Challenges That The Car Hire Industry Is Facing

A look at the current financial climate and how this is affecting car companies and the services they provide.

Car Hire companies provide a valuable service for their customers, allowing travel for a relatively inexpensive price and at the customer's leisure. There are certain challenges however that the car hire industry faces that unfortunately drive up prices and forces them to increase security measures to protect their fleets. In a world where financial problems are evermore rife and thieves are becoming increasingly organised, the extent that some car hire companies will go to is an understandable reaction.

One challenge that faces the car hire industry is the increased taxes that are being imposed upon them. As the travel industry as a whole enjoys a period of boom, the taxes imposed upon companies from governments and regional bodies has been increased to match the higher profits; unfortunately for customers this means higher prices. The car hire industry has been described as a tax magnet; for instance the taxes they pay are poured into municipal projects, like the car rental firms in Dallas, Texas that had a five percent tax levied upon them to help pay for the new Cowboy's stadium.

The reason these taxes are easily placed upon car hire firms is due to the fact that they rarely affect people who vote in the region. It is a tax on travellers that will not be involved in the electoral process in that region. As such the politicians have no semblance of conscience when they exact these taxes from the car rental firms, as it will not affect their election chances, they are more than happy to drive rental prices up.

With evermore organised crime focussing their efforts upon car hire firms, it is little wonder that they have struck back with high tech solutions to the problem of theft. One of these solutions is the installation of GPS systems into vehicles that allow the vehicle to be tracked at all times. This information does however give the car hire companies knowledge of speeding, which some may see as an invasion of privacy. As yet there are not many using the technology to impose fines upon customers for speeding, but the technology is there that will allow it.

Other security measures being employed include bio-metric data systems. For instance a recent trial in the UK's Stansted Airport took a thumb print of every person that hired a car from the desk. While some were worried about the protection of this data, car hire executives were happy to make the sacrifice in order to safeguard their fleets. If a car is stolen or simply not returned, the company can then give the fingerprint details over to the police and help the car to be recovered and the criminal prosecuted more rapidly. With evermore uses for bio-metrics in a host of industries this seems to be the future of trade and commerce.

In an industry where it is increasingly hard to make huge profits the car hire companies have had to develop a range of options that come at premium. This vast array of options relies upon the human instinct to impulse buy whilst at the checkout. Such added extras include satellite navigation systems and digital radio, an increasingly popular option is an electronic form of toll road payment that allows ease of use at the toll booths, although the actual tolls will come as an added cost. These optional extras seem to be working as profits are slowly increasing as more customers opt for specialist hire solutions.

These strategies are all there to combat the increasing taxes placed upon the industry, trying to recoup the losses encountered through taxation is a hard balance to achieve, especially when trying to deliver the best deal to customers. Costs are always increasing due to taxation and crime and the hard decision for the companies is where to cut corners in order to keep prices low yet still make a decent profit. In a currently booming travel industry this balance is becoming evermore important.

About the author: Industry expert Thomas Pretty looks into ways in which the car hire is tackling the problems it faces.