U.S. Markets closed

Avis Tackles Urban Congestion By Teaming Up With Ridehailing Rivals

Isaac Carey, Skift
Avis Tackles Urban Congestion By Teaming Up With Ridehailing Rivals
sgf logo sm

The advent of ridehailing apps has caused car rental companies to grapple with a changing market, where travelers increasingly choose to use Uber or Lyft rather than rent a car.

Arthur Orduña, chief innovation officer for Avis Budget Group, does not see this as an us- versus-them industry, however. Orduña spoke Wednesday at Skift Global Forum 2019 in New York City about ways car rental companies and alternative mobility companies can come together to solve a problem harmful to both: urban congestion. These companies include ridehailing, scooter and bike services.

“In a survey we talked to both business and leisure travelers, and we found that more than 80 percent of them have noticed increased road congestion in last 12 months,” he said. “And almost half avoided trips by car because of it.” In particular, many avoided it because they anticipated difficulty in finding a parking spot.

In fact, the number of travelers expecting to visit a city as part of a leisure trip has been declining over the past three years, and people in general are reluctant to spend their free time inside of a vehicle.

“The average consumer spends 54 hours commuting a year,” he said. “People have avoided 50 million road trips they were planning to do because of this.”

To tackle this, Orduña said, the industry needs to use new technology to effectively cut down on traffic. The company recently commissioned a study with the Texas A&M Transportation Institute to measure consumer responses to the use of alternative mobility solutions, including on-demand vehicles or micro-mobility, multi-mobile applications, and smart city platforms.

“In our study, we found that 40 percent of leisure and business travelers said they would use a micro-vehicle if available,” he said. Micro-vehicles refer to rideshare vehicles that carry only one or two people, such as scooters, bikes, or cars. “Even more exciting, nearly everyone said they expected to use new and alternative forms of transport. So how are we implementing this thinking?”

The company offers both scooter and bike rentals, and has partnerships with ridesharing companies including Via, Uber, and Lyft.

Meanwhile, multi-mobile applications refer to tools like Google Maps. Google Maps allows travelers to stitch together different forms of transport when finding a route.

“This is not just cars, but public transit and walking,” he said. “And we’re sharing our data with these apps. For example, we’ve shared where our Zipcar London vehicles are, so people visiting London can utilize that information to stitch together an optimized kind of trip.”

The company is also sharing its fleet data with cities like Los Angeles, Kansas City, and London, leading to what it calls “smart city platforms.” This, he said, allows for better urban planning, which ultimately reduces congestion.

Finally, Orduña pointed to upcoming technology solutions, including virtual reality and self-driving vehicles. Virtual reality can help leisure travelers plan trips, while self-driving cars can help reduce urban traffic.

“Urban congestion could seriously damage our industry if we do nothing about it,” he said.

Subscribe to Skift newsletters covering the business of travel, restaurants, and wellness.