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Rental Roundtable Highlights
Rental Companies Still Sorting Out Internet's Impact
 In this second CIMA Rental Roundtable, the rental giants were still sorting out exactly how the Internet will affect their business.
Internet Won't Level Playing Field
At the first rental roundtable, in 1999, some rental executives speculated that the Internet would help level the playing field between small and large companies. Martin Moore, President of GE Energy Rentals, says he's changed his mind on that point.
"I think big companies have a clear advantage," he says, in part because they have the resources to move customers to online ordering. Moore says at the time of the 1999 rental roundtable, 1% of his company's orders came via the Internet. Now that figure is 70%.
Large Companies Invest
That increase is the result of vigorous efforts by GE to get customers to conduct business online. Moore says his company registers customers to use its online system, then motivates them to use it by offering registered customers more pricing, availability and maintenance information. Other rental companies say they expect to follow GE's lead, providing incentives for customers to conduct business online.
His company expects the Internet to be the primary avenue for rental business in the future, according to Moore. "Our entire business will be performed on the Internet. Both our customers and our suppliers are going to be driven that way. And if you're not there, you're going to be left behind."
Gradual Transition
Other rental companies are also investing heavily in Internet systems. About one-third of United Rentals' 150-person technology staff is working on Internet initiatives, says United Vice Chairman John Milne.
Others don't think the transition to online business will be so dramatic. "Will 70% of my customers start doing business with us over the Internet, the way they are with GE?" asks Charles Snyder, AMECO's President. "I may be wrong, but I don't think so."
Snyder predicts the way the Internet affects the rental business will continue to change, though it will primarily be just an additional way for customers to do business with rental companies.
Awaiting Breakthrough
GE Power Systems' Internet sales success notwithstanding, some rental leaders say the Internet's impact on the industry is yet to be realized.
"There has been a lot of dot-com activity in the rental industry, but I don't think there has been a breakthrough solution yet," says Bud Howard, Senior Vice President of Sales and Marketing for RSC/Prime.
A breakthrough solution may be just around the corner and will greatly impact construction equipment rentals, says Consultant Dan Kaplan. "I think the Internet is going to change this industry more than the consolidations in 1997," he says.
Kaplan foresees online-only virtual rental companies that will link contractors that have excess equipment capacity to contractors that need the equipment. This would eliminate rental companies from some transactions.
>>Go to: Internet "intermediaries" between rental companies and customers
>>Go to: Rental companies' "wish list" to manufacturers: Internet assistance, equipment disposal top concerns
>>Go to: Internet: making business easier
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