Top 5 challenges faced by the car rental industry in Uganda

SPECIAL FEATURE | THE INDEPENDENT | The transportation and car rental business in Africa is developing rapidly and this growth can be observed in many countries especially Namibia, Kenya, South Africa and Uganda. Many people, particularly those from the younger generations, have grown to love taking trips and travels. And indeed, having a private vehicle enhances the travel experience and fun. So, naturally, they will need one to take them around.

In Uganda, car rental is based on both short and long terms, serving different purposes but mainly tourism. Others include business, family day outs among others. However, the car rental business has never been easy, it is full of challenges.

Poor Road Network and breakdowns

Road accidents in Uganda are on the rise like never before and it is important to interrogate the major causes. Among the top causes of these accidents after bad driving is the poor road conditions.

Most of the roads in Uganda are dangerously narrow and dark and make it difficult for road users. In other cases, most of the road signs are missing and neither are most humps painted to clearly warn drivers. Some potholes have gained a perpetual status; for they will never be fixed even in Kampala and many connecting routes and feeder roads.

The bad status of the roads also increase the risks of breakdowns of the rental cars in Uganda especially underbody and this increases losses made by companies in terms of roadside assistance and rescue. However, this is not only a problem in Uganda but East Africa or Africa at large. Many companies in the region do not offer car rentals on self-drive in Kenya or Tanzania because of the high rate of breakdowns in some regions with challenging roads such as in areas of Serengeti and Maasai Mara.

Car theft

Car rental agencies are facing a challenge of security in their fleet as unscrupulous customers can turn out to be scammers some times. They disguise as good customers and end up getting away with the vehicles with just a few days rental charges. At first, these were especially from the local customers but recently, even some oversea clients have turned into scammers. The recent report of an American tourist who disappeared with a brand new Land cruiser Lx ran in the newspapers a few years back. He collaborated with local thieves to transport the car to DR Congo where such scammers find potential buyers. This limits the growth of the fleet that as well hinders the company’s growth.

Epidemics

The car rental business in Uganda has been significantly affected by epidemics, mainly the popular Covid 19 pandemic as well as the Ebola Virus on several occasions. The resulting travel restrictions and decline in disposable income pose a great challenge to the industry. A few days into the 2020 Covid 19 lockdown, car rental agencies received 90% cancellations and refund requests for the pre-booked trips in the summer that year. Reduced bookings during and after the pandemic led to reduced prices that is now stiffening competition especially on online markets.

Ebola outbreak last year in the districts of Mubende and Kasanda led to cancellation of several bookings on top of scaring away tourists that were earlier interested in renting cars to nearby safari destinations of Kibale Forest in Fort portal areas.

Rebuilding the Fleet

After the covid 19 pandemic that almost saw the business of car rental in Uganda put on a standstill for almost 2 months, operators faced a challenge of several breakdowns in their fleet that was not on use throughout that period. Crucial parts of the vehicles such as tyres, batteries among other underbodies had to be replaced as they had expired with time.

Until now as the peak tourism seasons approach, car hire companies continue grappling with challenges of sourcing new vehicles to rebuild their fleets in response to the rising demand in self drives that are on increase. Many vehicles from the fleet before lockdown had to be changed to reduce on the repair costs that saw the business not registering profits over the first year of opening the industry.

Stiff competition between Companies

The rise of new independent companies into the car rental market in Uganda has stiffened competition with old and established. This would have been good since they come up with new ideas but over the period, it is greatly affecting the quality of services offered. This kind of race between new and old agencies has lowered prices at which these services are offered in a bid to win new customers hearts.

Many of the old companies have then extended their services to nearby countries including Rwanda, Kenya and Tanzania.

Driving Challenges with Overseas Travelers

Most people that rent cars especially on self-drive in Uganda for tourism purposes are from Europe and United States of America. With their new driving experience in Uganda, there are higher chances of risk and accident with these travelers. Many of them are not aware of the traffic rules of the country and some of them are used to driving on the other side of the road. Many never drove on narrow roads with sharp turns such as those in Kisoro towards Bwindi Forest, the most recognized tourist destination in Uganda globally.

Many are used at driving on fine roads with other descent road users and these are always caught in chaos with our well known boda boda and taxi drivers that pay little or no attention to traffic rules.

Brand Awareness and promotion

Lastly, another challenge affecting agencies dealing in car rentals on the basis of self drive in Uganda is brand awareness.

There are so many new rental companies in the market and they struggle for a reputed name in the market. It’s difficult for them to find new customers on the market. Even some of the old companies also have not that much exposure especially on the local market. Brand awareness should come with quality services because a bad review about your offering can spoil your image.