Request a personalized demo

The 2025 State of Rental Technology Report

A seismic shift is reshaping America’s equipment rental industry. 

While rental company managers scramble to hire mechanics and drivers in a brutal labor market, most are still running their operations on disconnected processes from a different era. 

The divide between digitally enabled rental companies and those using legacy systems is widening. Fast. 

National chains are successfully leveraging unified technology to scale operations efficiently, but most independent rental operators remain trapped – caught between disjointed, outdated software and the integrated systems needed to solve modern rental challenges.

And the stakes are rising. 

The market is cooling after years of better-than-expected growth. The American Rental Association projects equipment rental revenue growth will normalize from 8.2% in 2024 to 5.7% in 2025, reaching a total of $82.6 billion.

In this new reality, efficiency isn’t just an advantage – it’s survival.

And yet while 83% of rental operators grapple with critical staffing shortages, 67% still waste precious human resources on tasks that modern technology could handle in seconds.

If you’re trying to manage shifting customer demands, rising equipment costs and understaffing with disconnected systems and manual processes, you’re fighting an increasingly uphill battle.

The future is clear: rental companies must fundamentally change how they do business or risk being left behind. Those that adopt technology and successfully integrate it into their operations will unlock unprecedented resource utilization and market advantages.

In this report, we examine how leading rental operators are navigating this technology inflection point, the impact of true integration on operational performance and the strategic shifts that will define success in tomorrow’s rental industry.

About this report

This report draws on data collected from 50+ US rental operators in Q4 2024, representing companies across multiple US states and fleet sizes. Analysis is enriched with insights from industry experts including Josh Nickell (CEO of Northside Tool Rental and former Vice President, Equipment and Event segment of the American Rental Association), Michael Bauman (Director at TM Capital) and David Felts (Managing Director at TM Capital). Our focus is particularly on independent rental companies operating multiple locations, though findings are relevant to operators of various sizes.

The technology adoption reality 

The rental industry invests in technology at half the rate of comparable sectors. 

The reason? While rental operators can instantly calculate the ROI on a new fleet addition, quantifying returns from software feels far less concrete.

“We’re really good at saying, ‘If I go buy that excavator, I can get a 50% dollar utilization on it,'” Josh Nickell, CEO of Northside Tool Rentals, explains. “But when it comes to efficiency improvements from better contract writing or maintenance processes, we struggle to calculate the return. We’re good at one, but not good at the other.”

The integration challenge

This hesitation has created a stark reality. Our data reveals while most rental companies have adopted basic technology, true integration remains elusive.

Only 16% of rental operators have achieved fully integrated systems. The majority, 67%, operate with partially integrated systems requiring manual data transfer, and half of them still rely on manual methods alongside their digital tools.

The operational impact is severe. 

Seven out of ten rental companies report losing valuable time to inefficient processes, with most managing three to four disconnected systems. With significant understaffing in critical roles like mechanics and drivers, this lost time is more costly than ever before. 

‘Too many rental companies are still making decisions based on gut feeling,’ Nickell observes. ‘They’re looking at their inventory and guesstimating what they need based on intuition and experience.’

For the thousands of rental businesses across the country operating with fewer than five locations, this technology gap creates particular vulnerability. 

While reliance on instinct over data-driven decisions becomes increasingly risky, the national players – United, Sunbelt and Herc Rentals, who account for around 30% of the US rental market – continue to pull ahead.

Investment bank TM Capital estimates that every year, the industry grows enough to create at least one company with revenues that would place them among the top five largest in the market. Integrated digital systems are vital in helping these companies scale operations and strengthen customer relationships across the country.

The operational impact

Without integrated software, independent operators can’t offer the instant visibility over equipment availability or seamless digital transactions that contractors demand.

Instead, they’re left battling missing rentals due to poor visibility across locations, double-booking equipment due to disconnected systems, and spending excessive time on phone calls manually checking availability and reconciling information. 

Each friction point compounds, directly impacting both operational efficiency and customer experience – all stemming from rental businesses trying to run modern operations with a patchwork of disconnected tools. 

While one system handles inventory, another manages maintenance schedules, and yet another processes payments…with staff manually transferring data between them. 

The solution isn’t just adding more technology, it’s ensuring critical business systems work together seamlessly. Ask yourself: do my inventory management, maintenance scheduling, payment processing and customer service tools work cohesively?

This unified digital foundation isn’t optional for independent rental companies. It’s essential to preserve the service advantages that once set them apart – especially as market conditions tighten.

The cost of standing still

After two record-breaking years where demand outstripped supply, reality is biting. 

