April 26, 2016 • 38 mins
Who sold the first rental cars? Where did the rental car business begin, and how did today's rental companies get so darn big? Learn the answers to these questions and more as Scott and Ben delve into the history of rental cars.
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Episode Transcript
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Speaker 1 (00:02):
Go behind the wheel, under the hood and beyond with
car Stuff from house stuff Works dot Com. Hi, welcome
to car Stuff. I'm Scott and I am Then we
are joined as always by our super producer, Noel the
Full Tank Brown, The Full Tank Noel rent Direct Brown. Right, Yeah,
(00:27):
it's good. We've got a few of these. Maybe, so
we're talking about something, uh, a little bit strange today,
not not necessarily strange, but it's outside of some of
the typical topics we explored in this ship. Yeah, I
think so. So you if you were like many other
many other people have at some point rented a car,
(00:48):
I am anomalous and that I have not ever personally
rented a car. Wait a minute, I thought, Okay, when
we were talking about this ahead of time, I thought
maybe you said you just hadn't done it very freakquently.
But I didn't know that you have never rented personally
rented a car. You said that your parents had, that
you've been with them. My folks have rented a car,
My friends have rented cars, and I've ridden with them.
(01:11):
But I have personally never rented a car. I have
become very close all I have come very close rather
to doing a move that I heard about from one
of my friends on the West Coast. What's that renting
a supercar for like a weekend? Oh yeah, so well,
so you're you're telling me that maybe your first rental
(01:32):
car experience would be like a Ferrari or some wouldn't
that be wouldn't that be cool? That would be cool?
It also sounds if you know, man, I'm full of
these hair brained schemes that seemed like great ideas at
the time. There was you know, we talked we talked
about this a little bit in the Pony Car episode two. Yeah,
the possibility of renting uh you know, some of the
(01:52):
pony cars that these rental companies have and using that
as kind of a longer version of a test drive
for yourself. Absolutely, and that's a good idea. I don't
know why. And I think we've talked about renting supercars too, Yes,
we have. It was a few years back, but that's
that's where the seed had been planted that brought me
to that that the conversation I had with this guy
(02:13):
out in l a Is planted the seed for us
talking about renting the supercars, which has later led to
this enormous scheme. Picture me Scott in an empty apartment
with all these pictures of supercars up on the wall,
and then like red Yarn joining them, you know, like
a conspiracy wall Sea. That's not true. I just have
(02:35):
looked at it a lot. I haven't I haven't made
a wall. You'd have to replace your other collage of
the same, right, Yeah, So what what what car did
your friend rent? Do you remember? Do you recall? Uh?
He did in fact at a Ferrari. I can't remember
exactly which one, but I do remember telling him that
I first off, I didn't know you could do it.
(02:56):
And secondly, and I remember telling him like, that's a
foolish decision because what if literally anything bad happens to it.
And he said, you know, it's like, no, I pay
you to get the insurance. I mean, it's gonna be fine.
But and I don't know. I don't know if you're listening. Jake.
(03:18):
Jake's a horrible driver. Oh boy, he's not a good driver,
and nobody's perfect. But he made it through. He had
a great time. The Ferrari is fine. Okay, Well that's
good news, because things could go horribly wrong in that situation,
of course, But you know that that service has offered
here in Atlanta. Yeah, yeah, yeah, yeah, So you know
you got potential. It's there's a possibility that's really happening
(03:39):
for you. Then this could be big for me. This
could be my everything turns around moment. It could be
all right. So that's I didn't know that ahead of time.
Now I've I've rented many many rental cars on the
way and something that I didn't want to have to rent,
but I did. Um, you know, the the gap of
time between when my old car died and I got
the current vehicle that I have, I had about two
(04:00):
weeks where I had to rent a car that was
the most recent and yet Yeah, and you know surprised,
you know, when you walk out to the lot, there
was a mini waiting for me. And I didn't expect
that all that was gonna be in like a I
don't know, like a Chevrolet Speck or whatever they call it,
you know, like something really uncomfortable and small as an
economy car rental trying to get something very very small
and uh, and I was really happily surprised to see
(04:21):
a just at standard Cooper. It wasn't a Cooper S
or anything like that. I'm sorry. It was just a mini,
not a Cooper s or anything like that, just a Mini.
But it was a lot of fun to drive for
those two weeks. And you know, along the way, we've
had some I guess interesting vehicles, you know, crappy vehicles,
and they've been some really good ones. And I've had
the times where carrying a lot of gear, a lot
of luggage and you know, camera gear and stuff, and
(04:44):
you have to rent like a mini van, so that's
kind of a drag, but they're comfortable. Um, you go
to Florida and you rent cars and they're kind of
musty smelling. You go to you go out West and
they're all dusty inside and even if they even after
they cleaned them, they're dusty. And their tips and tricks
that you can find about rental cars to you know,
like like not just the environment in there, but one
(05:04):
hidden secret of the rental car industry. And I heard
this from people who work for, you know, a different company.
