At Rental, we just wrapped up our “state of the industry” issue, so it’s appropriate to not only take a look at where things stand right now, but to also ask where things are going.
This very topic happened to be the subject of a panel discussion at the annual IPAF Summit held in Miami in March. The question “Is your company ready for 2028?” was posed to a panel which included a selection of industry stakeholders, including Dan Kaplan, CEO of Daniel Kaplan Associates and past president of Hertz Equipment Rental Corp.
All of the comments expressed by the panel were thought provoking, as they invited us to imagine a future where things like the Internet of Things, virtual reality and artificial intelligence will play a significant role in how we do business. As exciting as those ideas are, I find myself stuck on something Kaplan said.
“We’ll see a total change in the rental industry in 10 years. It will be dominated by extremely large players and a severe reduction of independents,” he said, predicting small companies located within a 15-mile radius of national chain outlets will stand no chance of survival. “They won’t be able to compete with the national accounts, who will offer pricing and service that nobody can match... they’ll be so sophisticated, so good.”
He went on to say, “It’s not going to be simple. You’re going to have to bring up the standards of what you’re doing to compete. The question is whether you can get to those standards unless you’ve got scale. You’ll have to be determined.”
Determination will no doubt be a key factor among successful rental companies 10 years in the future, as it always has been. But I disagree with Kaplan’s predictions for a future where independent rental companies are scarce. Currently, United Rentals, the industry’s largest player, still makes up less than 20 percent of the US market. The industry remains highly fragmented, and while that could change somewhat, so much of rental’s customer base is and will be made up of small to mid-size contractors in underdeveloped markets that have so far remained off the radar to the nationals.
Yes, independent rental companies will need to up their game to compete in the future, there’s no question. They’ll benefit from finding a niche and they’ll need to embrace technology in order to stay relevant, but to say they can’t survive goes against the very entrepreneurial spirit the industry was built and thrives upon. What do you think? Let us know at [email protected]
