Ontarians look at alternatives as car rental shortages persist, prices remain high

With car rental companies still facing a shortage of vehicles, some people are looking for different options to rent a car due to limited availability and high prices.

Peer-to-peer car rental apps have also reported a significant increase in demand this year among Canadians looking for short-term rentals using their subscription service, particularly in Ontario.

“Demand is on the rise, the supply of cars is gradually recovering from a bit tight due to all the production canceled during the pandemic, and of course, [the] The shortage of components such as semiconductors, said David Johnston, director of the George Weston 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 retaliatory travel this summer, as people looking to make up for vacations lost due to the COVID-19 pandemic are traveling in droves.

“I think this is one of those continual ripples,” he said.

Peer-to-peer car rental apps have reported a significant increase in demand this year among Canadians looking for short-term rentals using their subscription service, particularly in Ontario due to limited availability at car rental agencies. (Ben Nelms/CBC)

“As we adjust to the post-pandemic economy, a lot of these things will pass and the ripples will become smaller after a while.”

For short-term rentals, rates at Toronto Pearson International Airport can start at $120 per day for a regular sedan.

Ontarians turn to subscription rentals

Rabia Dar said she moved to Etobicoke in March thinking she wouldn’t need to own a car to get around town. Coming from the Netherlands, where she relied on public transportation, Dar said she thought she would have no reason to drive.

But after having to take trips downtown, working in the office often and wanting to go on weekend trips to explore the county, Dar decided to consider long-term car rentals.

“If I wanted to go downtown, it would take an hour by bus and then by metro, it depends on where I’m going. So having a car, I think is essential,” Dar said.

“I have plans with my friends in Ottawa, this weekend I’m going to a lavender farm. [The car] It gives me the flexibility to explore the surroundings and get to know my new home.”

Rabia Dar said she rented a car for four months from Curbo, now Roam, a subscription-based rental service, after being unable to find affordable rental options at car rental agencies. (Provided by Rabia Dar)

Dar said the cheapest price for a sedan with basic options you could find at the time was $2,000 a month. She also considered lease options, but said she didn’t want to be restricted to a minimum lease term of two to five years.

Eventually I came across, Curbo, a subscription-based 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 without a long-term commitment. Dar said she rented a 2022 sedan for four months for $1,200 a month.

Car sharing is in high demand

Canada’s largest car exchange platform, Turo, said it has seen a huge jump in demand this year for car rentals. The company connects local car owners with travelers, allowing them to rent out their personal cars through an online platform, similar to Airbnb.

Across Canada, summer bookings between May 27 and September 6 increased more than 350 percent year over year, a Turo spokesperson told CBC Toronto.

In Toronto, bookings for the same time period are up nearly 200 percent compared to last year.

Turo allows users to rent out their personal cars through an online platform, similar to Airbnb. Across Canada, summer bookings from May 27 to September 6 increased more than 350 percent year over year, a company spokesperson told CBC Toronto. (Steve Bruce/CBC)

Toro 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 percent 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 is expected to remain scarce

Some car rental companies sold out their fleet of vehicles earlier in the pandemic, and saw supply shortages as travel increased and more people started taking trips earlier this summer.

Now, some companies don’t accept bookings of three days or less, which isn’t as profitable as long-term bookings, said Craig Hirota, vice president of member services at Associated Canadian Car Rental Operators.

“In terms of rental car supply, although things could change quickly if retail demand slows, the consensus now is that supplies will remain tight for the foreseeable future,” Hirota told CBC Toronto.

“The relative dearth of new vehicle customization and supply chain issues affecting the supply of parts create cost pressures associated with vehicle maintenance and repair.”

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