Construction Equipment magazine’s Post

Transcript

Tony, we're coming across a lot more rentals for our contractors and fleet managers. One that I talked to not too long ago is, is up to 80% of the fleet is rented. Yeah, and they're all over the country. What do you think is driving this thought? We've been seeing a secular shift towards rental penetration since the Great Recession and I think just the flexibility. As contractors are more on the move or I've been the flexibility of not having the logistics to maintain their fleet to move, it really helps. And I think as machines get more and more technical, right, it always helps to have an expert that kind of take care of it. But we've seen that movement, particularly with aerial equipment kind of happening ever since the Great Recession and customers wanting to have the flexibility to to be able to variable size their cost, right? Rentals something if you're booming and flex it up or if you have a reduction in jobs, you can bring it down. And I just think the cost, right, that the competition and the economics around it, when you fully load the cost, I think there's a growing awareness that rental can actually be more economical as well and get flexibility. So all those I think drive a shift. But when we look at places like Japan and UK, they have higher penetration rates than the US. So I think there's definitely, you know, opportunity for that to continue to increase. You have some really, really cool stuff that you've shown us with the, the job boxes and the, the, the, the small tool. Holders and yeah, just the identification technology and all that how did that come about and is, is that what you would call diversifying United Rentals or how did that come about as a need? Yeah, I mean a lot of the times these innovations that you're seeing are, are functions of pain points that we've experienced working with customers throughout the years, right. So an example, the toolbox, right, customers will come to us and say listen, the reason we don't run tools is because they disappear, people use them, they rent them then. They have to pay for it and it costs too much. And so they're looking for a solution to better track, you know, who's using what to reduce shrinkage, right, to drive the overall cost. So it creates a pain point that we hear throughout the years, and then technological options start to unfold, right? Different tracking technologies and then various partners that we work with that eventually we stumble upon a prototype that works right and starts to get legs. And it's really just kind of solving a problem that we've been hearing about for a long time. But technology has kinds of moves. Fortnite solving in a way that wasn't really possible before. So that that's kind of the way we operate is, is by listening to the customers, listening for the pain points and then trying to look at available technologies, available partners that are out there that are doing things. And then how does United Reynolds find a way to put it all together? And your question about diversifying these solutions in and of themselves aren't necessarily very large revenue generators, but we see it as a way to basically support our rental business to help us add more value through the rentals that we are providing and have these. Versus work alongside them. So it's really the way we look at it is just strengthening, helping us differentiate why a customer would want to work with the United that we can provide additional value beyond just the availability and service that they put in. So it kind of has a strategic element. But over time, who knows these may end up being very large revenue and and of themselves. But for now we really see it as part of the rental bundle. If I could ask you to get your crystal ball out for a minute. Tell me a little bit about the future of the rental business. Great question. So, you know, I, I still think the future of the rental business will have a lot of similarities, you know, to what we have today. I, I still think our customers are gonna need equipment, you know, and on urgent demands. I think what will happen is it's just going to get smarter. So we're starting to see machines, you know, with telematics and, and the data that's coming off those machines provide more and more opportunities for customers to have up time to get better utilization. I think customers will potentially in some areas start becoming a little bit more. Was falling away. They plan, right, a little more forward planning and integration with rental companies so that we can like what's happening in the rental Business Today is there's a lot of urgent demands like customers will call us for something that they need tomorrow. I can see over time, you know, a bit more what I'll call planning organization around demand and linkage to rental companies. But I think in the near term, it's really around machine intelligence and being able to offer an easier kind of conversation or transaction for a customer and you think about things like AI and what that can start to do. From a customer experience perspective, the way digital can start to supplement some of those personnel touches, I think that increases it makes it easier for our customers to do business with us and you know, have a human, but also be able to work through digital platforms and easier ways. And so it'll just become more infused with digital with with data. But I think the core model itself of rental makes a lot of sense. It's a sharing economy, right? It's utilizing equipment better than that owned economy. So I still think we're going to see a growth in that core model. It'll just get. Harder and more integrated with with customers and their planning.