Why Isn't Every Rental Car a Hybrid?

This week, I found myself needing to rent a car for a Mother-Daughter belated 13th birthday trip. We will be covering nearly 1,000 miles visiting family, so I wanted a hybrid. I started at the aggregators. You could specify pickup trucks, SUVs, convertibles, luxury, transmission types and even the number of doors - but not a hybrid, let alone electric. I tried a search and while lots of search links suggested hybrids, when you followed it through, no hybrids. I finally decided to try the car rental sites directly and finally, on the Budget site, found a way to specify a hybrid. Fingers crossed it will actually be there.

But it got me thinking, what would the environmental benefit be if the DEFAULT rental car options were hybrids? In many environmental choices, one of the most powerful drivers of change is to modify the default. People generally stick to the default -- whether it’s appliance or computer settings or likely, car rental choices.

It turns out it would be rather dramatic. Here in the US, there are approximately 2 million rental cars and the industry has 81% utilization. The average rented car is driven about 100 miles per day. That’s approximately 51 billion miles driven per year at an average of 25 miles per gallon or 2.4B gallons of gas. The top 30 hybrids average 50 miles per gallon. So change the default and that would cut the gas emissions associated with the rental car industry by approximately half (with some adjustments for those who opt for speciality combustion engine options). You know what we need to do by 2030? Cut emissions in half. In one fell swoop, the entire industry could hit that goal for one of their most material impacts.

Now, my friends at the rental car companies would likely point out that hybrids cost more and that is true, for now. But if the industry switches and that much volume goes to hybrids for the manufacturers, guess what should come down? The cost of hybrids. Guess who benefits from that? Everyone. That could drive hybrid ownership higher, which catalyzes an additional drop in emissions. In addition, rental car companies tend to sell their cars after they hit 50K miles, so that would put more hybrids into the affordable used car market. A few years from now when the infrastructure is ready, the rental car companies could do the same “one fell swoop switch” with electric vehicles and have a huge positive ripple effect as well.

So how do you get this industry to make this conceptually simple, high impact default change? It’s a dilemma. No one company wants to go first because so much business is driven by cut-throat pricing on the aggregators. If only one company makes the plunge, the cost of hybrids will stay higher, thus rates are higher, or profits drop, and that’s tough to take on.

Regulation is one approach that levels the playing field. But wouldn’t it be far preferable for the biggest rental companies to come together, sit down with the automakers, and say “we are going to make this switch as an industry, collectively, in 2023. Help us make this work.” Perhaps there are incentives to encourage it and to help offset the transition costs. I’ve seen this system level collaboration work for issues like cup recyclability, funding recycling infrastructure, and ending plastic waste.

Trying to rent a hybrid, or make any other sustainable choice, just shouldn't be so hard. Worse, by making it such a challenge, we lull ourselves into thinking there isn’t the demand. My guess is that the rental car companies don’t think people want hybrids. But if there is no way to specify that option on the aggregators that drive most of the traffic, how would they even know the trendline?

That said, it’s best when the sustainable choice is the default choice. When you don’t even have to think about it. To quote Jeffrey Swartz, the former CEO of Timberland, “sustainability should be the gift with purchase.”