I'm not going to name the specific company, but you
know there there are quite a few and there are
a few big, big guys in the business. Anyway, here's
the secret if you're renting a car to drive one
(05:24):
way and drop off at another location. Your likelihood of
getting the crappiest car on the lot just skyrocketed. Really
trying to pass it off to somebody else because they
don't want to have to have it, right, That's what
I heard. I don't know if it's true, because again,
I've never rented a car and work. Now you're making
me think, because well, I've had, you know, and I've
(05:45):
talked about them on the show, and I know that
there was one vehicle somewhere along you know, the history
of the show that I rented. It was just awful,
and I think it was out west somewhere, and it
seemed like every button that I touched for, every knob
that I tried to turn, fell off in my hand,
and you know, like the doors that the scenes didn't fit,
and it whistled when we were driving. And rental that's
(06:06):
the thing I'm struggling to remember right now. It possibly was,
I just can't remember. I mean, surely that doesn't happen
in every place, because as we know from our earlier
episodes on rental vehicles, they're tiered rental categories, right, so
you can get a luxury vehicle. You can get economy
midsize exactly. Yeah, utility, so maybe you just get the
(06:27):
worst of that division. It could be. And you know,
there's a few other little things that we'll talk about
along the way here today, but we should probably get
this out of the way right now. What we wanted
to discuss today on Today Show. The main focus will
be about the very first rental car company, because that
comes from a listener. It's a listener suggestion. Yes, and um,
I hope not cutting a short here, but we can
(06:49):
come back to some of this other rental car stuff absolutely. Um.
This comes from a listener as a Facebook message, and
it comes from a listener named Jeff O. And Jeff
wrote in ohh boy, Ben, this is like a year
ago May May of but this is one that we
caught in our Nuts and Bolts episode just recently, and
(07:09):
we said, you know, we did the whole apology thing there,
so let's just move on. So Jeff run in and said,
I have a suggestion for a podcast episode since you
just did the U Haul episode. Oh boy, that was
a long time. We just did the U Haul episode. Um,
the idea is rental car history. I have a personal
interest in this as the first rental car companies started
(07:30):
in Omaha, Nebraska. So all right, so that's that's Jeff's suggestion.
And we dove into this and uh boy, that may
or may not be true as we find out. Yes,
there is a bit of murk to the story, contentious
beginning to this. We're not sure if that is really
truly the case or not. It's generally credited as being
(07:51):
the first one though. Yeah, he's right, there are competing narratives.
Here is the intro. I remembered that I wanted to
do with the getting So folks, we were talking off
air and I said, oh, Scott, I've got this great
intro we could jump in. Well, how about this. Let's
pretend right now in the middle of the show. This
is the beginning of the show. How about that. So
(08:12):
here's what I'll do AGAINNA do my normal intro. Okay, yeah,
and uh and and then you pick it up and
jump in right, Hi, and welcome to car stuff. I'm Scott,
I'm Ben. As always, we're joining with our super producer Noel.
Second take Brown, Right, that's a good one. It's apropo. Okay,
So here is our This is like a mid Engine intro,
(08:36):
isn't it? Here's here's our mid show intro. Uh that,
Now that we are getting to Jeff's question, Scott, did
you ever play at a computer game called The Oregon Trail? Yes? Did?
What do you think of it? It was the worst
graphics I've ever seen in my life, But I don't
look surprised, and I say that it was it was?
(08:58):
It was m have a lame game. I mean, really honestly,
wasn't it. Wow? I completely disagree with you. I love
did that game? Yeah, we'll see. I didn't have a
lot of experience with it, but I know exactly what
we're talking about, and I did play it, but I
just never caught my attention enough to to continue on
with the game. Yes, I am. I think part of
it is that I and a lot of people in
(09:20):
my generation associated with being able to have fun during
school because it's a game you'll play at school. So
for anyone who's not aware of, The Oregon Trail is
a game that was pretty popular in schools across the
US for a while, wherein you are the leader of
a wagon train essentially group of pioneers crossing the continent
(09:44):
to settle in California, and you've got a lot of
decisions to make on the way. Yeah you you You
have the option of starting off as the poorest possible
person or all the way up to a banker who
has more money, but you get less points. At the
in the game, you choose your people who will be
in your band. You have to feed them, clothe them,
(10:06):
try to keep them from dying. Can I tell you
why this? This game really wasn't one of my favorite games,
and again very limited exposure to it. However, I don't like.
I don't like, and this is right through to today.
I don't like games that cause undue stress. And that
game causes stress. It's like one that you if you
make the wrong decision, part of your party dies. I
(10:27):
mean that's you take the wrong trail and you go
through the mountains, you hit with a storm. Uh you
know that, then part of your party dies and you've
got to find food in a in a just an
unbelievably difficult situation. It's not that you're really doing that,
it's just that it causes stress. And my daughter today
will play apps, and you know the games that that
involve like um, making cakes for somebody, and you have
(10:48):
to like get the right ingredients and mix them together,
put it in the oven. Then a new customer comes
in and request something different. You're doing that. You gotta
go over here and get that, and you're playing like
the part of a server in a restaurant. And it's
stressful to me. All that stuff is very Just watch it. Yeah,
I just don't. I don't need that in a game.
