When people think of big players in the car rental industry, it is hard not to think of Hertz. This company has already made a huge name for itself in terms of daily rentals. However, as far as hourly rentals go, Hertz has a long way to go to make a name for itself. That being said, it does not look like Hertz is going to let that stop it from trying.
Hertz just recently announced that it is going to attempt to increase its business away from airports by putting technology in its cars that will allow customers to rent them for hours and not just days. Unfortunately, this new technology might not be ready to go until 2016.
The technology that Hertz is working on will allow it to easily manage its huge fleet of 575,000 cars. It will also be able to give consumers up-to-the-second information on where its cars are located. With this kind of information, Hertz will be able to add its cars with kiosks instead of having to buy a whole property. This will make it easier for Hertz to set up new locations where people can easily rent cars outside the airport.
Right now, Hertz only has about 2,600 locations in neighbourhoods around the world. If everything goes according to plan, Hertz hopes to have around 12,000 locations in the next few years. This information was revealed by the Chief Executive of Hertz, Mark Frissora. To make this happen, Hertz is going to work with such companies as Tire Kingdom, Walgreens and even Lowe’s. The plan is to use these existing stores as areas where Hertz can rent cars to consumers.
Mr Frissora went on to say that consumers demand 24/7 capability. This is something that Hertz can deliver to its consumers. The company has been studying consumer habits for a long time, and it thinks that it has found where the highest demand for car rentals is. Overall, Hertz thinks it has a huge opportunity here to expand its piece of the car rental market.
According to Hertz, U.S. consumers actually spend about $11 billion a year renting different cars from areas outside airport locations. For now, Hertz only has about a 12 percent share of this market. Currently, Enterprise has the largest share of this market. However, even Enterprise only has around 5,500 locations outside of airports. Thus, if Hertz can follow through with its plans to have 12,000 locations outside of airports, the company has a great chance to strip Enterprise of its crown.
Although Enterprise makes the most money in terms of rentals outside the airport, it is not the leader in hourly rentals. Zipcar, which was acquired by Avis, is the current leader of the hourly rental segment. It has around 770,000 members right now. These members share some 10,000 cars. This business model will be the true test for Hertz to overcome. It is not trying to break into a new market. There are already companies in this market that have a strong foothold.