How To Develop a Car Rental Mobile App That Effectively Competes Against The Big Agencies

January 20, 2022

By:  John Tomblin, Senior Solutions Architect
Los Angeles Bizz, a division of Sofvue, LLC
Printed with permission of Sofvue, LLC and the author

Whether it’s a holiday or a business trip, we all want to travel in the most comfortable way possible, and with the exception of large metropolitan areas like Chicago, Detroit and New York, where public transportation is abundant, other options must be considered.

Thanks to a new generation of smart, business savvy entrepreneurs, people can now rent a car of their choice and travel anywhere at any time. As a result, the car rental service model has become a hot topic across the nation.

And if you’re planning to start a car rental business or expand your existing one, you will need a mobile app that allows customers to complete their booking fast, on the go, and from their phone.

Also, the days of having only a few choices from the “big 3” is changing.  Sure, the big car rental agencies will keep their stronghold within the marketplace, but in large part because of their brands, airport kiosks and heavy advertising budgets. What’s changing are the “local” community needs and the ability for consumers to rent a car or motorcycle, or even a bicycle, from a small business in their local community. I’ve even seen rental apps for vespa’s and scooters in very small geographic markets with less than 50,000 people.

In this article, we will meander through some statistics about the car rental industry. We will also talk about how you can build a local car rental mobile app that outperforms some of the bigger players in the marketplace.

Let’s get started!

The future of the car rental market

According to Allied Market Research, the global car rental industry is projected to grow at a CAGR of 10.7% from 2020 to 2027. The same research shows that the industry will be worth $214.04 billion by 2027, up from $92.92 billion in 2019.

Here are some more statistics from Statista:

Revenue in the Car Rentals segment is projected to reach $ eighty-three million in 2022.

The number of users in the Car Rentals segment is expected to amount to 604.2 million users by 2026.

User penetration is 5.6% in 2022 and is expected to hit 7.7% by 2026.

The average revenue per user (ARPU) is expected to amount to $193.85.

In the car rentals segment, 71% of total revenue will be generated through online sales by 2026.

These numbers show that the car rental business is not going out of fashion anytime soon. In fact, demand, for a wide array of reasons, will only increase in the coming years.

Understanding the car rental segment

Developing a car rental mobile app requires both technical skills and time. You also need to create a strategy to make your app a success, and when I say strategy, I mean much more than the “app” development side of the project. I also mean the go-to-market strategy, the marketing side of the project for what I call the “primer” and “post primer”, along with a host of other factors that must be considered and funded to make the project a success.

Before we move to the steps to develop a car rental mobile app, let’s first understand the two business models.

Fleet model: The fleet model assumes you own, support and operate your own fleet of vehicles, whether 10 or 10,000. It assumes you have drivers, mechanics and customer service personnel (albeit remote) that work for your company and are part of the vehicle-for-rent model.

Commission-based: Under this model, the car owners register their cars with your company allowing you to effectively outsource your fleet to hundreds or even thousands of drivers. When rides are booked through your app, the rider gets the ride they want, your company gets paid a percentage of the booking fee charged to the consumers and the driver earns a commission for performing the work. Although the commission-based model appears straight forward, there are other major expense factors that go into doing it successfully.

Types of car rentals

There is a plethora of options, each catering to different needs for different users.

Self-driven Vehicles: Allows customers to rent a car and drive it themselves. The booking charge depends on the type of car they choose, the distance, and the number of hours or days it is being rented for, as well as considerations for insurance, interstate fees and border crossings, both intrastate and into Mexico and Canada.

Corporate Car Rentals: Involves renting cars to for professional business purposes including, but not limited to, corporate parties, corporate “Ballpark” days, bus rentals, to name a few.

Airport Limousine Services: Allows customers to book a ride to or from the airport.

What are the steps to creating a car rental mobile app?

1. Choose a Business Model

As with any business, creating a car rental app begins with choosing a business model. Since owning a fleet is not possible for most small and mid-sized businesses, we will focus on the current, most popular model, the commission-based model.

2. Identify the Feature set

Your app’s features determine cost, as well as whether your app will succeed or fail. The features must supply all the necessary information to customers even before they book a car. Also, the process should be as seamless as possible.

That said, here are some major features that customer-facing mobile apps should have.

Login/register: Like any app, you need a login/register page that allows users to create an account and log in to their profile. You should also include a social sign-in option that will enable customers to login in with a single click.

Account verification: You need to know who is hiring your car. The best way to do this is by requiring users to verify their identity, including their driver’s license, credit card information, etc.

Vehicle Selection Tools: Allows users to select a car according to their preferences, time and budget.

Reserve a Vehicle: This feature should allow consumers to choose a time and date to rent a vehicle. This eliminates the wait time and ensures customers get the car they want…and when they want it.

Booking Manager: Allows customers to see their upcoming bookings and cancel/change the times/reservations of their booking.

Push Notifications: Let’s consumers receive notifications confirming their booking and other details. You can also use push notifications to remind customers an hour or two before their booking that their vehicle is ready for pickup.

On the administrator interface side of the project, your app should include:

Administrator Dashboard: Shows an overview of what cars are available and booked on a particular day.

Inventory Management System: Allows you to manage all the vehicles, including updating car maintenance information. This feature also lets you track who has booked a particular car and when, and helps you manage all the associated logistics.

Customer Management: Allows you to manage the customers who have registered on your app, including their documents, bookings, and more.
Pricing Management Tools: Allows you to manage the fare of cars based on different factors, such as time, distance, and model.

Analytics: Provides reporting output showing you how your business is growing. It also displays the most popular cars, the busiest days, and more. You can use these insights to create a marketing campaign to drive more bookings.

3. Integrate a Payment Gateway

You will need to integrate a payment gateway into your mobile app to accept online payments. Make sure to choose a reliable payment gateway provider that allow customers to choose from a variety of options (including mobile wallets).

Hire a Mobile App Development Company in Tucson

To do it right, you’ll need the right development partner by your side. You’ll need a company with deep technical skills and experience, along with a dynamic team of programmers, BA’s, analysts and architects to get the job done right.

TucsonBizz is a leading mobile app development company in Tucson and across the Southwest. We have the required skills and expertise to create a car rental mobile app for your business and help you become the go-to brand for car rentals in Tucson.

Contact us today to learn more about how we can help you expand your market reach with a new business mobile application.

Article References:
Allied Market Research:

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