I just want to play you know whatever, Space Invaders
and be done with it. See that's old school. Well
(11:10):
here's the sorry, we know I feel. I feel that
way sometimes. Two about video games. Well, what's interesting about
the Oregon Trail as a game is, although it is,
you know, a heavily romanticized and simplified thing, it does
get you thinking about history. And one of the cool
things that we talked about off the air, as we're
(11:31):
getting into the ambiguous beginnings of rental cars, was that
the rental business is much older than vehicles. Yeah, that's so.
So we're talking about rental cars, but this is this
is a rental of another kind, and and playing into
this well we'll get to it in just a moment,
but going all the way back to ancient Rome, there
(11:52):
were rental chariots along the way, so they were able
to rent a chariot in ancient rome Um. There are
a lot of types of uh, rental vehicles in any
kind of civilized country really, and sure you know somebody
was set up a business and say I've got this
this to offer and then included you know things like
buckboards and and broms and you know these these old
horse carriages that you know, people needed but maybe didn't
(12:15):
have the money to buy, so they would rent one.
And even wagons. Well, yeah they're wagons, So this is
what you're talking about, right, Yeah, like covered wagons, kind
of stoke wagons. Yeah, so I don't understand exactly how
that works. Now thinking about that game, you're headed out west,
you're starting the east. This is like a one way
rental thing, because there's no way you're gonna be returning
(12:36):
that kind of stoke a wagon unless they have a
second location that's out west that that accepts the wagons. Right,
that's a business model. Maybe you pay, you pay a
fee to the people on the east coast, and when
you get to the west coast they refund part of
your fee. Oh, I don't know what kind that's the
incentive to turn it in. What kind of condition would
that wagon being when it arrives on the west coast.
(12:57):
And plus so I mean along the way, you're you're scavenging.
Scavenging that for for would likely gone through many many
sets of wheels along the way. Well, it wasn't yet,
It wasn't the perfect business model obviously, And if the
rumors surrounding rental companies are true and have been true
since time began, then odds are those folks on the
(13:17):
west coast, We're not giving you the best wagon. But
you know what, what a fantastic way to really get
people to you know, make this journey because a lot
of people couldn't afford to do it. They couldn't afford
their own wagon. And for them to be able to
rent the wagon from somebody on the east coast or
somebody on the east side anyway, so you know, the
east side of the Mississippi maybe and then head out west,
that was a that was a game changer for them.
(13:38):
It allowed them to do that allowed them to to
make progress were before they wouldn't have been able to
make that right absolutely, it would have been stuck right
where they were because they just simply didn't have the
means to to have the vehicle to get there, and
so that really opened up the West in a way.
And again that's not really a rental car. But for
the first time we hear about Now, okay, before we
get to this then, so cars are generally accepted to
(14:01):
have been invented, like the first vehicle is commonly referenced
as as happening in eight, right, what we accept as
the precursor to the modern automobile. Correct, you're right, so
eight we're talking that's right, At least within a year
or two. Either way of that, you know that that
other manufacturers are creating vehicles, and you know the popularity games.
We we've gone through that whole thing in the past.
(14:22):
But the very first reference to a rental car company
or a company that would rent vehicles comes from a
Minneapolis journal in nineteen o four. So the middle of
nineteen o four and July, a bicycle shop devoted a
line of an advertisement that announced that it offered cars
for rent. So this is, ah, it's not an entire
(14:43):
business that's centered around car rental. It's not. It's not
you know, the very first car rental agency or anything
like that it's just a business, a bicycle um shop
that that offers we have we have vehicles for use.
And that's really nothing different than what's happened all throughout
history from as it at ancient rome on um. So
it's that idea just brought into the modern day. That's
(15:05):
the very first reference of being able to rent a car,
and again not the very first rental car business, because
that happens in nineteen sixteen, right, that happens in nineteen sixteen,
starts with a guy named Joe Saunders. Now this is
the guy that Jeff was talking about. This is who
(15:26):
you're talking about, Jeff. Joe is the epitome of the
American dream. At this point, he has borrowed one Model
T in nineteen sixteen, and that's how he starts his
car rental business exactly. You know what, I'm gonna take
one little side note here because there's something that happened
in between that I find interesting. Are you talking about
the Germans? The Germans? Yes, now the Germans. So again
(15:49):
this is just another asterisk in history here, but there's
a car company that still exists. In fact, it's the
company that I rented that many from, yeah, called six Yeah,
s I X T and thats a German rental car
company that was founded in nineteen twelve and they established
their their business with just three cars for rent. So again,
Germany had this in nineteen twelve, and it wasn't until
(16:12):
nineteen sixteen when this Nebraska man, as he said his
name was Joe Saunders. Yeah. Yeah, that's when he had
his Model T business. So he's like the first, this
is the first US rental company, yes, car rental company. Yes, so,
so Jeff is accurate and saying it's the first car
rental company. That's just that, but also in the United
(16:34):
States because the very first car rental company would be
that sixth German company in nineteen twelve, and people love
this idea. By nineteen seventeen, his company, which called the
Ford Livery Company at the time, was renting out eighteen
Model Ts. Yeah did you tell them how much yet?
