Category: Rental Cars

The myth of the connected car – who really benefits?

OEMs and their suppliers are busy advertising driver focused features of crash response and passenger focused features of streaming entertainment with a car WiFi network. But is that what the connected car is really all about?

Well, let’s look into what’s in it for the OEMs –

1) Diagnostic information

Manufacturers are largely flying blind when it comes to understanding real world data about their cars. Connected cars allow manufacturers to identify failures and faults early, so they can start working on fixes much earlier than they do currently.

2) Software updates

Currently, if a vehicle needs a critical software update, auto manufacturers have to issue a recall and pay dealerships (at full $140/hr rates) to perform updates. If all newly manufactured cars were connected, OEMs can avoid the cost and negative reputation of issuing a recall for a software fix. As vehicles become increasingly reliant on computing, more and more software updates will be required in the future.

These are the primary reasons why OEMs include a limited time for “connected” service for new vehicles, ranging from 1 – 3 years after purchase. They figure that most of the critical issues will be figured out in the first year or so, and they won’t need to pull diagnostic data or make software updates after that.

For the consumer – what does a cellular connected car offer that is not already available by pairing your car to your Bluetooth connected smartphone?  All of the consumer focused value, including personalizing the driver experience, streaming entertainment to passengers, and even crash response – can be delivered with a smartphone (possibly by adding on one device or another), with minimal additional cost.

For a rental or commercial fleet company, what is the added benefit of a connected car?  The goal would be a fully automated car rental experience by offering remote lock / unlock, precise fuel, odometer, damage detection, and GPS tracking.  First, GPS and cellular systems are unreliable.  Second, rental companies would have to undertake the huge technology project of stitching together every manufacturer’s connected car system into the same interface, with security as a huge concern (considering an entire fleet would have unlock capabilities, with credentials passing through many hands).  Third, OEMs charge between $10 – $20 per vehicle per month – far more costly than JumpDrive for the majority of the same features, available today across 30 vehicle manufacturers.

What’s wrong with car sharing technologies?

Car sharing, self service, or on-demand rental technology has made a splash in the rental car industry, but still hasn’t really taken off.  Why?  Because most solutions get it wrong.  Here are the top issues –

1.  Reliability

GPS Signal Lost

To date, most car sharing rental technologies depend on GPS technology to identify when a vehicle is picked up and when it has returned.  The problem is that GPS often has trouble in cities, which paradoxically is where most self service operations are based.  Self service technologies also rely on cellular communications, which can be flaky, especially for devices usually hidden under the dashboard.  This is an especially major reliability problem if you are depending on cellular for critical functions like locking or unlocking a vehicle.

No cellular signal?

Shameless plug – JumpDrive works perfectly without depending on GPS or cellular communications.

2.  Security

With self service rentals, customers rent a vehicle without speaking to or seeing an agent – how do you know the customer is who they say they are?  Most companies can mitigate this by restricting automated rentals to customers who are a “member”, with a driver’s license, insurance, and credit card already on file.  Companies that use technology to vet identification documents also help.

However, the biggest security is leaving the vehicle’s keys inside the vehicle itself.  Many self service rental technologies use a starter interrupt which is enabled and disabled by a cellular connection, a solution commonly used by the “buy here pay here” industry.  Unfortunately, breaking a window, disabling the starter interrupt (and unplugging the cellular connection), and driving off with the keys takes less than 3 minutes.

3.  Critical Features

Automated car rental technologies need to provide the following:

  • Real-time inventory at each location
  • Timestamp of vehicle pickup and return
  • Precise Fuel level
  • Odometer
  • Vehicle damage indicator
  • Check Engine Light status (CEL or MIL)
  • Key management

Most car sharing technologies are missing precise fuel level and odometer, mostly because it takes lots of engineering effort and early access to new vehicles.

4.  Cost

Car sharing technologies vary widely in cost, depending largely on how it handles key management – A) the customer can pick up the key from a valet attendant, B) a kiosk or key machine can dispense the vehicle key, and C) the customer can use his/her smartphone to unlock the vehicle, with the key already inside the vehicle.

