Matt Kelley lives in Denver and works for Major League Baseball, but he’s like people traveling to the Mile High City for the All-Star Game: He needs a car.
He and his wife went looking for a rental car earlier this week and found prices had shot up. Another issue people face is a limited supply. Try to reserve a vehicle online at Enterprise near Denver International Airport during All-Star week and you get “Sold Out Location” across the screen.
Kelley said cars were available at the Enterprise he tried. He and his wife have only one car, which isn’t usually a problem, but “we have lot of things going on.”
“So instead of trying to arrange a bunch of different Ubers, that sort of thing, we decided to rent a car,” he added.
But Kelley went with a car sharing company when Enterprise quoted him $120 a day. “We had rented from there previously and it was $30, $35 a day.”
Car rental companies are just one of many industries dealing with the economic effects of the pandemic, such as material and labor shortages, while trying to meet escalating demand. Rental car prices and demand were up 70% over the Fourth of July holiday compared to the same period in 2019, according to KAYAK, an online travel agency.
But it’s not just people with pent-up travel fever that has put rental cars in short supply. During the height of the pandemic, when business plunged, companies cut costs by unloading cars with plans to restock when business picked up.
Then a pandemic-induced shortage of computer chips hit, shutting down auto assembly plants and emptying out car dealership showrooms.
“There aren’t enough new vehicles to supply, not just rental car companies but consumers. The rental car companies are having to go to remarketing channels, auctions, to augment where they would typically buy new cars,” said Trent Broberg, CEO of Acertus, an automotive logistics company.
Used cars aren’t so easy to find, either. With a premium on new vehicles, some models of barely used vehicles are selling for more than they did new.
One of the services Acertus provides is relocating rental cars to places where demand is high because of events, like the All-Star Game, or to vacation hot spots.
“Right now, you’re not seeing the repositioning of assets that historically would have been done because you just don’t have a lot of assets,” Broberg said.
And Broberg said a shortage of workers, a problem bedeviling many industries, is another factor. “I’m sure they’re having challenges staffing hourly workers,” he said of car rental agencies.
A challenge for Acertus is recruiting enough drivers to move cars around.
Avis declined to comment on its supply of cars in the Denver area. Hertz didn’t return a request for comment.
In an email, Lisa Martini of Enterprise Holdings said the company, like the rest of the industry, is seeing increased demand across the country and expects it to continue through the summer. Enterprise is also seeing increases in the length of rentals and demand for specialty vehicles, such as vans, pickups and large sports utility vehicles.
Martini said providing flexible travel dates and pick-up locations could help. She said Enterprise has added a feature that helps direct customers to available nearby locations.
People who want but can’t find a rental car might opt for an Uber or a Lyft. However, that road could be a bit bumpy, too. The research firm Rakuten Intelligence said in June that the price of a ride in March was 37% higher than a year ago. The companies have attributed higher costs and wait times to a driver shortage.
Uber didn’t return a request for comment on its service in the Denver area. Lyft said in an email that it doesn’t release market-specific rider or driver numbers, but that as vaccines were rolled out this spring and people started traveling more, the company began to see the demand outpace the number of available drivers.
“We’ve added thousands of drivers in the past few weeks and it’s already leading to a better rider experience with wait times down more than 15% nationwide, and down 35% in some major markets,” the company said.
Lyft’s Wait and Save feature offers riders lower fees if they opt for longer waits.
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