A few months ago I rented a car with Sixt. It was a tragedy… not because of the company, rather because of me. My friend and I were shooting a documentary in Italy and some things went south.

Within me grew hatred for Sixt. I wanted to write a hit piece. I wanted you to know what an evil company they were…

Instead, I found out that they are kind of cool. It’s like when you spend time with that kid you didn’t like for some odd reason. Then you spend time with him and realise… he’s not that bad. (I’ll still never forgive Giuseppe for ruining our little budget though).

I also read a few articles about quick fixes and have some hard won lessons from the trenches.

Great Articles

Climate engineering: a quick fix or a risky distraction?

This article is about climate engineering, where we try to change the climate by pumping sulfur into the air. This simulates a volcanic erruption, and could be a short term solution to a warming climate. It seems like a band-aid… but it’s something. No real opinion on this.

What Is Ozempic and Why Is It Getting So Much Attention?

Ozempic is a diabetes drug, which helps its users lose weight. It’s a shortcut for people to get to a healthy weight. I have a strong opinion here. Do the work. Take control of your health. Eat less, exercise more. Eat whole foods. Add more veggies and less carbs or sugars. Walk when you can. You’ll be better for it.

Sixt

Sixt is a premium rental car company in Europe. While this old business may seem like its a giant of the past, the truth is much different. The company is pursuing an innovative strategy, built around the consumers desire for micro mobility.

Through the pandemic, Sixt has become a better company. Their revenue is up 20%, and they’ve managed to gain margin through a more efficient work force and owning a smaller fleet. This led to record earnings in 2022. The company has also decided to double down on expansion into North America, which has doubled in revenue from 2019.

Strategy

Strategy is where the big headed people at the top of a company sit down and decide exactly how they’re going to steer the ship. Sometimes the business lands on an iceberg, other times it lands on a beach where the passengers can sip coconut water and watch sunsets. That is to say… it’s important.

Sixt is a premium brand. Everything is focused around luxury and the customer. What the company has learned is that their customers desire better digital experiences. According to one of their management staff “simple, digital experiences are the new premium.”

For their next act, Sixt is building a premium digital experience. For 2023 they’ve budgeted €100 million investment for digital and further automation. This includes their Sixt App, which allows users to book cars through Sixt and book mobility through other service providers. These features are a sort of lead magnet for the rental services.

The company is also focused on expanding their fleet into electric cars. Consumers want to rent electric cars, and see rentals as an opportunity to test the electric car experience. To enhance this, they are investing €50 million into charging infrastructure.

Thoughts

Sixt is a cool company! The rental business is operationally intense, and requires a lot of Capital Expenditure to enter. That means that the market is established and new entrants are tough to come by.

One alternative is car sharing, which you can do through the Sixt app. However, there is one innovation which the company didn’t mention: Self-driving cars. While they’ve been 2 years away for the last decade, they are an inevitability. What do rentals look like when there are fleets of cars that work autonomously for 16 hours per day?

Lessons from the Trenches