Option A is the cheapest of the 3, the keys are secure, but requires you to deal exclusively with valet garages that are manned 24 hours a day.  Option B is also inexpensive, the keys are secure, but requires a fixed location with access to power and a place to mount a key machine or kiosk.  Option C is the most expensive by far, and presents the biggest security risk, but is easiest for the customer (if they have cellular service in the garage / parking lot and a charged smartphone).

GPS/Cellular + ValetGPS/Cellular + Smartphone UnlockJumpDrive + Key Machine

Option A Option B Option C
Costs
Hardware $ 120 $ 500 $ 50
Installation $ 75
Uninstallation $ 50
Lot Hardware & Installation $ 1,500 $ 1,750
Monthly Fee (per Vehicle) $ 15 $ 20 $ 6
5 Year Cost (New vehicle every year)
# Vehicles 20 20 20
Total Initial and Installation Costs $ 3,900 $ 22,500 $ 2,750
Total Monthly Costs $ 18,000 $ 24,000 $ 7,200
Total 5 Year Cost $ 21,900 $ 46,500 $ 9,950
5 Year Return on Investment 64% -23% 262%
Reliability Issues GPS is unreliable in cities, cellular is unreliable in some garages GPS is unreliable in cities, cellular is unreliable in some garages, user needs smartphone and cellular coverage
Technical Limitations User needs smartphone with cellular coverage at garage / lot Lot requires power, and installation of key machine
Security Issues Theft issue – keys are stored in vehicle, starter interrupt can be disabled in 2 minutes

Conclusion

We designed JumpDrive to be the most secure, reliable, fully featured, and cost effective solution for station to station car sharing.  To learn more about our complete solution or perhaps even how we can supplement your existing or planned solution, let us know.

This article was written by JumpDrive founder, Sachin Chaudhry.

Why is precise fuel measurement important?

fuel-gauge

Despite charging punitive fuel rates, most rental operators still lose money on fuel. The problem is that they lose smaller amounts on each rental, and try to make it up on the few customers who return with less fuel. The result is a poor customer experience and continued fuel losses. So, what is the root cause?

The Pickup Process – Is the tank really full?

When a customer picks up a rental car, the fuel gauge usually looks full.  But is it really full?  Everyone renting a car can tell you that after driving up to 40 miles on a full tank, the fuel gauge will still appear full.  So, from the rental customer’s perspective, he/she doesn’t have a lot of confidence that the car is truly full on pickup.  This becomes really relevant at the end of the rental trip when an operator might want to charge the customer for fuel.

The Return Process – Near full returns

When a customer is ready to return a rental car, 1 of 2 things usually happen –
1) He/she doesn’t really fill the tank up all the way.
2) He/she fills up the tank all the way (to the click), but then they drive between 10 – 30 miles to the return location.

On average, customers return the vehicle 1.6 gallons less than a full tank.  However, because the fuel gauge appears to be full, or within the rounding error of full, rental agents consider it a full return.  The near-full return accounts for approximately 60% of fuel loss at rental operations.  This ~$3.50 fuel loss per return adds up to $20 per vehicle, per month.  Rental operators usually try to make up for this loss by charging punitive rates when customer return with a less than full tank, creating even more customer service issues.

The Return Process – Less than full returns

How do you charge customers for fuel when they return with a less than full tank – what price and what volume?  Most operators charge a punitive fee (ranging between 2-3x the pump price).  But what about volume?  Do you round in the favor of your customers?  On average, by rounding in favor of customers, rental agents actually shortchange their operators by 0.8 gallons per “less than full” return.  When you are charging $6/gallon, you are potentially leaving $5.40 on the table.  What’s even worse, is that customers still have the perception that they are being ripped off, for 2 reasons – 1) was the tank really full at pickup? and 2) $6/gallon is a too high of a price.

Recommendations
1) Start measuring precisely!
2) Be transparent to your customers and give them the precise fuel level at pickup.  If the vehicle is at 98.75% full, they should know.
3) Charge close to the pump rate (plus a flat convenience fee) and consider giving a fuel credit when a customer overfills the tank.

Your customers will remember it as the best rental experience they’ve ever had, and you will eliminate your fuel loss. Welcome to a much more profitable future!

This article was written by JumpDrive founder, Sachin Chaudhry.