The year 2020 was underwhelming to most across the world as the global pandemic of COVID-19 caused brutal distress to all if not most people, families, industries, organizations, etc. It has been a year since the pandemic swooped upon our world and enforced certain worldwide changes and phenomena. Although things seem to be normalizing, the aftermath has been so severe that a lot of business enterprises and organizations across all industries have either shut down permanently or are struggling to revive.

For the car rental industry, it was a double whammy of the pandemic and a precarious economy, shuddering the car rental business enterprises down to their roots. Every player, whether independent or conglomerate, in the car rental industry, took a massive hit of various types. According to recent studies, the revenue of the car rental industry dropped by more than 27% amounting to slightly more than 23 billion USD in 2020, which is the lowest in a decade.

Despite the predictions of recovery in 2021, continuing on the same trend, car rental business enterprises are facing several challenges due to a variety of reasons even in 2021. What are the challenges faced by car rental business enterprises and industry? And Why?

Car Rental Challenges in 2021

Change in Market – Car rental businesses cashed in on airport rides, which at times made up 95% of their earnings. The cash flow was the extent that new terminals were built just to make the most of the lush and lavish market. However, when international and, to an extent, domestic flights were canceled to mitigate the widespread of COVID-19, the entire car rental industry came to a screeching halt, to say the least. Now, the industry is continuing to struggle as they are unable or finding it difficult to change their market strategy.

More User-Friendly – In compliance with the COVID-19 protocol, car rental business enterprises have to be more user-friendly. This should first reflect in the car rental software, which makes for a great impression for the riders. Now that ride-sharing is becoming more common and user-friendly, it is preferred by the riders over car rental services. Therefore, it is very important for car rental business owners to look for ways to make their business more user-friendly. This is proving to a challenge for car rental business owners to do so, since it requires groundwork, revamping of their car rental software, improving their overall quality, extra safety measures, etc., all in compliance with the health regulations that are set to mitigate the spread of COVID-19.

Fleet Management – The service end of the car rental business has taken a severe hit more than the sales end of vehicles. Therefore, to generate some sort of revenue car rental business owners have decided to sell parts of their fleet, rather than for those vehicles to sit and collect dust. This in turn has made fleet management more difficult and elusive for the users, drivers, as well as car rental business owners. The number of such transactions has amounted to an estimate of over 41 million units in the past year, which is dramatically high. As a ripple effect, car rental business enterprises have found it difficult to provide quality car rental service and manage their business with a small fleet.

Customer Service – Customer service is a vital aspect of a car rental business regardless of the state of the economy, political drift, or even a global pandemic. In addition, customers have never lowered their expectations-bar, making it even more difficult for the car rental service providers to provide good customer service, especially during these difficult times.


While continuous efforts are being taken to sustain, improve, and revive the car rental business sector, these kinds of resources can help the car rental business owners to have a better understanding of the current market, modify their business strategy, reinvent the car rental business sector, and revive their businesses back to life. RentCar can help your car rental business with insightful business strategies and resources, state-of-the-art car rental software, and much more. Our expert team is equipped to help revive your car rental business during these difficult times; so, partner with us and become a revenue-generating business.