Opportunities & Challenges of Car Rental Mobile App Development in Emerging Markets

Most people in developed countries are familiar with car rental apps. Many developing countries have also caught up with this trend and launched such services in their countries. However, the industry has yet to penetrate various segments of society due to cultural differences, lack of awareness, people’s spending habits, and other factors. The estimated value of the global car rental industry was $129.1 billion in 2023. This figure is expected to hit $248.3 billion by 2032.

Online car rentals generate significant revenue in most geographies. For example, the Asian car rental market is projected to create 68% of revenue through online sales by 2027. The estimated market share for other regions (for the same period) includes 72% for Europe, 56% for Africa, and 10.4% for America. Hence, companies worldwide must focus on car rental mobile app development to maximize revenue.

However, developing car rental applications in emerging markets requires a robust strategy and thoughtful execution. Companies will have to face challenges such as entering a new market, understanding the target audience’s needs, competing with existing players, and getting noticed among thousands of apps on the Play Store. This blog will focus on the opportunities and challenges of mobile app car development in emerging markets. Let’s get started.

8 Challenges of Developing Mobile Car Rental Apps

Most companies face plenty of challenges during mobile car rental app development. These challenges can be unique to different companies and geographical locations. Emerging markets like the Philippines, India, Mexico, South Korea, and Turkey may pose different challenges for mobile car rental app development than car rental companies in America.

We can’t discuss the details for each country separately. However, we will discuss emerging markets’ most prominent mobile car rental app development challenges.

1. Limited Internet Connectivity
Most mobile car rental apps don’t consume much data. Still, high-speed internet is a plus when downloading large images to get real-time location information. Countries like Brazil and India have already launched 5G internet. Still, it has yet to reach places like Nepal, Bangladesh, Uganda, and Somalia, which have yet to adopt it. Car rental companies wanting to launch online rental services in such countries must work around these limitations.

2. Smartphone Penetration
Most of us are accustomed to ordering food, booking movie tickets, and using mobile apps for other services like cooking and cleaning. However, smartphone penetration is relatively low in many countries. Without smartphones, it makes no sense for companies to develop car rental apps. Hence, a car rental company must choose a location with high smartphone penetration to expand its services.

3. Diverse Payment Options
Online payment methods like Google Pay, Apple Pay, and QR codes have become common in most countries worldwide. However, the concept of digital payments is low in many countries. 84% of Morrocoans, 81% of Brazilians, 70% of South Africans, and 70% of Bulgarians use cash to pay. Without online payment, it is impossible to initiate a car rental. Hence, countries with cashless societies are conducive to mobile car rental app development.

4. Linguistic Barriers
Not every app user is comfortable with English. Many users may want to see instructions and other details in their mother tongue while using car rental mobile apps. When the app provides details in their native language, users can navigate it better and spend more time on it. Hence, companies that offer content and support in multiple languages will do better than those that only provide support in one language. However, ensuring multi-language support in a mobile app can be challenging.

5. Poor Infrastructure Setup
Countries with poor infrastructure pose formidable challenges for car rental companies. Examples of poor infrastructure include lagging internet, unreliable GPS signals, and lack of real-time traffic data. Poor internet connectivity can make it hard for users to explore car rental options, make reservations, and use advanced features. In such situations, car rental app development can be a nightmare.

Inaccurate or unreliable GPS signals can pose challenges, such as locating available vehicles for pickups, finding locations, or ensuring timely returns. Without real-time traffic data, car rental companies can’t share the estimated time for pickups and returns and suggest alternative routes.

6. Competition from Offline Players
Even if a particular country doesn’t have online car rental service providers, local players may offer offline services. Smaller and independent car rental companies may not have an online presence. Still, they may be popular due to word-of-mouth recommendations. How can mobile car rental app development give you an upper hand?

To compete with the already-established companies, new players must develop better offerings. Better services include greater convenience and transparency and a more comprehensive selection of cars.

Over time, the company must improve its services by offering better payment and insurance options, loyalty programs, and integrations with other third-party services. Implementing the above-mentioned strategies will require time, effort, and considerable investments.

7. Building User Trust
People in emerging markets may not be comfortable with online payments and using cutting-edge technology. Their lack of knowledge and awareness may lead to aversion to car rental apps. Building trust and brand recognition in such markets can be hard. Car rental companies must be patient and understand that achieving success in a new market is difficult.

Also, they may have to set aside funds for marketing and promotion. With time and continued efforts, success will follow.

8. Regulatory Hurdles
Car rental regulations differ in each country. For example, the driver’s license requirements, minimum driving age, and types of car insurance required are unique for each country. Companies should use GPS technology to determine the user’s location. Based on the user’s location, they should provide valuable information related to car rental and insurance regulations. This will ensure clear communication and adequate compliance with local laws.

8 Car Rental Opportunities in Emerging Markets

In the section above, we discussed the hurdles to developing a car rental app. Now, we will discuss the potential opportunities emerging markets offer for such applications.

1. Offline Functionality
Car rental companies need not disregard countries with slow internet. They can develop car rental apps with essential features that work even with limited internet connectivity. Although the app may lack alluring features and design, it can capture a vast market share.

2. Lite Apps
Companies should consider creating lightweight car rental apps that require less storage space and consume less data. This would encourage users with basic smartphones to install and use the app.

3. Mobile Wallet Integration
If locals do not use online payment methods, companies should consider partnering with local mobile wallet providers. They can advertise new and convenient online payment options that cater to regional preferences.

4. Multilingual Support
Attract the local community by creating a car rental app that appeals to them. Companies can make this happen by translating the app interface and the content into local languages.

5. Offline Navigation Features
Companies need not see poor internet infrastructure as a disadvantage. They can integrate offline maps and navigation features with the app to facilitate smooth navigation for users.

6. Tutorials
Provide detailed in-app tutorials and videos that teach users how to navigate and use the app. Whether its tech-savvy users or first-time users, the tutorials and videos must be helpful to all.

7. Transparency
It is crucial that companies are transparent about their data collection and sharing practices. Also, these companies should implement robust security measures to protect user data.

8. Local Partnerships
Collaborate with local car rental companies. If that option isn’t viable, create an app offering unique car rental services that stand out.

Summing Up

Developing car rental apps for emerging markets opens an endless portal of opportunities. Still, it also has its fair share of challenges. Understand that there are few sectors where competition is nil. If a company finds an untapped market, it’s a golden opportunity for them. Other companies may start their businesses later, but the trendsetter will always have an advantage.

Every business has challenges; the same applies to car rental companies. However, companies can explore emerging technologies like AI, ML, and cloud computing to launch their businesses and take them to the next level. Before developing an app for a new market, companies should lay the foundation for the business. Later, they should focus on customer needs, local preferences, and the hurdles related to creating rental apps.

If companies lack the technical expertise or experienced professionals to build a car rental app, they should consider hiring a reputable car rental app development company. Tridhya Tech has developed robust apps for companies in diverse industries.