Nickell predicts the industry is sitting on 5-10% more fleet than it needs, rental rates are under pressure, and the buffer of exceptional growth is fading. 

While infrastructure projects and commercial construction still drive the American Rental Association’s growth forecasts, capturing this opportunity requires operational agility that manual processes simply can’t deliver.

‘Equipment rentals are closely tied to the performance of downstream markets,’ explains Michael Bauman, Director at TM Capital. ‘There’s been very robust activity and capital deployment for many years. What we’ve seen more recently is the rental sector continues to realize growth, albeit at a more moderate pace relative to what were really ultra-high growth, high demand years in 2022 and 2023.’

The gap between high-performing rental companies and those struggling with operational inefficiencies is widening.

When it comes to assessing success, David Felts, Managing Director at TM Capital, says earnings before interest, taxes, depreciation and amortization (EBITDA) margins are the holy grail.

‘When you see EBITDA margins around 30%, that seems like it’s a good operation. When you get above 40%, you’re really starting to see an elite entity that’s separating itself from the rest of the market. Clearly, they have the right product, the right service, the ability to get price on equipment, and obviously very solid demand and great market reputation,’ he says.

These kinds of margins aren’t achieved by equipment quality alone – they’re also built on operational excellence. In this landscape, every disconnected system bleeds money. 

When fleet data lives in separate silos without a centralized inventory system, equipment sits idle in one location while fleet utilization suffers at another from lack of visibility. 

Staff waste hours manually reconciling data between rental management, maintenance scheduling, and accounting platforms. 

Arapahoe Rental, a provider serving North Colorado, found their outdated software couldn’t integrate with their inventory management system which led to double bookings and missed rentals. Each friction point directly impacts customer experience and revenue potential, eating into margins at a time when every percentage point matters.

The shifting service advantage

This operational fragmentation is particularly dangerous because it undermines the very advantage that has historically set independent operators apart. 

As Felts explains, ‘At the end of the day, when you drive down these industrial streets and you see four or five major rental houses all lined up across from each other, ultimately the equipment performs within a fairly tight range, and the pricing is within 20% from cheapest quality to highest quality.’

What truly differentiates winners in this market, he says, is the concept of ‘rental reliability’ – a contractor’s absolute confidence that they can secure equipment when needed, where needed, at competitive prices. 

Felts observes, “Once a contractor firmly believes that if they have equipment needs, they can pick up the phone or go online and get that equipment readily available, in close proximity, and at a very competitive price, then over time, they will ask themselves, why do I own this equipment anymore?’

Over 40% of workers spend at least a quarter of their work week on manual, repetitive tasks – time that could be spent building customer relationships or optimizing fleet deployment. In logistics, which shares many operational parallels with equipment rental, workers report spending over half their time on manual tasks.

And the complexity only intensifies as rental companies attempt to grow. 

Each new location or piece of equipment adds another layer of manual coordination, creating a ceiling on growth potential just as the market demands greater agility. 

Companies relying on disconnected systems face a cascade of strategic disadvantages:

  • Revenue leakage from manual processes and poor visibility across locations
  • Higher operational costs from duplicate data entry and error correction
  • Increased risk of customer churn due to service delays and communication gaps
  • Limited ability to scale operations without proportional staff increases
  • Reduced ability to make data-driven decisions about fleet investment and market expansion

This capability gap becomes particularly costly as contractors increasingly expect the same seamless experience they get in their personal lives. Every manual touchpoint in the rental process – from checking equipment availability to processing returns – represents a moment where customers might choose a competitor offering a seamless digital experience.

With potential tariffs threatening to drive up equipment costs, fleet oversupply, and a softening home improvement market, this performance gap will only grow. 

Those unable to deliver the reliability and efficiency that modern contractors demand will find themselves increasingly marginalized, regardless of their equipment, quality of customer service or pricing. 

When differentiation matters more than ever, the cost of standing still with disconnected systems may be nothing less than survival itself.

The path forward

The industry stands at a transformation point. One that goes far beyond basic efficiency gains. 

Leading rental companies are strategically adopting equipment rental software, automating processes, and integrating artificial intelligence, not just to streamline operations, but to fundamentally reshape how they compete and create value.

This shift moves rental operators from equipment providers to strategic asset managers using data and automation to optimize fleet deployment, maximize asset returns, and anticipate market demands.

And the impact is indisputable.

Our research shows investing in integrated technology is delivering measurable operational improvements: 57% of companies saw a decrease in missed rentals, while 43% reported increased utilization rates.

A third of companies see reduced overhead costs.