Because he would charge rents ten cents a mile in
(16:56):
order to cover the wear and tear on his beloved
Ford vehicles. And the way the way that he did
that was he fixed a a mileage device, something that
would float on the axle. I think that would would
tell you have account rotations and tell him the mileage
of that vehicle. Uh, so that he'd be able to
charge them whenever they return the vehicles. So very smart way.
And then you'd do that you fixcept to the front axle,
(17:16):
I think, right. And here's another part of this. First off,
I just want to emphasize again that he started the
business with a borrowed car, which is kind of like
renting a car to start a rental well, yeah, kind
of in a way, right. But and then one year
later to have eighteen and then and then just what
seven years after that in he had operations in twenty
(17:38):
one states, so he grew exponentially at that and that's
like fifty something cities, fifty six cities. Yeah. And you
know what I find funny about this that this name
you'll see this on on some modern companies too. And
I'll listen to modern companies in a moment, But the
names of these it's not exactly what you think. You
think it'd just be like Saunders Rental or something like that.
He always included the word system, so he called himself
(18:00):
the Saunders Drive at yourself system. Then he called it
the Saunders System, and it was called the Saunders car
and truck rental system. And you think, I think that's
that's unique to him. But other companies also used that
system along the way. And there's a few more that
we'll mention here today in a little bit more detailed.
But um, some of the others that that use it
along the way, and oh I had them marked here,
(18:20):
but maybe not anymore. Shoot, I got a list here
of fifty four car companies that that do and some
of these do still use the words system in the
in the title. Got a couple of examples. Hang, yeah,
hear Avis rent a car system. You know that Avis
was It's called Avis rent a car system. But we'll
get to why that. Uh, there's an interesting part there
(18:41):
why it's okay? Well, Avis does come up later in
the in the history here, so we should point out
though also that this rental car business that he started
his demographic or his market darren Omaha, and then later
in more than fifty cities throughout the Union, it was
different from what you would see to day because we
have to remember that the availability of cars for much
(19:05):
of the US population, even once the Model T came out,
was still relatively low. Like a car was an expense
that a lot of people couldn't afford to buy, to
own and maintain. But if they wanted to do a
test drive, if they wanted to do a joy ride,
then for the completely reasonable price only ten cents per mile,
(19:25):
they could get it. So a lot of these people
were renting these cars just to experience driving. Yeah, that's true.
They weren't, you know, they weren't going on a trip.
The first time behind the wheel would be behind the
wheel of you know, one of Mr Saunders rental vehicles yourself.
So he wasn't the only guy to do this either. So, um,
in nine there was a competitor, and the competitor his
(19:48):
name was Walter Jacobs, and he started with about a
dozen or so for model ts as well. Um, actually
he started a little bit sooner than that. N was
when he really started to pick up steam. So in
the mid nineteen early nineteen twenties he was already doing this.
By nineteen twenty three, Jacob's business gross more than one
million dollars in annual sales, making him the main competitor
(20:10):
for Saunders. So I guess Saunders isn't about the same uh,
you know position at this point. So I guess the
one thing that the Saunders has going for him still
was that, you know, this main competitor of his his
way out in Chicago, because that's where that's where Jacobs
is So Chicago, you know downtown. Uh that seems like, um,
that smart place to have it, right. I mean a
lot of people there, a lot of people need vehicles
to get you back and forth runtown if you can't
(20:32):
find a taxi. Guess how old he was when he's
when he started the business, not when it blew up.
Always started it in like nineteen eighteen, no idea twenty
two two, my friends, very true, very shrewd. To start
a business when you're very young like that, that's smart.
And they both end up they after they have this
rapid expansion, they both end up selling their business to
(20:55):
another to another business. Yeah. Well, in the case of Jacob's, um,
you know, Walter Jacobs, he eventually met Mr John Hurts,
who was at the time the owner of the Yellow
Cab Manufacturing Company in Chicago. And of course this is
a wealthy businessman. He's got, you know, something already going
for him. And this is around right at the height
of um, you know, Jacob's business or what he thinks
(21:17):
is the height of his business when he's in you know,
like a million dollars in annual sales. As I said,
uh so, Hurts decides he's gonna buy that rental company
from him, and that gave birth to what is known
as well what would eventually become one of the largest
rental car companies in the nation at that time. And
Hurts Rental of course, but later General Motors would buy
(21:37):
out the Hurts Yellow Cab Manufacturing Company, and I think
that happened in uh oh, I don't know the year
that happened, because later that it comes up that um,
there's there's more sales that that go on, and with
this whole thing, it gets very complex. So GM buys
out the Hurts Yellow Cab Manufacturing Company. Of course there's
the rental car portion of that business, and that that
(21:58):
is then renamed the Hurts Drive Yourself System, or at
leat at the time it was named the Hurts Drive
Yourself System, and Hurts then in nineteen fifty three, so
this is thirty years later, Hurts comes back and repurchases
the business and changes the name to the Hurts Corporation.
