Avis Budget Group's revenue dipped 1 percent year over year
to $1.9 billion in the fourth quarter as the car rental supplier commercial volume and pricing declined.
In the Americas, commercial rental days and pricing each decreased
2 percent, president and CFO David Wyshner said. While he cited the U.S.
presidential election as one factor in the dip in volume, the decline in
pricing surprised him, largely because of too much fleet in the industry
overall.
CEO Larry De Shon said, "Faced with the decision to
chase low-price business or get out of fleet, we chose to hold the line."
Overall in the Americas, pricing and rental days each decreased
1 percent year over year in the fourth quarter, though for the full year,
pricing was flat. Over-fleeting has continued into this year, and pricing is
unlikely to increase this quarter, Wyshner said.
Outside the Americas, rental days increased 3 percent year
over year during the fourth quarter, but pricing declined 5 percent amid stiff
competition, De Shon said. Commercial volume growth in Spain, Australia and New
Zealand helped boost volume, but commercial volume in Germany and the U.K.,
however, were soft, he said.
This year, Avis Budget hopes to boost overall revenue via
emerging partnerships with sharing economy suppliers. Earlier this month, the
company signed an agreement with Uber Technologies to supply drivers with
Zipcars. Avis Budget is testing the program in Boston and on a smaller scale in
London but might grow it, according to De Shon. "There are some good
synergies that on-demand drivers may have versus the times the usual Zipcar
members are taking the fleet out," he said. "It's early, but we do
have other markets we're looking at if this market goes well."
Last year, Avis Budget signed a partnership agreement with
China-based ride-hailing service Didi Chuxing to coordinate technology and
marketing resources, including letting registered Didi users book Avis Budget
rentals from the Didi mobile app.
Wyshner
noted that while the rise of ride-hailing services has affected short-term
rentals in a few markets, the platforms largely are not a direct competitor to
Avis Budget. One-day rentals, the use case in which it would be easiest to
eschew a rental car in favor of relying on ride-hailing services, make up a
small percentage of overall volume, he said.