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From as little as R1, South Africans can now hire a car in Johannesburg, Cape Town, Durban, Port Elizabeth, East London, Margate, Newcastle and Richards Bay for one-way travel to or from these locations.
All that is required is that they need to be older than 18 years and in possession of a valid driver’s licence.
Started in New Zealand ten years ago and later rolled out in Australia and North America, Transfercar is a rental car relocation marketplace that connects car rental companies wanting to transfer cars between their branches with customers who happen to be, or are interested in, heading in a branch’s direction.
Transfercar co-founder Brian Karlson observed how tourists often flew to New Zealand’s North Island before driving to the South Island and catching a flight home, leaving excess cars on the last-visited island.
This surplus of vehicles available for hire in a particular location points to the headache often experienced by car rental agencies, whereby travellers hire vehicles in one city only to end their journey in another.
The hired car is essentially then stuck at that particular lot until another traveller comes along looking for the same type of car.
Or, as per the standard industry practice, the rental company would have to get the car delivered back to the destination of origin, incurring costs.
A classic scenario in South Africa is that of international tourists touching down at OR Tambo International Airport.
They pick up their rented car to see the northern parts of the country for the safari leg of their holiday, driving down to the coast for the last part of the holiday, only to fly out to their respective home countries from Durban’s King Shaka International Airport or Cape Town International.
At the time of writing, for instance, Transfercar’s local website showed 61 vehicles available for hire at R1 – with a surplus of vehicles available in Durban, ranging from Toyota Corollas to RAV4s and Avanzas.
Transfercar addresses the challenge of relocating these surplus rental cars.
The concept
“We realised there is a similar need to what exists in Australia and New Zealand because seasonal tourism causes specific fleet movements. We thought we should bring the benefits of our win-win solution to South Africans,” says Pascal Languillon, Transfercar’s chief marketing officer.
The Transfercar concept entails a rental company getting a customer to drive the car to a particular destination, with the customer getting an almost free one-way trip.
If the driver is lucky, they will receive the car with a full tank, otherwise they would have to foot the fuel bill themselves.
In all other instances, Transfercar works exactly like a standard rental. In addition to a valid driver’s licence, a credit card is also needed to secure a booking.
In the event that the driver fails to pick up the vehicle (which is considered a serious breach of Transfercar’s terms and conditions), a R1 000 no-show penalty will be charged.
Should the driver cancel the trip, a cancellation fee of between R250 and R500 will be charged, depending on how far in advance the cancellation was made.
The cars can also be used for up to three days without incurring any rental fees.
Some Transfercar rentals give the driver the option to rent the car for an additional few days at a low rate.
The only requirement is that the car must be dropped off before a predetermined date.
And apart from having to cover fuel, the driver may have to pay for insurance if it is not covered by the rental operator.
But if the rental operator must charge a daily insurance fee, Transfercar says that this charge is limited to a maximum of R50 per day.
Languillon says that SA’s first-ever relocation driver was a woman who drove a car from Port Elizabeth to Cape Town.
Since then, “the concept has been received very well so far. People are obviously pleased to have a new option for cheap travel within the country. We are pleased with the levels of registrations and bookings.”
Though Languillon cannot comment on the specific numbers, he says that the levels of registrations and bookings are “still modest”.
Since starting out over ten years ago, Languillon says some of the biggest challenges Transfercar has had to grapple with as a disruptor in the car rental industry was having to convince rental car companies to let people drive their fleet for free.
“But once rental car companies realised how much money they can save with our solution, it’s a no-brainer,” he says.
The marketplace has only a few smaller competitors worldwide, such as iMoova and Jucy.
Both offer car relocation at low-priced deals when a rental company needs to move a vehicle from one rental office to another, one way.
On what sets Transfercar apart from its competitors, Languillon tells finweek that “what truly differentiates us is the ease of use of our platform for both our clients, the rental companies, and the end users, such as the drivers.”
Transfercar is running a trial phase with one of SA’s large car rental companies and can’t disclose the name of the partner due to confidentiality agreement issues.
This article originally appeared in the 12 December edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
