Want a ride? (Part I)
Francis Léonard
CEO Tip&Go (USA Canada) - Are you ready to tackle the labor shortage? Tip&Go THE E-tipping solution !
Having access to a vehicle while on vacation often makes a big difference for travelers, allowing them to visit at their own pace. Today’s post is the first of two on car rentals and how this business relates to the hotel industry.
History[1],[2],[3],[4]
One of the first references to car rental can be found in the Minneapolis Journal of July 22, 1904, where there was a short ad in which a bicycle shop offered cars for rent.
A few years later (1912) in Germany, Martin Sixt founded “Martin Sixt Autofahrten[5]” with three vehicles. In 1917, he opened an arm in Munich at Seitzstrasse 11, where one of the most visited SIXT branches is still located today. In 1927, his nephew, Hans Sixt, took over the company. After introducing innovations such as the first radio cabs in Europe, Hans founded “Auto SIXT.” A few years later, the first airports opened in Frankfurt/Main and Munich, opening the way for tourists. In 1967, SIXT became the first German company to launch a full-service leasing program.
In the US, car rental was introduced by Joe Saunders in 1916 in Omaha. The idea came to him when his brother, Harris Saunders, a partner in the family’s real estate firm, was out for a ride with his girlfriend and the car broke down. Harris had it towed back to town where he learned that it would be out of order for several weeks. Joe was dismayed when he learned the news as the car was also used for business and, without it, it would be difficult to travel around Omaha to sell lots and houses. It was then that Joe came up with the idea that was to launch a billion-dollar industry. Why not rent a car? In August 1916, he bought a used Model T Ford and on August 20, he put a small ad in the Omaha World Herald advertising the car for rent. By 1917, his Ford Livery Company was renting out 18 Model Ts at 10 cents per mile. By 1926, Saunders had expanded to 56 cities. In 1955, Saunders' company was bought by Avis.
An early competitor to Saunders was Walter L. Jacobs, whose Chicago-based Rent-a-Car opened in 1918 with twelve Ford Model T's. The company was bought in 1923 by John Hertz.
Car Rentals in the 1950s
Car rental companies expanded alongside the automotive industry. In addition, the railway industry collaborated closely with them, allocating them space at rail stations. After the war, many people began renting cars because they had more disposable income and started travelling. As demand increased, so did supply. As a result, some of the largest car rental companies were established, including National Car Rental in 1947 and Enterprise Rent-A-Car in 1957.
Nowadays[6]
Currently, the largest rental car company worldwide is Enterprise Rent-A-Car. With approximately 10,000 offices in almost 100 countries, Enterprise boasts a fleet of over 2.1 million vehicles and over 80,000 employees. In 2022, Enterprise had an estimated revenue of $30 billion and ranked 16th in the Forbes Top 500 Private Companies List.
Impact of the COVID-19
The Covid-19 pandemic had devastating effects on the overall travel industry and the rental car business was no exception. After years of steady growth, car operators had to eventually sell off parts of their fleet and Hertz even filed for bankruptcy.
According to statistics by companies such as Sixt, Hertz and Budget, ridership numbers dropped by 61% during 2020, when only 17.3 million cars were rented in the U.S. This is in stark contrast to 2019, when the number of vehicles rented reached 44.5 million.
Favourites
According to the October 2023 J.D. Power 2023 North America Rental Car Satisfaction Study, Enterprise ranked the highest in overall customer happiness. Enterprise maintained this ranking from this report for the third year in a row. National came in as the runner up[7].
As noted by Rentall[8], the top 10 most rented cars in 2023 were: 1) Toyota Corolla, 2) Nissan Altima, 3) Chevrolet Equinox, 4) Ford Fusion, 5) Honda CR-V, 6) Toyota Camry, 7) Kia Optima, 8) Jeep Cherokee, 9) Hyundai Sonata and, 10) Subaru Outback.
Renting a car is a nice way for travelers to get around. However, after a full day’s worth of visits, they want a clean and comfortable hotel where to relax. Unfortunately, hotels have problems attracting and keeping employees – it’s their number one issue. This is why adopting an electronic tipping solution like Tip&Go, which can increase employees’ earnings by up to 5$ per hour, could go a long way in enticing them to stay in the industry!
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Francis Léonard, CEO
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[2] https://about.sixt.com/en/ ?(History - Company history meets share price)
[5] Car rides in english.