The construction equipment rental industry is a $40 billion per year industry, which has not changed tremendously over the past number years. Contractors have typically rented equipment from a retail rental company with few other options. With the construction industry’s recent engagement in emerging technology, many areas, including equipment rental, are beginning to evolve.
This emerging trend in equipment rental is beginning to gain ground in the construction industry. The trend attempts to maximize the Airbnb “sharing” economy model in the heavy equipment rental business. Several startup companies (Shared Equipment, DOZR and Yard Club) have developed and launched web technology to accomplish “peer-to-peer” rental of construction equipment.
This technology allows contractors with equipment sitting idle in their yard to easily rent the equipment to other contractors. It also allows them to complete the transaction via mobile device, smartphone or computer. Peer-to-peer rental helps address the “purchase versus renting” conundrum faced by many contractors.
If a contractor purchases an expensive piece of equipment for a specialty job that may only be used for several months, a contractor peer-to-peer rental site would let them earn income from the equipment, rather than letting it sit idle. The technology also allows a contractor in need of a specialty piece of equipment to easily rent it from another contractor who has it.
The web-based applications match the renter with the rentee in a simple, quick process. Those that manage this technology tout they simplify the process by handling the platform for posting, describing the equipment, defining availability, pricing the rentals and processing all payments. The companies also state they handle all the equipment logistics, delivery and maintenance. Insurance continues to be a concern considering only one of the startups state they provide insurance coverages. DOZR is using it as a differentiator but other peer-to-peer rental companies say proper coverages are in place.
To help ensure the condition of the equipment is maintained, the peer-to-peer rental companies state they rely on a peer rating system that’s completed by the lenders and renters. They believe this rating will incentivize all to maintain equipment on both ends of the transaction.
All of the startups claim to be 30 percent to 40 percent less expensive than the retail rental market.
You may not have seen these types of rentals in the field, but it’s good to know they are out there, are growing and can impact the exposures your contractors have.
