How Covid-19 Has Affected The Business Of Car Rentals?


The sudden outbreak of the pandemic has affected all the sectors of our economy and the same with the case of the tourism sector. The rental car business is down because of COVID-19. And that puts additional pressure on the auto industry, which provides the vehicles. That is quite an important sector for Pakistan and it includes many subsectors in it. All the subsectors have to work effectively in order to make the others parts work properly to produce desired outcomes. Car rental services are one of these sectors that need to work properly in order to make our tourism sector work desirably. But along with the other sectors, this sector has suffered a lot as well and none of the authorities is willing to take any step to improve its performance.

Covid-19 has both positive and negative impacts on the car rental business and we will discuss both of these points with you.

Positive impacts on Car rental business

  1. Increased demand:

The outbreak of the pandemic and increased awareness among the customers related to hygiene and their health tends to move the customers towards the rental car businesses. The unhygienic and worst conditions f our public transport is the main reason for it that makes people to think twice while traveling through a bus.

  1. Less competition:

As the pandemic is prevailing in the world since the year 2019. And till now we have experienced that many car rental businesses got bankrupted during this time period that makes them shut down the business. This situation is taken as an opportunity by the other car rental businesses in the market to gain more profit by demanding the price of their own choice due to less competition in car rental markets.

Currently, in covid 19, online reservation also serves a variety of purposes, such as verifying the renter’s documents, offering information to the renter regarding the car, services such as dropping off and picking up the rental car at a specific location, signing contracts electronically, and cashless transactions.

Negative impacts on Car rental business

Along with the positive impact it has negatively affected the car rental markets as well like:

  1. Low Economy:

No doubt that covid-19 has increased the demand of car rental businesses but the scenario is totally different in some of the other areas. Like here are some firms in the market that have faced a sudden downfall in their markets. The reason for it is seized of the flight operation due to which there was lack of tourists in the market. Who need to use these vehicles more than the local public. Due to which some companies have to face a shutdown situation that has adversely affected the national income of our country.

  1. Uncertain lockdown:

The uncertain lockdown conditions are the main disadvantage of the covid-1 situation that has left a long-lasting effect on these businesses. Uncertain lockdown makes the people realize that they don’t have to go outside, they can do all of their work from home or can get anything of need at their doorstep by the mobile apps. The Lockdown situation has also made many chauffeurs quit their jobs due to lesser salaries due to which some companies have to hire some seasonal chauffeurs who cost them more than before which makes the cost of car rental high and unaffordable for the customers. As well due to lockdown car, rental drivers are now hand to mouth in many developing countries. Driver’s unemployment is another factor that is getting increasing day by day.

  1. Low availability of cars:

The next main reason of the downfall of this market is the availability of lesser cars in the market as many of the cars sold out by these agencies at the start of the pandemic due to lesser demand at low prices. Now at the time of higher demand due to unavailability of supply of raw material the manufacturers are unable to manufacture more cars. That is the big reason for the crash of this market.

  1. Low cost vehicles:

Many other vehicles apps like that of Uber, Haririi, Bykea, and Crème have acted as the rival of car rental companies. The reason if it is that now due to lower fares many customers prefer to travel by these apps instead of rental cars.

Car rental companies got affected both positively and negatively. But, in order to be a leader of the market these agencies, need to work harder and they need to provide all possible services to their customers. All the required services are fully available to the customers at Haririi rent a car Lahore where you can find your dream car at affordable rates with all possible services of our experts.