the U.S. Another was that some car companies, notably Honda and Toyota, didn’t want to serve the car rental business at all; but would release a number of cars to that business if they went unsold or unclaimed by dealers. The other was that all cars would become more generic. Back then the generic cars were Chevy Cavaliers and Crysler PT Cruisers. They were, essentially, made for the rental car industry. Today there are fewer of those — much more variety of cars being rented — but yet the cars themselves have a generic sameness to them. The difference between a Chevy, a Kia, a Hyundai, a Dodge and a Ford in a given size class (or even among different classes) seems small.

    That said, I should add that the Chevy Cruze is a far better car than the old Cavalier, or the Cobalt, another common but blah rental car that seemed to be all you’d get back then.

  3. There is a saying that “it’s easy to sound smart about something you and the audience know nothing about.”

    What is the direct and opportunity cost for make a car reservation and not canceling or paying in advance as you would for a plane, train or hotel?

    A rental car is economically a “perishable commodity” that if reserved should yield an amount commensurate with the actual transaction.

    The actual transaction would be priced to the lowest cost if people in fact lived up to their commitment.

    So, Project VRM will in fact fix the car rental business EXACTLY because it will fix the customer booking behavior.

    Good post!

  4. Srinagesh Eranki

    April 17, 2012 at 8:00 pm

    Very insightful post. Two comments:-
    1) VRM shouldn’t be hung-up about representing “Identity” (like in the examples you provide), “Wallet” etc. Let the Facebooks, Googles, Apples & Amazons of the world battle that out. Any proxy should do.
    2) VRM sorely needs a Killer app. Solve a bigger need. As identified by “mistersmith”, a rental car is akin to a “perishable commodity”. The amounts involved & the resulting savings are in the lower-end. A real-world Buyer’s Advocate (e.g. when buying a Car or a House) are the ones that VRM should be disrupting.

  5. For seniors this has made renting a car difficult. Well, more difficult. The average person is confused when renting a car… now add in a person who spends their time on home care or needs an in home nurse to get through the day… how are they going to compare and contrast rentals in this market? When we push away consumer wit5h stuff like this, the elderly fall first.

  6. The term “confusopoly” is definitely spot on. All car rental companies will start losing money if the rates are presented in a clear way (or shall we say quantified sufficiently) for the consumer. Once that choice becomes clear cut, the only company that will survive will be the one that can afford to rent out cars at minimal profits. It’s bad for business obviously. So they come out with lots of promotions/deals with lots of fine print (“Oh, you don’t qualify for that promotion but you do qualify for this other promotion we have that will save just as much money as the other one”). It’s probably the main reason why they have survived all this time.

  7. A very thoughtful article indeed. In fact I would like to add that initially companies used to promote transparency in their prices; but than only the low price succeeded. So, today there are lot of promotions, lot of cross-platform deals, lot of affiliate promotions, etc. to win more customers.


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