Not Hertz, which is what I would have thought, but Enterprise, according to Fortune magazine. Some interesting factoids about the privately held firm. It's annual revenues are about $9BB, compared to $7.5BB for Hertz. And it's been the revenue leader since the late '90s. Enterprise is also the largest car buyer in the world and the largest employer of college graduates. The article does a nice job of outlining Enterprise's business model.
I generally rent from Hertz when I'm on business, even though it's probably the priciest of the major rental companies, even with my university discount. The cars all seem fairly new, and it's relatively convenient for airport pickup. But I'm open to switching: I'm always surprised at the pricing gap compared to the other major rental companies. Any thoughts?
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1. Posted by Christine on July 14, 2006 @ 10:53 | Permalink
We use Enterprise a lot. Sometimes we choose Enterprise, but other times we end up at Enterprise through Priceline. I've always had nice, new, clean cars there. Sometimes we fly as a family to Dallas, see family there, then drive in a rental car to Lubbock. Because that's four people on a 6-hour hike, I usually want an SUV or something. Twice I've gotten an SUV from Enterprise (Jeep Cherokee once and Ford Explorer once), and the cost differential against Hertz was staggering.
2. Posted by Doug H. on July 14, 2006 @ 11:02 | Permalink
I first rented from Enterprise after I was in a car accident 4 or 5 years ago. I was blown away by how good their service was, especially considering their discount prices. They gave me a considerable upgrade for free, and were incredibly understanding when I needed to keep the car three weeks longer than I initially anticipated (considering I was paying for a much cheaper vehicle).
Since then my experiences with Enterprise have been always been excellent. For example, once I needed a rental car for one day. The manager told me about a two day special they were having that would not only have a cheaper base price, but also give me a bigger mileage allowance. This is but one of many similar experiences.
Previously I had always gone online to find the cheapest rental car I could. The contrast between Enterprise and the other discount rental companies (Budget and Dollar) I had previously used was pretty stark.
I've never rented from Hertz, so I can't make a fair comparison between them and Enterprise. If price is a consideration, however, it might be worth giving Enterprise a shot.
3. Posted by Jeff Hobart on July 14, 2006 @ 11:24 | Permalink
Some years back, I commuted every week from Louisville, Kentucky to Austin, Texas to teach at U of Texas-Austin School of Law during their Spring semester. I taught Monday/Tuesday/Wed morning in Louisville, then flew to Austin and taught Thursday Friday in Austin. Weekends back to Louisville.
The airline connections were always a headache/nightmare (no direct connection).
But my experience with Enterprise in Austin for all 14 rentals was wonderful. The only downside was the off- site location from Austin’s airport.
4. Posted by Paul Stancil on July 14, 2006 @ 14:24 | Permalink
Fred -- I would guess that Hertz's strategy is to pick off the business renter and other consumers unlikely to respond to price signals, including those for whom convenience and speed are idiosyncratically important. Hertz always seems to have the best locations on-airport, and their programs (Club Gold, in particular) really are nice for those who can afford them or don't care too much about price. Although I agree with Christine and the others that Enterprise does a heckuva job, they are pretty clearly a "value" solution. Put another way, Hertz seems to compete on a particular form of quality, rather than price.
5. Posted by Fred Tung on July 14, 2006 @ 18:40 | Permalink
Thanks for all your testimonials. Paul, I agree with your theory. Hertz is looking for the OPM customers ("other people's money"). Business travelers who aren't paying out of their own pockets would rather have the Gold Club convenience. The Fortune article notes the differing strategies of the two competitors. Hertz always has the at-airport site; Enterprise is typically off-site.
I suspect that the typical business traveler's price insensitivity drives Hertz' business model. I'm unfortunately a little more price sensitive, even when traveling for work. Seems like Enterprise is worth a throw.
6. Posted by David on July 14, 2006 @ 19:06 | Permalink
I took the most amazing business strategy class in my last year of university at the University of Calgary where the prof. exclaimed just how strong the business model of Enterprise is. Consider this... Enterprise is not located at most airports. Why? Well, typical airport authorities and municipalities charge a premium for land near airports because of close proximity to the business traveller and cargo. So not only does Enterpeise offer substantially better service than those other guys, their land expenses are less, allowing them to charge less for rental cars. It's a low cost strategy.
It's all in the strategy my friends; it's what makes or breaks a corporations chance at being great.
7. Posted by Jim Chen on July 15, 2006 @ 1:18 | Permalink
I usually rent from Alamo, Thrifty, Budget, or Dollar, all of which are cheaper than Hertz or Avis. Some years ago Enterprise and I got into a shouting match over whether the quarter inch scratch on the bumper happened while the car was in my possession. They screwed my insurance company out of $450 for a paint job I’m sure they never completed. And then the insurance company took an ounce of my flesh. I’ll rent from Enterprise when I have to, but not when any other company is available, and under no circumstances out of the Seattle-Tacoma Airport.
Believe it or not, the dreaded Gil Grantmore has written about the problem of on- versus off-airport rental car concessions, if only in passing. The Phages of American Law, http://papers.ssrn.com/abstract=785524.
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