Rental Cars – services keep going down and prices keep going up

After traveling internationally more than just a bit recently, I had a two day trip in and out of Cincinnati this past week. I have been renting cars from Budget and occasionally Hertz for the most part over the past twenty years. The current economic downturn has impacted the car rental companies in many ways. Fewer renters, older cars as car manufacturers seem to have discontinued the practice of leasing new cars to the car rental companies in order to get people to try them out.

So people are not buying cars and consequently GM, Ford, Toyota and all the others are no longer offering those low mileage cars to renters. The best rate we could come up with on a one day 3 hour rental was $ 270.00 for a full size (that being a Ford Taurus which does not seem very full size to me). For twenty seven hours. Digging a little deeper the day before my trip we found that we could rent a minivan for $ 205.00 for the same period. So we went for it as like many companies we are looking to hold down expenses wherever possible.

If you are not aware Budget and Avis are now ‘one’. Budget has a ‘Fast Break’ program for frequent renters. I am in the program and for the most part it is pretty good – the rental bus drops (or sometimes you just walk over if within the airport like in Tampa) customers off at the kiosk which has a display listing your name and which row you can choose any car. Not in Cincinnati (whose airport is actually in Northern Kentucky). All the Avis and Budget customers had to exit at the Avis lot (apparently the Budget lot had closed unbeknownst to me) and wait since the computers were down.

Standing in the rain waiting my ten to fifteen minutes I considered how much car rentals have changed. The paradigm appears to be cars with high mileage, low choice opportunity, more expensive prices than ever before (stick it to the business traveler as a one week renter does not pay much more than 50% than the one day plus I rented!), and declining customer service.

From what I can see all the car rental companies are following this same model. The real question is why car rental companies thought lowering customer expectations is a good idea in the first place. It just isn’t. I feel there is a big time opportunity to cull out a different model in the car rental marketplace. It will take Virgin-Atlantic or maybe even a Jet Blue new approach but I think people would respond to something away from the lousy and seemingly identically boring alternatives available now. What do you think?