As rental car operators continue to face vehicle shortages, some people are considering different options for renting a car due to limited availability and exorbitant prices.
Peer-to-peer car rental apps are also reporting a drastic increase in demand this year among Canadians seeking short-term rentals using their subscription service, particularly in Ontario.
“Demand is up, car supply is gradually recovering from being quite scarce due to all production being canceled during the pandemic and of course, [the] shortages of components like semiconductors,” said David Johnston, director of the George Weston Ltd Center for Sustainable Supply Chains at York University’s Schulich School of Business.
“So you have the perfect storm here.”
Johnston said the root cause of the current car rental shortages seen in Canada and around the world is revenge travel this summer, as people looking to make up for lost vacations due to the COVID-19 pandemic travel in mass.
“I think it’s one of those continuous ripples,” he said.
“As we adjust to the post-pandemic economy, a lot of these things will balance out and the ripples will subside after a while.”
For short-term rentals, rates at Toronto Pearson International Airport can start at $120 per day for a standard sedan.
Ontarians are turning to rental by subscription
Rabia Dar said she moved to Etobicoke in March, thinking she wouldn’t need to own a car to get around the city. Coming from the Netherlands, where she was dependent on public transport, Dar said she thought she would have no reason to drive.
But after having to take trips downtown, working more often in the office and wanting to go on weekends to explore the province, Dar decided to turn to long-term car rental.
“If I want to go downtown, it will take me an hour by bus and then metro and depending on where I’m going. So having a car, I think is essential,” Dar said.
“I have plans with my friends in Ottawa, I’m actually going to a lavender farm this weekend. [The car] gives me the opportunity to explore the surroundings and get to know my new home.”
Dar said the cheapest price for a sedan with basic options she could find at the time was $2,000 a month. She also looked at lease options, but said she didn’t want to be tied to a minimum lease of two to five years.
Eventually, she came across Curbo, a subscription car rental service now known as Roam that allows users in Ontario to rent a sedan or SUV with insurance, routine maintenance and roadside assistance included with no long-term commitment. term. Dar said she leased a 2022 model sedan for four months at just under $1,200 per month.
Carpooling is experiencing a massive increase in demand
Canada’s largest car-sharing platform, Turo, says it has seen a drastic increase in demand for car rentals this year. The company connects local car owners with travelers, allowing them to rent their personal vehicles through an online platform, similar to Airbnb.
Across Canada, summer bookings between May 27 and September 6 are up more than 350% year over year, a Turo spokesperson told CBC Toronto.
In Toronto, bookings over the same period are up nearly 200% over last year.
Turo said Calgary, Toronto and Montreal are the company’s top destinations this summer. Nova Scotia is the fastest growing province with summer bookings up more than 3,000% this year.
Since 2016, the company said it has expanded its car-sharing platform in Canada to more than 1.2 million members and 53,000 car rental listings across the country.
Supply should remain tight
Some car rental companies had sold their fleet of vehicles at the start of the pandemic and experienced a supply shortage as travel resumed and more people started taking trips earlier this summer.
Now, some companies aren’t accepting bookings of three days or less, which aren’t as profitable as long-term bookings, said Craig Hirota, vice president of member services for Associated Canadian Car Rental Operators.
“In terms of rental vehicle supply, while things could change quickly if retail demand slows, the current consensus is that supply will remain tight for the foreseeable future,” Hirota told CBC Toronto. .
“The relative scarcity of new vehicle allocation and supply chain issues affecting parts supply are creating cost pressures associated with maintaining and repairing vehicles.”