Saturday, October 12, 2013

The short-term car rental service of the future

In the previous post, I wrote about how I envision smartphones replacing many of the functions of in-car entertainment and navigation systems. In this post I will be focusing on how that can affect automobile ownership and culture.

One of the small features that really blew my mind when I purchased my car was proximity-based keys which allow you to enter and start your car without having to ever put a key inside a lock. Not only that, but each key stores all sorts of preferences, from mirror and seat positioning and suspension settings, allowing each key holder to customize their driving experience. While I welcome this marginal innovation, it leads me to ask, “Why do we even need keys?” With the introduction of NFC and like-technologies into our smartphones, there’s no reason why keys can’t be replaced with our smartphones, the same ones which can then be docked into the car to load your personalized settings. Turning the automobile into a “thin-client” of sorts would allow any car to be your car, introducing a whole new opportunity set for the future of automobile rentals.

A couple of weeks ago I was in Paris for a couple of days. Having limited time and wanting to see as much of the city as possible during my short stay, I opted for renting a bike (velib) and riding around the city. One of the things that caught my eye as I tried to navigate roundabouts and punished my coccyx on cobblestoned streets was the presence of an electric car sharing system called Autolib. While it may not be suitable for many Americans, the success of Zipcar in dense, urban, locations is proof that there is a market for short-term car rental within close proximity to people’s homes. Improving this model by using electric cars with inductive-charging capabilities and reserved docking parking spots located throughout the city, eliminating the need to return the car to the same point of origin would remove some of the final inconveniences.

Imagine basic compact, inexpensive and utilitarian automobiles parked every couple of blocks. If you are a service subscriber, you simply walk-up to the car, use the NFC-capability of your phone to unlock it, and dock your phone on the dash to double as a navigation/entertainment display. The unique identifier of the car is recorded by the phone and submitted to a central database, and if your account is in good standing, a one-time use key is digitally delivered to your phone which allows the car to start. Your phone’s built-in navigation system includes all the car rental locations and availability of both cars and spaces is updated in real-time. A parking-assist function (much easier to implement in fully-electric cars) helps keeps dings to a minimum and internal diagnostic checks are run and uploaded at the time of docking the automobile, allowing the rental operator to easily keep track of maintenance needs and fleet location. Because your identity is linked to your phone and entry / ignition are recorded and associated to you, there is a strong disincentive to vandalize or abuse the cars, and no need to worry about someone breaking-in to steal a stereo--you’re carrying it out.

The uses for this range from short local round trips to places inaccessible by transit, to one-way trips for those nights when you may want to feel free to indulge in a few cocktails with dinner and not have to worry about driving home at the end of the night. Additionally, reducing the cost of not driving your own car out may lead to reductions in drink-driving, an additional positive externality. The logistic challenges are not trivial, but they are not great and all of the technologies listed in this post are already available today, it’s just a matter of someone putting it all together.


  1. You familiar with Car2Go? They're pretty close to this.

  2. Things are already very close to this. Check out what's happening in Berlin. And like you said, their goal is for the fleet to go fully electric.

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  5. Why does Budget organize its car classes differently than manufacturers and some other car rental companies? Peer to Peer Car Rental NZ

  6. Mark:
    I booked the car from this company and can honestly say that it was my best rental experience.

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