So that's the birth of like the big overall thing,
(22:18):
and at some point in this history. This is where
it gets really complicated. At some point in history, Ford
owned it through a group called the park Ridge Corporation,
and Volvo of North America actually invested in the park
Ridge Corporation. So it's kind of like a Ford Volvo
thing at that point. So so we've got General Motors,
Ford Volvo involved, and then later UM, I think an
(22:41):
entire group of UM what we call my guess investors,
UM private equity equity group, that's what we call that.
They all went together and purchased the Hurts, the Hurts Corporation,
and now that's run by several different groups as part
of one bigger group, if that makes sense. In the
private equity groups that own one company, and this kind
of stuff can feel sort of like a three card
(23:03):
monte at times of different companies. I apologize for the
gaps in the history. Oh no, no, not at all.
We've got We've got some gaps to fill in here
with Joe Saunders, so we said nineteen sixteen, right, Josiah
Ellis Saunders launches his business. At the time, his main
(23:24):
business was real estate, so he was already he was
already established in the business world. As he's succeeding when
when we um when we last left him in this
part of the story, as he's succeeds like the twenties,
he's uh, he's expanded. This business is huge. It is
going like gang busters. And then at the same around
(23:49):
the same time, I want to take you to nineteen
a guy named Warren Avis's working in ip Slay, Anti, Michigan, UH,
and he starts a business renting three cars at the
Willow Run Airport, and over the next few years he
(24:10):
also expands. And then in nineteen fifty three, it's official
Avis is the second largest car rental company in the
United States. Pretty big, pretty big, but he gets bigger.
He started with three cars, right, He started with three cars,
so he already kind of had a jump. Yeah, that's
(24:31):
kind of unfair, but he wasn't there first either, right.
But Saunders sells his company to Avis in nineteen fifty five. So,
going back to our earlier comments on how surprising is
that their their car companies or rental companies that use
the phrase system, some of that might be in the
(24:54):
UH in the business d n a of Avis from
Saunders could be So what caused all this though, like
what caused as Avis to go to the airport was that,
you know, just after World War Two, the number of
airline passengers rapidly grew at this point, you know a
lot of more, a lot more people were using airlines
for travel to get you know, to and from you know,
(25:16):
all over the country really all over the world really
and parts of it mostly talking about US companies here.
So um, yeah, it was it was really opening up
and there was um, you know, there really weren't openings
for something like this there. He had to talk to
the airports and get them to greet allowing to put
a booth in and allow him to have some lot space.
And I'm sure all that was rented and it was
you know, something he paid for and probably weren't wild
(25:38):
about it, but super smart because he became what they
called the airport king at the time. Um you know this,
Mr Warren Avis. And again starting with just three cars,
I mean, that's that's how little it took to really
start something at that time. But man did he grow.
It grew into huge business. As you said, he sold
he bought um what was it, the Saunders Okay, so
(25:59):
you bought that and then There's another little twist in
this whole thing, because Joe Saunders had well, he said
he had bankruptcy issues in the in the Great Depression,
right and later in the nineteen forties and possibly the
early nineteen fifties. I'm not exactly sure when this all
went down, but there was a group of independence twenty
four independent car rental companies in St. Louis, Missouri that
(26:20):
banded together and they formed what is known as the
National Car Rental System, and that was in the late
nineteen forties, and that is National Rental Car which we
still know today. So Saunders was still a part of
that whole thing. But the timing on this doesn't make sense.
When I look at a lot of different sources here,
I think a lot of the numbers have been maybe
transposed and pet I think so. But just know that,
(26:42):
you know, he was still around as far as the
late nineteen forties, early nineteen fifties, and and part of
you know, part of the rental car system I guess
in the United States, and then I guess in the
nineteen eighties if we want to jump forward a few
decades or because a lot happened along the way, there
are other independents that sprang up. In fact, I have
a list of fifty for rental car agencies here in
the United States, and that's just here here in the
(27:03):
United States alone. There's a few I think that are
mentioned from outside that I've got here, but probably, yeah, maybe,
And I think there's even an Irish rental car company
here somewhere. Um. I will not go into the list.
