Insights for Entrepreneurs

How to Start a Car Rental Business: A Perfect Hands-on Guide

Glory Simmons

27 Apr 2023 on Insights for Entrepreneurs · 6 min read

car rental business

6 min read

Urban people are well-used to car booking applications. They rent a car and plan their trip and love to spend a cool and safe journey. Owning a car has always been a secondary plan for all as there are many inconveniences in owning one.

People need to drive their cars in heavy traffic areas, should find a parking place, should spend on general maintenance, and many more. This is why, today car rental business is gaining more popularity in all major and densely populated countries.

The car rental market is facing exponential growth as it is expected to reach 291.5 million by the end of 2023. The growth in the travel and tourism industry is one of the main reasons for this tremendous growth.

Are you planning to develop a car rental marketplace platform? You will get complete knowledge about the car rental marketplace development process. First, let us check out how the car rental business works.

Learn about the car rental business model

Three types of users are involved in the car rental business, who is the business owner (Admin), the car owner, and the rentee (passenger). The entire car rental business model along with all user types is explained below.

  • Car owners will register themselves with the car rental marketplace and will give complete details about their cars.
  • The admin of the platform will authenticate the vehicle along with the license and can either approve or reject them.
  • The rentee will register with the platform and will search the listing and find the car for rental. The rentee will select the duration of the travel and the type of vehicle.
  • Once the rental car is selected, the rentee will book the car and will pay the charge along with the security deposit through the car booking app.
  • The car owner and the rentee will be able to communicate with each other and will share the address details for pickup/drop.
  • The admin will deduct his commission value from the payment received through the platform and will transfer the rest to the concerned car owner.
  • Once the rental trip is completed and the car is handed over to the car owner, the car is inspected for any damage. If there is any damage then the repairing charges will be deducted from the security deposit, else the deposit amount will be refunded to the Rentee.

How to build a car rental marketplace?

Developing a car rental marketplace needs high-technical skills, determination, and a deep understanding of the car rental industry. Here we have listed down the steps involved in building a car rental marketplace.

car rental business

Research the market – This is the basic aspect you need to do before you start your car rental business. Know more about your target audience, the pain points in the business, and many more.

Choose the right car rental script This is one of the highly used methods to create a car rental marketplace. There are many reliable car rental scripts available in the market. Choose the best car rental script with more positive reviews.

Integrate payment system – Your platform needs to have secured payment gateways that will let renters pay online and book the car for rent. Check the integration follows all security protocols.

Partner with car rental companies – Still there are car owners who are doing the rental business offline. You can join them and let them register with your platform to start getting rental orders.

Launch the platform – By getting support from a hosting service provider, you can launch your platform online. Before you choose your hosting service provider, check the tariff and features they offer. Compare with others and select the one that suits your business.

Extensive features involved in developing a car rental marketplace

As we already discussed, the car rental marketplace involves the admin, car owners, and renters. Each user group should have a dedicated feature set that will satisfy their purpose of using the car rental platform. Let us identify each user’s features in detail.

Car rental marketplace development – rentee app

Registration with a two-factor authorizationThe rentee needs to register with the platform and authorization is very essential as the rentee will be handling costly cars for their trip. A two-way authorization is required to assure the robust security of sensitive data.
Ride customizationRenters can customize their ride by choosing multiple factors like payment method, pick-up/drop location, car type, date and time of the trip, language, driver gender, and many more.
Booking/cancellationThe rentee after finding the right vehicle can book the car for the trip and in rare cases, he should be able to cancel his booking without hassle.
Live vehicle trackingThe rentee should be able to track the vehicle as he is responsible for the vehicle. He needs to hand over the vehicle to the owner after the trip.
Multiple payment optionsThe rentee should be provided multiple payment options like choosing their credit or debit card for paying, or any of their existing UPI to transfer payment online.
Booking historyThe rentee should have a separate account where he can check his booking history and all payment transaction details.
Push notificationThe platform needs to send a notification to the Rentee regarding vehicle tracking, system updates, customer loyalty programs, and many more.
In-app chattingCommunication support is very essential on any rentee app. The rentee needs to chat or call the concerned car owner to clear his doubts, or sometimes they may need to talk to the platform admin to raise any complaints.
Reviews and ratingsEvery rentee will expect this particular feature as this will give them the privilege of sharing their feedback about the service, they received through the car rental marketplace.

Car rental marketplace development – car owner app

Two-factor authorizationThe car owner while registering with the platform needs to pass two-factor authorization. To avoid fraud entering the platform this authorization method is very essential in your car rental marketplace
Car owner accreditationCar owners need to submit documents related to their vehicles like driving licenses and other registration certifications. The admin will verify those documents and validate them.
Ride managementCar owners can accept or reject any vehicle request made by the rentee. They can also set their order status as per the processing. They can check all their previous orders, completed orders, in-process orders, and booked orders.
Withdrawal requestAs the payment from the rentee reaches the admin’s account, the admin will deduct the commission from that amount. The rest of the amount will be transferred to the concerned car owner's account on a withdrawal request.
Route optimizationAny successful car rental app should contain this feature that will help the car owner to optimize the route. With this feature, they can identify traffic jams, and get the best route to reach their destination.

Car rental marketplace development – the admin panel

Content managementThe admin will have the entire control over the application and he should be able to revise the content of the platform whenever needed. Content management is very essential as it has the power to grab the attention of the audience.
Interactive DashboardAdmin will get clear insights about the entire platform performance through an interactive dashboard. He should be able to view all in-app activities, trip details, income and expenses, complaints and issues, and many more.
Car owner managementThe admin needs to approve or reject any car owner who is willing to register with the app. He should be able to authorize his registration and should validate all his documents.
Rentee managementThe admin needs to approve or reject any rentee who wants to register with the app. The admin should authorize the rentee’s registration.
Revenue managementThe platform will have multiple revenue channels and the admin need to manage all channels and also should efficiently handle the commission amount.
Push notificationThe admin needs to send a notification to car owners and renters regarding their orders and trip details. Also, there can be any updates in the platform that needs to be informed through the push notification feature.
Geo-location settingThe admin needs to fix the boundary within which his service will be available to users.
Rating and reviewsThe admin needs to check the ratings and reviews given by the rentee that will reflect the service offered by the platform. This will help the admin to improvise his business performance.
Analytics and ReportingThis is the best part for any admin to run his business effectively. With proper and advanced analytics and reporting features, the admin can gain better insights that will support the business to have a seamless operation.

How does the car rental business make revenue?

Multiple revenue streams are integrated with the car rental business that will help the admin of the platform earn good income through this business.

Commission from rentee – For each trip the rentee book through the app, they need to pay a service charge to the platform. Depending on the trip distances, duration of the trip, vehicle type, and many more, the service charge varies accordingly. Even when the rentee cancels the trip then the cancellation charges are deducted from the payment made by the rentee.

Commission from car owners – On every trip completion, when the platform receives the payment from the rentee, the admin will deduct a particular percentage as commission from the payment and then will transfer the rest to the car owner. The commission percentage can be fixed or can vary according to the trip value.

Surge pricing – Rentees will be charged an extra amount during holidays and on seasonal periods. Also, in cases like a heavy traffic jams, bad weather, or high demand, they need to pay more than usual pricing.

Featured listing – This is another method of increasing the revenue as some car owners may be interested to get more bookings. So, they may want their cars to be listed on the top of the homepage. For this listing, the admin can charge an additional amount from the car owners.

Subscription-based fee – Some car owners may not be interested in paying a commission on each trip they make through the app. In this case, they may prefer to pay a certain amount as a subscription fee on a monthly or yearly basis and can have unlimited trips throughout the subscription.

In-app advertisements – Third-party advertisements are allowed within the app that will let the advertisers have visitors to their brand. For each click on the ad, the admin will get the amount to his account.

Get expert help in building a car rental marketplace platform

Hope you are clear with the functioning of a car rental business along with the essential features needed to build the app. You have also learned about how to make money through your car rental marketplace platform. Now the rest of the car rental business process completely relies on the car rental application you are going to use.

Appkodes can assist you in building a perfect and reliable car rental marketplace with all salient features. You can get 24/7 support assistance from our customer support team and can get the most prominent car rental booking script with a one-time investment.

Our rental script will help you to instantly launch your car rental business and supports you in getting the audience to your platform. All features are technology-enabled and you can easily gain better returns in a very short period.

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Glory is a creative content writer whose writing has a deep connection with users and can provide SEO-friendly tech-driven content. Being a freelance content writer, all her writings meet the demands of any online business, solopreneur, start-up, and brand.