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Over the years, there have been several factors affecting the rental car industry resulting in constant fluctuations in rental car prices. In the recent past, with the economy being hit worldwide due to the pandemic, the rental car industry suffered from no income or sales since travel came to standstill overnight.
Towards the end of the year 2021, with most of the world population being fully vaccinated, travel restrictions in many countries have eased out and borders are now open for tourism. Due to this, fortunately car rental companies are picking up from where they left. However, the fight to keep up their lot size against the demand is still an ongoing problem.
In addition to these hurdles the rental car industry is facing, yet another hitch is the recent hike in gas prices! Canadian gas prices reach “record territory” as the average price of a litre reaches an all-time high. Experts and analysts warn that Canadians might continue to see the steep rise in gas prices continue as the cause for this crisis is Russia’s attack on Ukraine.
Well, if you rely on rental cars, take a note of how the hike in gas prices may impact the rental car industry.
Fuel-efficient vehicles
Car renters will start demanding smaller, fuel-efficient vehicles since their intention is to save on fuel as much as they can. This is going to make the car rental companies hunt for more small-sized, fuel-efficient vehicles to add to their fleet and match the demand. In addition to the ongoing car shortage in the rental car industry, having a fleet with fuel-efficient cars is going to be an added pressure.
Public transit
Tourists who intend to visit for summer or even the locals who usually rent a car might want to switch to public transit until the gas price hike subsides. People who are familiar with the city know that there’s a robust public transport system. It is quite easy to get from point A to point B at a very low cost. With everyone having access to Google maps, finding out the transit details between common destinations is so viable.
Hourly car rental or ridesharing
There are many other alternatives like Uber which offers ridesharing options. This is the first thing that comes to mind when looking for alternatives to rental cars. This may greatly impact the rental car industry negatively. However, the downside to ridesharing is that its availability is unpredictable.
Also, if the customers find it too expensive to rent a car for an intended period of time, they may even make adjustments with their plans to hire a car just for when they need it.
The impact on the rental car industry because of the hike in gas prices is quite adverse since the potential car rental customers could get creative with renting. There are many options and alternatives for them to consider. Unfortunately, the car rental companies will have to slowly overcome their fight to expand their rental fleet and it is reasonable to expect the current squeeze in rental car supply to last until next year or two.
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