Car rental companies are quickly losing customers to rideshare services, according to a new report from digital marketing firm Epsilon-Conversant.
In an analysis of $140 billion of travel transactions over the past two years, 63% of previous car rental customers reduced their spending on car rentals—almost a $3.2 billion loss. Moreover, 56% stopped using car rental services altogether, with most of these customers moving to rideshare services.
These services, including Lyft and Uber, made up just 2% of all travel spending (which included hotels, airfare, cruise lines, casinos, travel services, rideshares, and car rentals). This small portion covered 30% of all transactions analyzed, however, meaning these services are low-cost but frequently used.
Car rentals, meanwhile, are retaining a loyal demographic of older individuals, says Epsilon-Conversant‘s report, leaving room for these companies to capture market share presented by younger travelers.
Uber is a decade old now, and top car rental companies have started to make changes to remain competitive: Avis is moving to implement technology into the rental process, easing the exhausting lines outside airports. Hertz offers car rentals to Uber and Lyft drivers directly, hoping to lure drivers with savings on car maintenance, additional insurance, and mileage. Enterprise, meanwhile, offers a vanpooling service to lessen the carbon footprint of commuters.
While 9.8 million consumers use car rentals but don’t use rideshare services, the report says, there’s still 9.4 million more who use rideshare services but spend nothing on car rentals, meaning there’s still a long way for these companies to go.