I will spare you the details on that. You can
look at up if you want. But the eighties, I
guess we're really kind of cutthroat for a lot of
rental car companies. And I guess one thing that happened
(27:26):
then at that time that was good was that some
of the bigger automotive companies decided to take an interest
in the rental car companies, which they hadn't really in
the past. And I know that Saunders was big with
I think with first initially forward, but then Chrysler jumped
on as being something that he he had. He offered
Chrysler products for a long time, and even back then
in the nineteen twenties, I think he had something like
(27:47):
a million dollars worth of Chrysler products at his disposal. Um,
you know, he was purchasing or you know, had already
owned or was you know, somehow leasing or what. I'm
not sure exactly how that all worked out, but um,
really to the point, they weren't quite as involved as
they were in the nineteen eighties and and so so
big companies like four in Chryst. So we're purchasing controlling
interest in a lot of these rental car chains, and
(28:10):
today a lot of these chains are still controlled by
some of the big manufacturers, of the big automotive manufacturers
all around the world. Really, oh yeah, because and think
about it makes sense from an auto manufacturing perspective. If
you have that controlling stake and an exclusivity agreement, then
you already have a built in market with a predictable
demand four products exactly you can sell. And you know
(28:33):
how this works when you go to uh, you know,
I don't know exactly which companies deal with which I
should have looked at up before I came in, I guess,
but which companies have which products? So let's let you
go to and just just gonna just uh, let's say
you go to Hurts and they have all four products. Um,
there's a reason for that. If you go to Avis
and they have all General Motors products. There's a reason
for that. And and and that's the thing is that
they can get these entire fleets of fleets of vehicles
(28:56):
out there, um and and again they can go to
the manufact sure and say like, well, it's time for
a new set of vehicles. Our round cars are getting
kind of worn out here. It's been about three years,
tough youse all that, you know, maintenance everything, but um
and you know, they've got a brand new vehicles then
at that point, and and of course the customers are
going to appreciate that because none of the cars are
less than two years old or you know whatever. They
can advertise, so it's it's good for everybody involved. And
(29:18):
they can sell them as used vehicles, so it all
makes sense and really win win. Yeah, and then there
was another big hit to the industry I guess around
nine eleven, two thousand one. Uh, difficult time. People weren't
quite traveling the way that they had in the past.
But there's been kind of a rebound recently, and I
think the industry has actually doing pretty well at this
point from what I've heard. And if we want to
(29:39):
go toward some more recent information that we see that
these companies are still relevant in the current age. There
there's some competitors coming out now right like the same
way that Uber is seen as a competitor to the
taxi industry. Companies from companies who either sharing or economy
(30:02):
like zip Car, could be seen as as potential rivals
that Avis Budget Group, which is their technical name. They're
given name as Budget System. It's Avis Budget Group Incorporated.
Which is a shame they dropped System, but I bet
a subsidiary still rocks it. Somewhere in two thousand thirteen,
(30:26):
they made a four hundred and nine one million dollar
offer to buy out zip Car. Was this four d
ande million really in twenty half of nearly half a
billion dollars to buy out zip car because they just
simply didn't want the competition, probably right, I guess they
just wanted to have, you know, to have the rest
(30:46):
of the market. Because what we're seeing is something that
you and I and No have talked about occasionally in
past and listeners some of you have written in about
it that auto manufacturers believe there is a trend amongst
younger generations to not want to own a car. This
I think is kind of a broad brush to paint with,
(31:11):
because there are very few things that happened to a
generation that affect all members of the generation except when
they were born. Anyhow, the industry pundits who were watching
this kind of stuff said that this signal to change
because originally Avis had been against this kind of thing. Yeah. Sure,
(31:33):
And I wonder if their their intention was to bring
it into foster it to to continue to run it
as is. You know, if they were going to just
simply rename it Avis, uh, you know whatever, Avias, zip
Car or whatever they would name it, um but that
same idea, or if they would just simply squash the
whole idea and make sure that it doesn't happen. Oh
(31:53):
and they did. I mean, I'm sorry, let me not
bury the lead here. They did buy zip Car, and
zip Cars ceo resigned hours after hours, really hours. The
zip Cars CEO at the time was a guy named
Scott Griffith. So Avis continues to grow, and rental car
companies or something like them are always going to be around,
(32:16):
I think, because you know, even if we look at
a future that people have talked about before where autonomous
cars become what you rent, even in that case, the
financial calculation is still going to be the same. We're
still gonna have people who want the convenience of a
car without the responsibility of owning a car. So they
answered my question then right away. Thank you. I appreciate
(32:39):
that because so AVIS is fostering that idea they're going
to They're gonna say, uh, this is this is the
model that we believe in that it will work. It's
gonna be maybe the new direction for our our company. Um,
you know, possibly. I think they're going to hang onto
the rental car part of it as well instead of
just the the sharing part of it. So they probably
have both. But is that the way that you know,
(33:00):
all the other uh rental company agencies are going to
go as well? I mean, are they gonna do the
same thing or something similar. They're gonna either purchase one
it's already out there, you know, another another sharing system,
or are they going to are they going to stick
with the kind of the old school method of rental
car companies? And I know we're talking about shorter rentals
for you know, like a zip car, uh, you know,
(33:20):
rental versus something that you know usually when you're go
into an AVIS or you know, a national or wherever.
You're renting a car for at least a day, if
not a week or even a month for vacations or
you know whatever. This is a This is a completely
different model for them to follow. I wonder if other, uh,
you know, companies are going to follow suit, If they're
going to decide that, you know, we need a part
of our business that can do these hourly rentals in
(33:41):
town like zip car can do. I would not be
at all surprise. Here's another question. Are we going to
find situations where someone rents a zip car to work
as an Uber driver? Oh? Really, that's surely it's not legal.
A very weird world. Yeah, that's straight. Wouldn't it be funny?
(34:04):
Like if you if you call for an Uber vehicle
and a zip car shows up, you'd almost be cautious
to get in. I think that's they can't be right.
