The Tasmanian government will offer grants of $1,000 to motorists who hire out their own private vehicles to tourists in an attempt to tackle the state’s hire car shortage.
- Car hire companies divested half their Tasmanian fleet during the pandemic travel restrictions
- However since October demand for hire cars from interstate tourists has outstripped supply
- The Tourism Industry Council of Tasmania has welcomed the government’s incentive scheme
Hire car companies in Tasmania sold off around half their fleet during the state’s border closure last year.
But since the state reopened its borders in October, demand for hire cars from interstate tourists has outstripped supply.
That has resulted in prices for hire cars rising significantly, with some tourists asked to pay $2,000 for seven days, and others cancelling their travel to the state altogether because they were unable to hire a vehicle.
Premier Peter Gutwein said the scheme would help tourists access affordable hire cars in the state by increasing supply by nearly 20 per cent.
“What we’ve heard is that following COVID-19 many visitors to our state struggle to access hire cars easily and at an affordable cost,” he said.
“These grants will help hire car operators re-establish their vehicle fleets in Tasmania following the COVID-19 downturn in activity and will also provide an incentive for private vehicle owners to sign up to accredited car-sharing platforms.”
Mr Gutwein said the $1,000 grant would cover the upfront costs of the MAIB Class 8 registration of a vehicle, which allowed a motor vehicle registered in Tasmania to be used as a hire vehicle.
“By getting more cars on the road our visitors can explore our regions and the special experiences we have to offer, which is just what they come here for,” Mr Gutwein said.
In Tasmania, private vehicles can only be legally rented out by hire companies and car sharing platforms Car Next Door and Evee.
Luke Martin from the Tourism Industry Council of Tasmania said the announcement was a sensible response to the issue.
“The shortage in hire cars has really been a thorn in our foot since the border restrictions were lifted,” he said.
“It’s been a real challenge for a lot of visitors over the last six months wanting to come to Tassie to get affordable and easily accessible rental cars.
Mr Martin said the program would serve as an interim solution for car hire companies that wanted to grow their business but were currently restricted by a shortage of cars available for purchase in Australia.
“At the moment, the market is just so tough to get more cars that we basically have to be quite innovative and practical about how we support [the hire car companies] to increase their fleet,” he said.
Mr Martin said the program would also help the industry plan for the state’s peak tourism season during the summer months.
“Next summer we’re going to have a bumper tourist season hopefully, so we’re going to want to make sure that [hire car companies] have as many cars in the fleet as they possibly can,” he said.
Car sharing’s platform has rapid expansion plans
Car Next Door chief executive Will Davies said the incentive was a “good, smart, simple way” for the state government to ease the state’s hire car shortage.
Car Next Door has been operating in Tasmania since January, and now has 100 people listing their cars through the service, but Mr Davies plans to rapidly grow that number.
“We think there’s scope for us to have well over a thousand cars in Tasmania, especially with the current demand,” he said.
“So we’re hoping over the next few months that we can add another 500 cars to the platform.”
“Now that people can essentially risk free, or even get paid to test it out, I think that it becomes a real no-brianer for people to put their personal car on or buy another car and put it on the platform to earn some extra cash out of it,” he said.
Mr Davies said the risk of using the platform was low as the company’s insurance covered vehicles while they were rented out.
But Vince Powell from Tassie Car Rentals said the rental car industry was “rightly highly regulated” and said it was risky to hire cars through private operators.
Mr Powell said the timing of the incentive was “a bit off” as hire car companies were starting to have cars available.
“Just when they’re getting their head above water they’re farming off perhaps some opposition cars out there that the industry just doesn’t need,” he said.
“From next week on, we start to get cars avilable and I do know the bigger fleeted companies have got many, many more cars than what we’ve got.
“If this had been done back in the tourist season when the borders were thrown open, there was an obvious lack of cars … it would have been a great thing. Now I think the shoulder is off and there’s going to be cars available, I don’t quite get it.”
Concerns about insurance and liability
Adelaide tourists Steph and James Cibich booked to hire a campervan several months before embarking on a Tasmanian road trip.
They did not experience any troubles hiring the van, but said the rental company was “pretty busy” when they booked.
The couple said they had lots of questions about the state government proposal, with Mr Cibich struggling to understand how it would work from a liability point of view.
“Does it have to be a modern car that’s going to be used? Who’s paying the insurance? What about the last time it was serviced, what sort of condition is it in?” he said.
“I sort of think it a bit like Uber I guess, because you’re quite happy to hop in a private vehicle or taxi, but taking a private vehicle around the island, that’s probably another matter.”