Auto Rental News<\/em> caught up with Jason Kennedy, president of Gateway Auto Holdings.\u00a0The company exclusively rents electric vehicles in Southern California, and ARN\u00a0<\/em>learned about his first-hand experience.<\/p>\n Kennedy rents Teslas specifically \u2014 Model X, Model S, and Model 3. He wants his rental operation to be seen as a traditional car rental company, \u201cbecause that\u2019s what we do; we only rent cars, there\u2019s not a huge mobility movement that we\u2019re creating here, it\u2019s just the propulsion of the vehicle is electric,\u201d he says.<\/p>\n With the vehicle supply shortage, amidst other rising costs, it\u2019s a good time for rental operators, particularly independents, to get into Teslas\u2014 as the brand\u2019s one-price system and lack of volume discounts are a closer match to what rental operators are paying for traditional vehicles today. That one price is the same for major car rental companies and smaller operations.<\/p>\n As far as ownership costs and profitability, Kennedy believes that the Model 3, with a higher initial cost, can pencil out against more mainstream vehicles. This comes down to his ability to command a higher daily rate, operator\u2019s savings on maintenance, and the Model 3\u2019s tremendous resale value.<\/p>\n And by running mostly Teslas, he can carry more parts inventory on hand to use as necessary. He does budget for a set of tires, as EVs are heavier and go through them quicker.<\/p>\n Kennedy believes that with less maintenance needs, that EVs can stay in his fleet for longer than the traditional rental lifecycle. He keeps the Teslas in pristine condition, and most renters won\u2019t know the difference between model years. Plus, over-the-air updates constantly refresh the tech and can even manage some repairs.<\/p>\n Kennedy finds that renting EVs allows him to forego the traditional brick-and-mortar office with a counter, an agent, and a key handoff. Gateway mostly follows a contactless rental experience<\/a> whereby the customer reserves a car online, completes paperwork electronically, and receives remote access to the vehicle after choosing where it should be delivered.<\/p>\n \u201cElectric mobility and the electric rental business \u2014 and Tesla specifically \u2014 allow you a lot of freedom to do that,\u201d he says.<\/p>\n Kennedy is clearly a fan of Tesla, mentioning their value is largely in the vehicles\u2019 intuitive user experience. \u201cYou can basically walk up to them, step in, and drive away with the car,\u201d he says.<\/p>\n The Tesla, with no power button, has a slight learning curve to the average renter, though, meaning the operator needs to teach customers who\u2019ve never been in such a technologically advanced vehicle that it\u2019s intuitive, logical, and can be as simple as they want it to be.<\/p>\n Some may want to get in and drive away, and others may want to get into the weeds with the infotainment system and really experience the vehicle. Either way, \u201cthey get you from point A to point B quietly, quickly, and in a nice, clean way.\u201d<\/p>\n \u201cWe really want the customer to fully understand the vehicle, and we go through probably more rigorous explanation than needs to happen,\u201d he adds. \u201cNow everyone\u2019s on YouTube, everyone can Google how to start (a Tesla). So there is this part of me that knows that the customers don\u2019t need me to explain everything to them, but I know they appreciate it because they\u2019ve told us.\u201d<\/p>\n The most important thing to educate the car renter on is the vehicle\u2019s safety features, though. For Teslas, users will need to understand how to operate the autopilot technology and all that comes with proper and safe operation of such a feature \u2014 especially that the driver is ultimately responsible for the vehicle. Kennedy says he will not enable the more autonomous Full Self-Driving mode.<\/p>\n Renters must carry their own insurance to rent from Gateway. \u201cBecause the LDW (loss damage waiver) that we would offer would be either cost prohibitive, or not profitable enough for our small independent fleet, we would need a larger scale to make it profitable and manage that risk ourselves,\u201d he says.<\/p>\n In the early days of gas-powered cars and before gas stations were on every corner, people simply planned their trips strategically around when and where they would need to fuel up.<\/p>\n This infancy stage is where electric vehicles are at now, Kennedy says, noting that we\u2019re gaining ground quickly. A Sept. 2021 Reuters report<\/a> estimated there are 43,000 public EV charging stations and around 120,000 charging ports in the U.S. This doesn\u2019t account for the home charging stations, either. Now, Kennedy just hopes to see incentives go to the right places.<\/p>\n Speaking of charging, one growing pain Kennedy feels is around receiving vehicles back without a full charge and renting those back out. Regarding gas-powered vehicles, the major rental companies provide a new rental with a full tank, while it varies with independent operators.<\/p>\n \u201cWhy would electricity be any different? I like to provide the customer with a full battery as often as I can, but it\u2019s not always possible,\u201d he says, adding that the issue will lessen as more public chargers come online.<\/p>\n Kennedy does include a charge fee per day in the rental contract, and cross references that against the actual cost when returned, reconciling the two and refunding the customer the difference if they used less than the charge.<\/p>\n Kennedy adds that for now, it\u2019s pretty easy to charge them while they clean the vehicle in between customers, which is usually close enough to full to rent out. In the event a vehicle comes back low and there\u2019s not enough time to recharge, Kennedy will bump the customer up to the next available model. \u201cWe don\u2019t like to do that, but I\u2019d rather have a happy customer rather than they drive 40 miles and have to charge again already; that\u2019s ridiculous,\u201d he says.<\/p>\n Of course, you don\u2019t want to have too much supply and lose money, which is why he prefers the upgrade. It\u2019s another example of a practice carried over from the major operators that just works well.<\/p>\n \n by Amanda Huggett<\/a><\/p>\nGateway\u2019s Rental Process<\/strong><\/h2>\n
Solving EV Charging<\/strong><\/h2>\n
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