Does Car Rental Consolidation Drive Competition?

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July 29 (Bloomberg) -- Fred Lowrance, analyst at Avondale Partners, discusses the impact on consumers of consolidation in the rental car industry as it narrows to three companies. He speaks on Bloomberg Television's "Market Makers."

These companies are certainly enjoying their newfound dominance.

Do you think this will continue?

Thank you for having me on.

I think it could . the big three players, hertz, avis, and enterprise, they control 90% of the rental markets.

Whether this leads to less competition, i doubt it leads to less competition.

What it means is you now have three sophisticated players that could control what happens in pricing with volumes.

As an investor you probably would have just more confidence and sustainability of the shared price.

It sounds like it is destroyed up only of the rental car market.

Certainly great for shareholders, not necessarily for consumers.

I would say there are still eight national brands that are out there that have to be controlled by three people instead of four.

From my perspective you have all of the options and price point to ever had as a consumer.

What you have as a shareholder is an investment in a company that now probably has more rational and sophisticated players working with it.

I like the idea of rational players.

We have much better revenue growth on top of the income statement you and these have been dogs decades.

What has changed and what is the belief in the persistency of the stock performance we have seen in the last year?

I think you hit on it.

We go back to the sophistication that has been developed over the years by these companies, whether it be fleet management systems, just add better understanding of customer behavior.

As shareholders you would have to have more confidence in -- confidence.

There was a massive jargon in alert.

I got a car from san antonio to little rock.

It is a question of whether you have a car in your fleet or not.

During the winter you get a lot of demand down in florida.

So you want to have more fleet then you would normally have in florida.

It is the ability to manage -- serenades the hummer h one when she rents a car in manhattan.

What i do need is zip car, car sharing.

How is this model disrupted the industry.

I do not know that it has disrupted it more than it brought some more discipline to the industry.

Effectively what car sharing does is it allows you to manage your fleet to meet demand when it is at its peak.

Your peak demand is on the weekends for traditional rental car companies.

Your peak is actually in the middle of the week for enterprise, hertz, and avis.

That just improves the utilization, the efficiency of your fleet.

It improves your ability to learn money.

-- to earn money.

Thank you so much.

This text has been automatically generated. It may not be 100% accurate.

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