Our research shows 64% of rental houses who invest in integrated technology save time on administrative tasks – hours now spent maintaining and managing fleet, tracking critical data points and finding new ways of monetizing their inventory.

With integrated systems, data flows automatically between each part of your business. 

Imagine if you had real-time fleet visibility across all your locations; you could consider dynamic pricing and utilization. Your data-driven maintenance scheduling would maximize uptime. With detailed customer histories at your fingertips, you’d build better relationships with your customers.

Plus, detailed analytics reports and dashboards would help you track the important numbers daily. You’d have instant access to revenue trends, original equipment cost (OEC) of equipment on rent, dollar utilization metrics and payroll as a percentage of revenue.

Investing in a cohesive technology stack means independent operators can compete in an increasingly challenging market. Rather than trying to match the big players on scale and efficiency, they can leverage data and automation to amplify their traditional strengths – delivering a more responsive, personalized service while operating more efficiently. 

And the opportunity extends far beyond current capabilities. 

Experts suggest rental growth potential is underscored by market penetration rates. TM Capital’s analysis shows US rental penetration at around 60%, compared to 80-85% in the UK and parts of Asia. Companies that solve their operational challenges now position themselves to capture an expanding market.

But remember, success requires more than just selecting the right software. 

It demands a strategic approach to integration, careful attention to process design and a commitment to building data-driven operations. The companies leading the way aren’t simply using more technology; they’re using it smarter, combining it in ways that drive measurable operational improvements and enhanced customer experiences.

2025 Snapshot: What’s Coming Next?

“The rental industry is evolving faster than ever. In my conversations with hundreds of rental operators across the country, I’m seeing a fundamental shift in how successful companies operate.

Looking ahead, three key trends will define success:

First, we’ll see rental profits grow through AI-enabled efficiency. The most successful companies won’t necessarily have the biggest teams – they’ll be the ones using smart automation and AI to do more with less, from 24/7 customer service to automated fraud prevention.

Second, gut feel is giving way to real-time analytics and metrics. The old way of running rentals based on intuition and experience is fading. Tomorrow’s leaders are already using real-time data to drive every decision, from fleet optimization to maintenance scheduling.

Finally, connected systems aren’t just nice to have – they’re essential for growth. The companies pulling ahead aren’t just adopting new technology; they’re making sure every part of their business works together seamlessly.

The winners won’t necessarily be the biggest players. They’ll be the ones who embrace this shift towards integrated, connected technology. For independent rental operators, this is your moment to build the foundation for long-term success.”

– Kyle Clements, CEO of Quipli

The final word

The rental industry’s digital evolution is creating clear winners and losers.

Our research, from over 50+ US rental operators, reveals a stark truth: those who embrace true integration will lead, while those sticking with legacy systems will fade. The numbers tell the story – 57% fewer missed rentals, 43% higher utilization rates, and a 64% time savings on administrative tasks for companies that make integration a priority.

In 2025, technology is a strategic lever.

The market is evolving at lightning speed, growth projections are softening, and labor shortages persist. For independent operators, this combination of pressures could determine survival.

But it also represents opportunity.

This is a rare chance for smaller players to outmaneuver larger competitors by combining their natural strengths -– agility and personalized service – with intelligent, integrated systems.

Quipli is an end-to-end equipment rental software that helps hundreds of rental companies across the US future proof their business. Book a demo today to find out more about how Quipli can help your rental business thrive.

References

1 https://www.internationalrentalnews.com/news/north-american-rental-revenue-growth-to-slow-in-medium-term/8042516.article#:~:text=The%20American%20Rental%20Association%20(ARA,in%202024%20from%20last%20year
2 https://news.ararental.org/equipment-rental-industry-projected-to-experience-softening-growth
3 https://www.smartsheet.com/content-center/product-news/automation/workers-waste-quarter-work-week-manual-repetitive-tasks?srsltid=AfmBOorMd26N8rPTNa6lJ7ZyTlPVm03i9FuBV2nhAgsYnlFVhkkrkbAc
4 https://nshift.com/blog/logistics-teams-spend-50percent-of-time-on-manual-tasks

Learn about Quipli’s rental software

Learn More
4.9/5
5/5
5/5

Renting equipment is about to get a whole lot easier

  • how-faq

    I. Answer a few quick questions on your business. It takes 2 minutes, tops.

  • how-call-icon

    II. Our team will reach out immediately to take you through a demo of Quipli.

  • how-check-icon

    III. Once you’re up and running with Quipli you’ll wonder how you ever managed without it.

Book a Demo