money Expert: Rental car shortage could last ‘six to 18 months’
As a rental car shortage plagues the nation with inventory outages and sky-high prices, one industry insider said the issue could last for another year and a half.
The rental car shortage will “resolve itself over time” but “is going to be challenging for the rental car giants for the next six to 18 months,” Andre Haddad, CEO of peer-to-peer rideshare app Turo, recently told Yahoo Finance Live. “During that time, we’re going to continue to position ourselves to be a great alternative and great way for travelers to find other options.”
Read more: Summer travel 2021: Tips for getting a car rental
At the pandemic’s outset, rental car companies sold off their fleets to right-size for the cratering demand. Now that pandemic restrictions have lifted, confidence has returned, and domestic travel is picking up, there are more reservations than companies can accommodate and travelers are turning to alternative accommodations.
“We're uniquely positioned to alleviate this rental car crunch because our hosts [already have] cars that they own,” he said. “They're already leveraging this underutilized asset, which is the car, as cars are idle the vast majority of the time.”
For those in certain locations where the rental car shortage is especially dire, such as Hawaii, it’s an opportunistic move for locals to make money and “alleviate that travel crunch,” Haddad said, with some hosts seeing “ their earnings multiplied by a factor of 10” year to date.
“There's clearly a unique moment in time now with the rental car crunch, the inability for the large fleet car operators like Enterprise, Avis, and Hertz to scale up their fleets because of the shortage of cars and shortage of microchips,” Haddad said.
Especially enterprising hosts are using Turo to build small businesses or earn additional income by buying or leasing additional cars and “dedicating them 100% of the time to the usage on the platform,” he said.
“Our hosts are telling us that their business is really booming,” Haddad said.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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