Every Major Rental Automobile Brand Is Owned By These 3 Firms: Here’s How That Happened

You step off the plane, drag your luggage through the terminal, and are greeted by an array of brightly coloured logos. You’ve got got the green of National, the yellow of Hertz, the red of Avis, and a buckshot of budgeteers like Thrifty, Alamo, or Dollar. On the surface, it appears like the competition is overwhelming, but identical to the cereal aisle at your food market — all those options on the shelves result in the identical couple of major brands. But let’s be real for a second — that perception of selection is a curated illusion.

Nearly all of the U.S. rental automotive market is controlled by just three corporations: Enterprise Mobility, Hertz Global Holdings, and Avis Budget Group. It was not at all times arrange like this, nevertheless. Back within the day, automakers actually owned a few of these corporations to dump inventory. Ford bought Hertz in 1987 to assist move units, so the lineage of those Hertz-themed Fords ran deeper than you could have thought. But after many years of mergers and buyouts, the market changed into what it’s today.

Calling them rental car-tels could seem harsh, however the term starts to make sense if you realize they dominate airport terminals, control supply and demand, and may easily spoil a family vacation — not to say hidden fees and other shady practices, comparable to Hertz’s AI-powered damage scanner. And while it’d feel such as you’re shopping around for the perfect deal between Alamo and Enterprise, the cash is all funneling as much as the identical checking account anyway.

If this were a game of Monopoly, Enterprise Mobility can be the guy who bought all of the properties while everyone else was fighting over who would get to Boardwalk first. Because the largest company by market share and fleet size, it’s the undisputed heavyweight champion of rental. Oh, and in contrast to its publicly traded counterparts who should answer to shareholders, Enterprise is privately held by a single family.

For you business grads, Enterprise Mobility’s portfolio is a lesson on segmentation. National Automobile Rental is at the highest, poised as a premier brand for the business traveler who’s allergic to waiting in lines and willing to pay for speed. Then you may have the flagship Enterprise Rent-A-Automobile (ERAC), which dominates the neighborhood market and is the go-to when your each day driver is within the shop. With estimates from the National Highway Traffic Safety Administration (NHTSA) suggesting 17,000 accidents occur on daily basis and an Enterprise brick-and-mortar across the corner, that is a fairly great revenue stream. Finally, there’s Alamo, the junior varsity brand that targets a budget customer who just desires to get to Disney World without taking out a second mortgage.

Okay, so Enterprise has just a few brands; what’s so special about that? The genius here is not only the branding or the location; it is the waterfall. A brand latest vehicle enters the fleet at National for the high-paying suits. Once it racks up some miles, it cascades right down to Enterprise for general use. When it gets a bit of drained, it finally ends up at Alamo for the budget hunters. It’s an excellent strategy to squeeze every cent of revenue out of a Chevy Malibu before sending it to the good auction block.

Hertz is the icon of the group — the one with essentially the most turbulent history and the best cars. It sits in the center of the three by market share today, nevertheless it hasn’t had a smooth ride otherwise. The corporate filed for bankruptcy in 2020 when the pandemic economy did its thing, but found its way through it. Hertz also operates with a tiered structure to compete with Enterprise, using Dollar Rent A Automobile for the mid-tier family market and Thrifty for the discount hunters. 

For the gearheads, Hertz has at all times been the interesting one, known for historically pushing high-performance rentals. Hertz even had a “Rent-A-Racer” program at one cut-off date, but the current stance of the corporate is much from the glory days of limited edition Mustangs. More recently, Hertz tried to bring back the Hertz Edition Mustang to match their latest EV strategy, rolling out a limited-edition Mach-E within the classic Hertz livery and pivoting hard into the longer term with an enormous bet on EVs. Unfortunately, the execution was flawed and even after selling off tens of hundreds of EVs the corporate reflected a lack of $2.9 billion from this system.

Rounding out the triumvirate is Avis Budget Group, with a market strategy that’s more of a one-two punch — Avis attacks the company types with its “We Try Harder” slogan, while Budget exists to make casual travelers feel like they’re getting a deal on the very same cars.

But apparently, that wasn’t enough market saturation. To ensure that it didn’t lose out on absolutely the bottom dollar, Avis bought up Payless Automobile Rental in 2013 to fight within the mud with the bare-bones discount desks. Avis even hedged against the concept of automotive ownership entirely by buying Zipcar, just in case the urban market decides they like hourly billing over actually owning something. With $1,000 per 30 days automotive payments now the expectation, perhaps the corporate is onto something here.

The following time you are dragging a carry-on to the airport rental center and cross-referencing prices in your phone, just keep in mind that the sport is rigged. It’s mostly an illusion of selection designed to make us feel like savvy consumers relatively than captive audiences. Whether you’re thinking that you snagged a cope with a reduction brand or splurged on a premium name, that money is sort of definitely flowing as much as the identical three overlords. You are not really shopping around for a greater product — you are just picking which color line to face in when you wait for a Nissan Altima that smells vaguely of regret. All due to the good American pastime, capitalism.