Car rental company CarRental in Queens is scrambling to keep up with rising demand, with its biggest franchisees closing.
The Queens-based company says it has seen a drop in business over the last year and a half, with new franchisees signing up to lease out their cars to other customers.
CarRrents chief executive, David Rieger, says that has not only affected the number of cars on the lot, but also that it has been the hardest hit by a sudden downturn in car rental business in recent years.
The decline in business was caused by a number of factors, including a slowdown in the construction of new homes, he said.
CarRental is now in a situation where it cannot keep up the pace of expansion, he added.
“We’ve been working very hard to build capacity in the rental industry and the demand has increased,” he said, noting that the company had recently opened two new franchises in Queens and New Jersey.
But, he says, the rental sector has also seen a sharp drop in car rentals in recent weeks.
Rieger says the company is seeing an increase in demand for its cars, but has not yet been able to keep pace with it.
He said car rental companies have seen an average of two car rental vacancies per week since December, with an average number of new rental contracts signed up in the last six months of that time.
At the same time, he also said that CarRentals average monthly rent is now $1,500 per month.
With rental rates in the range of $400-$700 per month, that means an annual rent of around $3,000 per year.
While the company has struggled to keep a grip on the supply of cars, it does have one big help from the city.
City of Queens Mayor Jim Kenney said in an interview with the New York Post on Thursday that he expects to see a number car rental agencies come into the city and lease out cars for a long time.
“We’re seeing a lot of car rental facilities coming into the borough, and I think we’ll see a lot more car rental businesses in the borough,” Kenney told the newspaper.
Kenney said that there are currently four major car rental properties in the city, and he expects the number to grow to more than 30 in the coming years.
“When I came to office, I knew there were going to be a lot different types of businesses in this city,” Kenny said.
“But I think as the years go by, I think the industry will continue to grow and the number will continue on its upward trajectory.”