You have to be. It had to be in the notes, right,
there would have to be I don't think. I don't
think you can do that. It has to come down
to an insurance and liability issue at that point. You know,
Uber has started a new thing where they'll they'll ask
you if you want to car pool with strangers and
(34:27):
the times. This must have been a recent time, a
recent change, because I don't use it all that often.
But when I used it last, it asked me how
many seats I wanted in the car, And I got
very excited for a second because I thought, Wait, if
I pick one, am I going to end up in
something really cool like a single seat sports car? Right?
Like like a yeah, like a two seater? Well, yeah,
(34:49):
I guess they'd be the driver, right, the driver is
also there. Sure, I don't think there's gonna trust me
with a car. But but no, it's just a car
pooling thing, so we do know the rental business has changed.
That's that's a range twist on this whole thing. I
had no idea they were asking you if you want
a car pool. I don't want to. I generally don't
want a car pool with strangers. I guess they're making
this crappier every day. What's good? That's I just can't
(35:10):
I'm getting hives thinking about it. Ben, Well, that you
might as well take the train. The train doesn't go
a place as I need the train to go. Sketchy,
I know, I just mean the situation where you just
never know is getting on and how damn close they're
gonna sit to you as well. That's the man is
Joey as you gets tell my co host is not
the biggest fan of Marta. You are getting my dander
(35:33):
up on this one. It's tough. Well, we better head
out of here then before before you get in an
apocalyptic rade. Well, thanks Jeff for the idea for the
you know, the first rental car and you were right.
You know that that there's the official first rental car
company here in the United States of the the US, and
the US story exists the rent car Yeah, exactly right.
(35:54):
But sorry for the twists and turns on the history
along the way with with Jacobs and Saunders and Avis
and National and all those it's just again, you go
to different sources for all this stuff. You're gonna have
slightly different dates, and sometimes those work and sometimes they
don't work together. And we're just trying to piece it
all together. But it's really a complicated history when you
when you look at who's buying what and who owns what,
(36:16):
and all these private equity firms that own big, big companies. Now,
sure that makes it even more difficult. So dig into
it if you like. To on your own and get
the history for individual companies. That's probably the best way
to do it. And thank you listeners, and thank you
Scott for humoring me through my Oregon Trail intro that
occurred halfway through the episode. I think I just wanted
(36:39):
to talk about the Oregon Trail, man, I guess, so.
I mean I might revisit that game. I guess, but
I don't know. It might still be just as stressful
as it always was. I think the soldiers just coloring.
I used to play it on hard mode and put
people I didn't like as my band and not and
like take them on this death march and not feed them. Oh,
wolves are attacking from the back. That's a Christina. We'll
(37:00):
do nothing about that. Yeah, I was, you know, I
did some good moves as well. It did make it
to California a few times. Anyway, Listeners, we hope you
enjoyed this episode, and thanks for the excellent question, Jeff.
If you would like to let us know some inside
tips about rental cars or your story of your best, worst,
the strangest rental we'd love to hear it. You can
(37:22):
also find us on Facebook and Twitter, where we are
car Stuff hs W. If you're about to rent a
car and want some tips, do check out our audio
podcast on that subject, which is available at our website
and let's see what's Oh, there's one more thing. If
you want to take a page from Jeff's book, an
electronic page and send us some mail, some electronic mail, Uh,
(37:46):
then we'd love to hear from you. You can write
to us directly at car stuff at how stuff work
dot com. For more on this and thousands of other topics,
how stuff works dot com. What a snare? What you think?
Send an email to podcast at how stup works dot com.
M m mmmmmmmmmmm
Go behind the wheel, under the hood and beyond with
car Stuff from house stuff Works dot Com. Hi, welcome
to car Stuff. I'm Scott and I am Then we
are joined as always by our super producer, Noel the
Full Tank Brown, The Full Tank Noel rent Direct Brown. Right, Yeah,
(00:27):
it's good. We've got a few of these. Maybe, so
we're talking about something, uh, a little bit strange today,
not not necessarily strange, but it's outside of some of
the typical topics we explored in this ship. Yeah, I
think so. So you if you were like many other
many other people have at some point rented a car,
(00:48):
I am anomalous and that I have not ever personally
rented a car. Wait a minute, I thought, Okay, when
we were talking about this ahead of time, I thought
maybe you said you just hadn't done it very freakquently.
But I didn't know that you have never rented personally
rented a car. You said that your parents had, that
you've been with them. My folks have rented a car,
My friends have rented cars, and I've ridden with them.
(01:11):
But I have personally never rented a car. I have
become very close all I have come very close rather
to doing a move that I heard about from one
of my friends on the West Coast. What's that renting
a supercar for like a weekend? Oh yeah, so well,
so you're you're telling me that maybe your first rental
(01:32):
car experience would be like a Ferrari or some wouldn't
that be wouldn't that be cool? That would be cool?
