Why Car Subscription Businesses Need More Than Just Rental Software

Managing car subscriptions with rental software is like using a street directory in the era of GPS—it's out-of-date and has a hard time keeping up with how we move around now.

Brandon Tsang

Senior Product Manager
 @ Loopit.co

Published on 

June 17, 2024


Last updated on 

June 18, 2024

Key Takeaways

  • Traditional car rental software can't match the subscription model's need for flexibility and customer-centric features.
  • Building long-term relationships requires sophisticated CRM integral to subscription software, not present in rental systems.
  • Subscription software provides tailored maintenance and fleet optimization essential for sustained efficiency and vehicle reliability.
  • Investing in scalable subscription software prepares businesses for evolving market demands, offering a competitive edge in the mobility industry.

As someone deeply involved in the mobility industry, I've witnessed firsthand how businesses attempt to launch next-gen mobility models like car subscriptions using legacy rental software.

These companies often struggle to stay on top of the administrative overheads, facing inefficiencies and operational challenges that hinder their success. While both car rental and car subscription services provide access to vehicles without the burdens of ownership, the operational requirements of these models differ significantly.

As companies venture into this promising terrain, many are discovering that conventional rental software falls short in supporting the intricate demands of subscription-based models.

Here's a deep dive into why specialized car subscription software is not just beneficial but critical for the success of these ventures.

1. Contract Management: Complexity Beyond Rentals

The backbone of any subscription model lies in its ability to manage complex, often long-term contracts that significantly depart from the straightforward, short-term agreements facilitated by car rental software.

Subscription contracts encompass more than just vehicle usage; they include tier-based pricing, vehicle swaps, and bundled services such as insurance and maintenance.

Traditional rental systems lack the sophistication to accommodate these nuances, underscoring the need for tailored subscription software that ensures clarity, flexibility, and compliance for operators and subscribers alike.

2. Billing and Invoicing: More Than Just Transactions

Subscription models thrive on their ability to offer flexible, recurring billing options that resonate with the modern consumer's desire for simplicity and transparency.

Unlike the one-time, upfront payment structure of rentals, subscriptions may involve variable charges based on usage, tier changes, or additional services availed.

Car subscription software is equipped with dynamic, automated billing systems that capably handle these complexities, ensuring a seamless financial process and bolstering customer satisfaction.

3. Customer Relationship Management (CRM): Building Long-Term Relationships

The transactional nature of car rentals necessitates only basic CRM functionalities. In contrast, subscriptions are predicated on fostering long-term customer relationships, requiring sophisticated CRM tools that provide insights into customer preferences, enable personalized communications, and help maintain high levels of engagement and loyalty over time.

Car rental software often falls short in this domain, highlighting the importance of a subscription-specific platform that can cultivate and nurture valuable long-term customer relationships.

4. Maintenance and Service Scheduling: Ensuring Long-Term Vehicle Health

Maintaining the health and availability of a subscription fleet demands more than the rudimentary maintenance tracking offered by most rental systems.

Subscription vehicles, which remain under the purview of the service for longer periods, require detailed scheduling for regular maintenance, repairs, and check-ups to ensure their longevity and reliability.

Subscription software provides comprehensive tools for effective fleet management, integrating service schedules, reminders, and history tracking that are essential for sustaining vehicle quality and subscriber trust.

5. Fleet Utilization and Optimization: Maximizing Long-Term Efficiency

While rental software optimizes for high turnover and immediate availability, subscription models require a more nuanced approach to fleet management.

Subscription services must balance vehicle usage, subscriber preferences, and fleet rotation to maintain an efficient and customer-centric operation.

Advanced subscription software includes capabilities for long-term planning, lifecycle management, and utilization optimization, enabling businesses to meet these challenges head-on and deliver exceptional service.

The Adaptivity Advantage of Car Subscription Platforms

Interestingly, car subscription platforms offer a level of adaptability and flexibility that can accommodate both subscription and rental models, along with next-gen mobility models such as micro leasing: a versatility not found in traditional rental systems.

Built with the future in mind, these platforms can pivot and scale according to market demands, ensuring businesses remain at the cutting edge of mobility solutions.

In contrast, car rental platforms, often constrained by obsolete technologies and inflexible architectures, struggle to align with the dynamic, customer-driven ethos of subscription services, leading to inefficiencies and a diminished user experience.

The shift toward car subscription services is indicative of a broader change in consumer preferences towards flexibility, convenience, and value.

As automotive professionals, recognizing and adapting to these shifts by investing in specialized car subscription software is crucial.

Such platforms not only streamline operations but also enhance the customer journey, laying the foundation for sustained success in the modern mobility landscape.

Embracing this innovative, customer-centric approach will ensure businesses remain competitive and responsive to the evolving needs of today’s and tomorrow’s drivers.

About the author
Brandon is the Senior Product Manager at Loopit. A product evangelist who was responsible for creating the product roadmaps for Carsguide and Autotrader , Brandon also possesses a strong background in brand management, consulting and change management.
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