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Uber CEO Dara Khosrowshahi said on CNBC earlier this month: “We think we can be the local super app.” The company wants to offer more than ride-hailing and food-ordering services to boost how often consumers use its app. So Uber recently took a step to expand its offerings by adding car rentals.
The Uber Rent service went live without much fanfare for users based in the U.S. and Australia. Uber is testing it in Britain and France, a spokesperson said.
The new feature in the Uber app helps consumers rent a car from national brand car rental chains. But it also includes next-generation brands.
Uber’s entry into car rental fits into a trend among e-commerce sites like Uber to do more than sell a signature product like ride-hailing. (See Skift’s coverage of the superapp phenomenon worldwide.)
It’s also driven by car rental providers seeking distribution on channels with a desirable consumer segment they’ve struggled to reach: quick-to-buy, mobile-first millennials. Companies like Hertz haven’t invested the same money as brands like Uber in attracting these users and persuading them to buy.
Uber’s entry comes at a time of red-hot demand for cars in many markets. During the pandemic, many rental car companies sold off some of their fleets. But now they’re having trouble adding back supply to meet demand. New car production has been stymied by several factors, including a shortage of semiconductor chips partly due to a drought in Taiwan. The chips are critical to many new vehicles, and the problem is unlikely to be resolved until the end of the peak summer travel season in the Northern hemisphere.
The car rental sector as a whole outpaced the lodging and airline sector in spending by consumers, according to recent spending data.
“We are working with CarTrawler exclusively on Uber Rent,” said a spokesperson. That’s a coup for the Ireland-based tech vendor.
“We’re aggregating the supply, doing the pricing, and helping drive the sort order [of the search results] and helping them understand the industry,” said CEO Cormac Barry of CarTrawler.
Besides tech, CarTrawler also offers customer service. If a user of Uber Rent books a car rental through a third-party agency but then has a problem with their booking, CarTrawler is typically responsible for handling the customer service.
For its flagship service, Uber has had some trouble getting enough drivers on the road in key markets to meet demand. Both Uber and its rival Lyft in the U.S. said that they’re adding incentives for drivers.
In overseas markets, Uber has addressed this problem by partnering with owners of vehicles to rent their supply to drivers. In many cities worldwide, Uber drivers don’t own or lease the cars they drive. They instead rent them. For example, two out of every three of Uber’s approximately 600,000 drivers in Brazil before the pandemic didn’t own their vehicles but instead rented them from companies like Localiza Rent a Car in deals often facilitated by Uber.
In many sub-Saharan African countries, Uber often partners with Moove, a flexible car ownership company, to provide Uber drivers with long-term access to vehicles that are fitted with transparent partition screens and other customizations.
But in developed markets, demand for both ride-hailing and traditional car rental will likely outstrip supply in the next few months.
“Availability is just going to be a huge issue in car rental this summer,” Barry said. “It’s going to be like nothing that the industry has ever seen before.”