Economy

Ride-hailing apps breath new life into car rental sector

Brazil’s latest unemployment figures are quite disappointing, as one-quarter of the workforce is either unemployed or underemployed. Only one sector actually managed to create jobs: transportation, thanks to ride-hailing apps such as Uber and 99. When these apps started to become popular, back in 2014, they were seen by car rental companies as a threat to their business model. Executives feared that people would no longer rent vehicles if they could call one on their phones.

However, ride-hailing apps now represent a major opportunity for growth in the rental sector—with Brazil’s biggest players dedicating specific areas only to serve autonomous app drivers.

One of the main upsides for hire-a-car agencies is longer-term rentals, which reduces the time vehicles remain idle. Besides, ride-hailing companies became a sort of “middle man” for potential clients. Uber’s website, for instance, features five partner agencies which offer special discounts to the app’s drivers—according to the tech giant, some may reach 50 percent, depending on the model and the duration of the rental.

“There is immense growth potential for car rental companies within the transportation app sector. At the moment, 20 percent of the fleet in...

Gustavo Ribeiro

An award-winning journalist, Gustavo has extensive experience covering Brazilian politics and international affairs. He has been featured across Brazilian and French media outlets and founded The Brazilian Report in 2017. He holds a master’s degree in Political Science and Latin American studies from Panthéon-Sorbonne University in Paris.

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