Holiday car hire: sharing economy unprofitable for peer-to-peer groups

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Holiday makers trying to rent a car in the United States are shocked by the stickers. It assumes they can find a car. There are many horror stories. Many car lots are empty.In Hawaii, some tourists U-hole lease Van.

problem? Something like Hertz Global and Avis Budget sold hundreds of thousands of vehicles during a pandemic where demand collapsed and was costly. Currently, they are struggling to replenish their fleet as the trip rebounds. The shortage of chips has forced automakers to reduce production. The spread of Omicron has increased demand, and travelers have chosen to drive rather than fly.

The average daily car rental rate is about 30% higher than it was a year ago. According to the travel agency Kayak, it is 42% higher than the pre-pandemic level.

These are good times for car rental companies. At Avis Budget, revenue increased by more than two-thirds in the first nine months of 2021. Net income exceeded $ 900 million, compared to a loss of nearly $ 600 million in the year-ago quarter. Avis Budget’s share has quintupled in the last 12 months.

Even Hertz, which just went bankrupt in June, had net profit of over $ 600 million in the previous quarter.

The shortage of rental cars should open the door to peer-to-peer car-sharing companies. The largest of these, Turo, has applied for publication this week. This was after rival Getaround had a discussion about floating due to a merger with special purpose company Spac.

Founded in 2010, San Francisco-based Turo offers a platform like Airbnb, where you can rent your own car at any price you like. Turo receives up to 40% commission from each booking.

Convenience is the main selling point of Turo. Users can also find a car to rent nearby or ask the owner to deliver it. Its charm grew during the pandemic. Sales in the first nine months of 2021 more than tripled to $ 330.5 million.

The loss has also increased. It says. If car-sharing companies like Turo, which have been around for more than a decade, can’t make money now, I’m wondering if they can make money by now. As the pandemic weakens its grip, the balance of advantage remains with Hearts and Avis, and their larger fleet.

The Lex team is interested in hearing more from our readers. Why are car-sharing companies struggling to make a profit? Let us know what you think in the comments section below.

Holiday car hire: sharing economy unprofitable for peer-to-peer groups Source link Holiday car hire: sharing economy unprofitable for peer-to-peer groups

The post Holiday car hire: sharing economy unprofitable for peer-to-peer groups appeared first on California News Times.

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