Apparently, it’s not just cabbies getting clobbered by ride-sharing companies like Uber and Lyft. Today Hertz warned that weak demand for rental cars will cut its revenues for the first quarter by about 3 percent.
While that’s bad news for Hertz and other car rental companies, it’s good news for those of us who frequently rent cars. Why? Because when there are too many rental cars chasing too few travelers, prices decline.
While Hertz did not mention in its warning that ride-sharing alternatives such as Uber or Lyft are having an impact, the New York chattering classes did.
“I think this is a challenged group, all of which are dealing with Uber,” said CNBC’s vociferous Jim Cramer, adding “Their failure to acknowledge Uber shows their head is in the sand.”
“If by ‘excess capacity’ he means ‘Uber’ then, yes, we are in agreement.” – Jason Clampet, Skift
In recent years, the rental car industry has consolidated into just three primary giants (Hertz, Enterprise & Avis)– which you think would lead to higher prices, but that’s not happening. You’d also think that it would lead to higher stock prices, but Hertz’s price is down 55 percent over the last year. And it’s likely due to competition from the likes of Uber and Lyft. Or is it?
Question for TravelSkills readers: Is the availability of ride-sharing options like Uber/Lyft reducing your reliance on rental cars? Please take our poll:
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