Avis CEO says rental car biz is alive and well

Avis Budget Group may need to whip out its old "try harder" advertising slogan to convince Wall Street that the renta...

Posted: Jul 20, 2018 12:49 PM
Updated: Jul 20, 2018 12:49 PM

Avis Budget Group may need to whip out its old "try harder" advertising slogan to convince Wall Street that the rental car business is still relevant.

Who needs to rent a car when you can just get an Uber or Lyft to where you're going? That seems to be what investors are asking. Avis and its fitting CAR stock ticker are down nearly 25% this year. Rival Hertz has plunged more than 35% so far in 2018.

That's an overreaction, says Avis CEO Larry De Shon. He told CNNMoney that rental car companies won't be going away anytime soon. In fact, he said that many of the same trends that have helped Uber and Lyft in big cities are giving Avis a boost too.

De Shon noted that for many urban residents, having a second car is not really a great option. They can get by with one, even if it is a tiny sedan as opposed to a tank-like SUV.

But what happens when a city dweller wants to leave town for a trip to the beach or camping in the woods?

"If you have a long weekend when you want to get away, you have to rent a car," De Shon said. "Our average rental is four days and 450 miles. That's not an Uber experience."

De Shon said that people aren't renting Avis cars for quick one-day excursions. Those kinds of short-term trips account for only 3% of the total rental business at Avis.

"Our clients use our cars. It's the sales person on the road going from one city to next or the leisure customer with children, car seats and lots of luggage," De Shon said.

Still, Avis has made some forays into the ride-sharing business. It bought Zipcar, the company that lets people rent cars for as little as one hour, in 2012.

Related: Lyft now worth twice what it was last year

De Shon said that Zipcar is now available in several international markets and at more than 500 universities as well.

Zipcar has adapted its offerings too. In addition to letting people pick up a car and return it to the same spot they got it, Zipcar also now lets drivers drop off cars at a different location if that's more convenient.

Avis also has a partnership with Waymo. the self-driving car subsidiary of Google owner Alphabet. Avis will provide maintenance services for the fleet of vehicles Waymo has in Phoenix.

"We have been working hard on modernizing our business," De Shon said, adding that the company is also partnering with Toyota and other auto manufacturers so it can add more connected cars to its fleet -- vehicles with mobile technology such as the ability to check the odometer and fuel gauge on a smartphone app.

The Avis app can also be used by customers to check in and choose a car quickly at the rental location. In other words, Avis is hoping to avoid having long lines of tired customers who just got off a plane waiting to get their car at the airport.

Avis also just announced an expanded deal with Amazon that will let consumers book a vehicle via Amazon's voice assistant Alexa -- and Avis will give those customers an Amazon gift card for doing so.

All that leads to happier customers, De Shon said.

"We're focusing on product offerings that are relevant to today's consumer and makes the rental process more simple," De Shon said. He added that Avis asked customers for suggestions on how to best design the Avis app -- and that customer satisfaction is higher than when reservations are done through the app.

This should boost profits too. Analysts are expecting an earnings increase of nearly 25% this year.

Now Avis just has to convince investors that all these efforts are paying off.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 119336

Reported Deaths: 3328
CountyConfirmedDeaths
Hinds8109180
DeSoto734280
Harrison553785
Jackson488488
Rankin412386
Madison388094
Lee368682
Forrest313478
Jones298484
Washington2644100
Lauderdale2611135
Lafayette256043
Lamar234040
Oktibbeha206055
Bolivar205279
Neshoba1883111
Lowndes182862
Leflore173088
Panola172241
Sunflower165949
Warren156656
Monroe154873
Pontotoc151520
Marshall150530
Lincoln144859
Pike140956
Copiah139936
Scott128129
Coahoma126537
Union126025
Yazoo124534
Simpson124049
Grenada123139
Tate123039
Pearl River117960
Itawamba117827
Leake117042
Holmes115160
Adams110245
Prentiss109520
Alcorn105012
Wayne103422
George103020
Covington99729
Marion96944
Tippah95124
Hancock88128
Newton88128
Chickasaw87028
Winston85921
Tallahatchie85826
Tishomingo83141
Attala80927
Clarke78353
Clay71522
Jasper69817
Walthall64827
Calhoun63613
Smith60816
Noxubee60317
Yalobusha56616
Montgomery56523
Lawrence55314
Claiborne54216
Tunica53917
Perry52823
Carroll50912
Stone49814
Greene48218
Humphreys45817
Amite43413
Jefferson Davis42412
Quitman4246
Webster38213
Benton36911
Wilkinson34321
Kemper33415
Sharkey29115
Jefferson28110
Franklin2533
Choctaw2096
Issaquena1074
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 162720

Reported Deaths: 2735
CountyConfirmedDeaths
Jefferson23940385
Mobile17123319
Tuscaloosa10602141
Montgomery10503199
Madison955798
Shelby760565
Baldwin676869
Lee664965
Calhoun476562
Marshall447451
Etowah441952
Morgan430835
Houston423934
DeKalb355429
Elmore327858
St. Clair311342
Limestone297031
Walker287493
Talladega276437
Cullman266525
Lauderdale240543
Jackson225317
Autauga212631
Colbert210232
Franklin209432
Blount200925
Russell19833
Chilton192332
Dallas189227
Dale184952
Coffee183611
Covington177329
Escambia175831
Clarke138717
Chambers138047
Tallapoosa137287
Pike136414
Marion110931
Barbour10559
Marengo104622
Butler101941
Winston94713
Geneva9427
Pickens89018
Lawrence88533
Bibb86115
Randolph84616
Hale78130
Cherokee76414
Clay76312
Washington75812
Henry7316
Lowndes72128
Monroe66310
Bullock65117
Crenshaw61230
Fayette59913
Perry5996
Cleburne5799
Conecuh57213
Wilcox57112
Macon54320
Lamar5235
Sumter48621
Choctaw39512
Greene34516
Coosa2173
Out of AL00
Unassigned00
Tupelo
Clear
49° wxIcon
Hi: 60° Lo: 42°
Feels Like: 47°
Columbus
Clear
49° wxIcon
Hi: 60° Lo: 42°
Feels Like: 47°
Oxford
Clear
43° wxIcon
Hi: 59° Lo: 39°
Feels Like: 43°
Starkville
Clear
45° wxIcon
Hi: 60° Lo: 38°
Feels Like: 45°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather