- Over-fleeting is still a pain point.

The specter of over-fleeting never really leaves the industry’s shoulder, save perhaps during the Recession. (Is that what it takes to constrict fleet?) On its call, Avis more than once decried “over-fleeting among our competitors” as a driver of softer pricing, volume, and revenue in the quarter.

Yes, rates have been pretty dismal recently overall. Our February airport rate survey shows a widening negative gap compared to last year. But the first quarter is always the lightest from a volume standpoint. Let’s see if this can get fixed for summer.

Both Avis and Hertz are hopeful that their “new” revenue management systems will optimize demand, yield, and pricing. Avis said that it was rolling out its system’s second phase — a demand forecaster — yet we heard the same language way back in its 2015 second quarter call regarding phase two rollout. Could it be taking this long to get right?

Hertz is working toward upgrading its fleet and balancing its mix, particularly away from compacts with lower residuals. The process is needed, but it’s not optimal from a fleet-capacity standpoint.

Both Avis and Hertz are migrating to more risk vehicles, which deliver better holding costs than program cars. However, Avis made the point that risk vehicles stay in fleet longer, which results in lower utilization, and doesn’t help fleeting compared to demand. The continuing high number of recalls isn’t helping either, as grounded recall units are factored into utilization percentages.

- Commercial volume – what’s the real story?

For Avis, domestic revenue was down in the quarter, driven primarily by a drop in commercial rental days. Hertz also expressed “disappointment” with the continued softness of its corporate accounts.

Avis blamed much of this softness on calendar shifts and the November elections, which had a more pronounced impact on travel than in previous election years, the company said. (However, the U.S. Travel Association’s Travel Trends Index reported a rise in business travel in November, more than expected.)

Corporate pricing, particularly contracted business, has been under pressure for years. New pressure has also come from ride-hailing companies Uber and Lyft, though the effect has been hard to define. From recent surveys on corporate expensing and anecdotally, business travelers are shifting to Uber and Lyft to get around in cities.

On questioning, Avis said that certain markets may be impacted when it comes to (less profitable) one-day rentals fewer than 75 miles. Avis said its average rental is four days and 450 miles — which would be predominantly leisure travel, of which a traditional rental is better suited to service.

- Let’s keep an eye on Florida.

If Florida fell into the ocean, the car rental industry would lose close to 20% of its domestic revenue.

Avis attributed almost half of its decline in overall pricing to weakness in Florida, where over supply was an issue, too. Hertz stated that a milder winter may have affected demand to sun destinations such as Florida, which contributed to more competitive pricing there.

International travelers are a big economic engine in Florida. Brazil’s economic woes had visibly hurt Florida with fewer travelers, though Brazil’s economy is stabilizing. The bigger issue could be the Federal Reserve’s decision to increase the benchmark interest rate. This singles a stronger dollar versus other currencies, making a U.S. holiday more expensive.

We’ll keep a close look on Florida’s reservation build as summer approaches.

- “Mobility” is officially a car rental catchword.

The latest meaning of the word “mobility” — new transportation modes, on-demand service, connected vehicles, and infrastructure leading down the path to autonomous vehicles — is creeping into the car rental vernacular. Avis mentioned mobility nine times in its call, compared to a few times in the previous call and hardly at all before that.

Avis is now stating as a corporate goal to position itself for success in the new mobility landscape. The company is expanding Zipcar’s one-way and free-floating offerings, important moves to grow carsharing. Avis is also refining its Avis Now offering, which controls the entire rental process through a smartphone app. Avis Now has processed 300,000 self-service transactions in eight months.

For Hertz, the closest thing to a publicly available mobility offering could be its Ultimate Choice program, which allows airport customers to choose their vehicle on-site with no wait. Hertz expects this program to be available in all major airports by year-end.

On-demand transportation is dependent on fast response times; any efficiency improvement in the car rental process is a great step.