It also sounds if you know, man, I'm full of
these hair brained schemes that seemed like great ideas at
the time. There was you know, we talked we talked
about this a little bit in the Pony Car episode two. Yeah,
the possibility of renting uh you know, some of the
(01:52):
pony cars that these rental companies have and using that
as kind of a longer version of a test drive
for yourself. Absolutely, and that's a good idea. I don't
know why. And I think we've talked about renting supercars too, Yes,
we have. It was a few years back, but that's
that's where the seed had been planted that brought me
to that that the conversation I had with this guy
(02:13):
out in l a Is planted the seed for us
talking about renting the supercars, which has later led to
this enormous scheme. Picture me Scott in an empty apartment
with all these pictures of supercars up on the wall,
and then like red Yarn joining them, you know, like
a conspiracy wall Sea. That's not true. I just have
(02:35):
looked at it a lot. I haven't I haven't made
a wall. You'd have to replace your other collage of
the same, right, Yeah, So what what what car did
your friend rent? Do you remember? Do you recall? Uh?
He did in fact at a Ferrari. I can't remember
exactly which one, but I do remember telling him that
I first off, I didn't know you could do it.
(02:56):
And secondly, and I remember telling him like, that's a
foolish decision because what if literally anything bad happens to it.
And he said, you know, it's like, no, I pay
you to get the insurance. I mean, it's gonna be fine.
But and I don't know. I don't know if you're listening. Jake.
(03:18):
Jake's a horrible driver. Oh boy, he's not a good driver,
and nobody's perfect. But he made it through. He had
a great time. The Ferrari is fine. Okay, Well that's
good news, because things could go horribly wrong in that situation,
of course, But you know that that service has offered
here in Atlanta. Yeah, yeah, yeah, yeah, So you know
you got potential. It's there's a possibility that's really happening
(03:39):
for you. Then this could be big for me. This
could be my everything turns around moment. It could be
all right. So that's I didn't know that ahead of time.
Now I've I've rented many many rental cars on the
way and something that I didn't want to have to rent,
but I did. Um, you know, the the gap of
time between when my old car died and I got
the current vehicle that I have, I had about two
(04:00):
weeks where I had to rent a car that was
the most recent and yet Yeah, and you know surprised,
you know, when you walk out to the lot, there
was a mini waiting for me. And I didn't expect
that all that was gonna be in like a I
don't know, like a Chevrolet Speck or whatever they call it,
you know, like something really uncomfortable and small as an
economy car rental trying to get something very very small
and uh, and I was really happily surprised to see
(04:21):
a just at standard Cooper. It wasn't a Cooper S
or anything like that. I'm sorry. It was just a mini,
not a Cooper s or anything like that, just a Mini.
But it was a lot of fun to drive for
those two weeks. And you know, along the way, we've
had some I guess interesting vehicles, you know, crappy vehicles,
and they've been some really good ones. And I've had
the times where carrying a lot of gear, a lot
of luggage and you know, camera gear and stuff, and
(04:44):
you have to rent like a mini van, so that's
kind of a drag, but they're comfortable. Um, you go
to Florida and you rent cars and they're kind of
musty smelling. You go to you go out West and
they're all dusty inside and even if they even after
they cleaned them, they're dusty. And their tips and tricks
that you can find about rental cars to you know,
like like not just the environment in there, but one
(05:04):
hidden secret of the rental car industry. And I heard
this from people who work for, you know, a different company.
I'm not going to name the specific company, but you
know there there are quite a few and there are
a few big, big guys in the business. Anyway, here's
the secret if you're renting a car to drive one
(05:24):
way and drop off at another location. Your likelihood of
getting the crappiest car on the lot just skyrocketed. Really
trying to pass it off to somebody else because they
don't want to have to have it, right, That's what
I heard. I don't know if it's true, because again,
I've never rented a car and work. Now you're making
me think, because well, I've had, you know, and I've
(05:45):
talked about them on the show, and I know that
there was one vehicle somewhere along you know, the history
of the show that I rented. It was just awful,
and I think it was out west somewhere, and it
seemed like every button that I touched for, every knob
that I tried to turn, fell off in my hand,
and you know, like the doors that the scenes didn't fit,
and it whistled when we were driving. And rental that's
(06:06):
the thing I'm struggling to remember right now. It possibly was,
I just can't remember. I mean, surely that doesn't happen
in every place, because as we know from our earlier
episodes on rental vehicles, they're tiered rental categories, right, so
you can get a luxury vehicle. You can get economy
midsize exactly. Yeah, utility, so maybe you just get the
(06:27):
worst of that division. It could be. And you know,
there's a few other little things that we'll talk about
along the way here today, but we should probably get
this out of the way right now. What we wanted
to discuss today on Today Show. The main focus will
be about the very first rental car company, because that
comes from a listener. It's a listener suggestion. Yes, and um,
I hope not cutting a short here, but we can
(06:49):
come back to some of this other rental car stuff absolutely. Um.
This comes from a listener as a Facebook message, and
it comes from a listener named Jeff O. And Jeff
wrote in ohh boy, Ben, this is like a year
ago May May of but this is one that we
caught in our Nuts and Bolts episode just recently, and
(07:09):
we said, you know, we did the whole apology thing there,
so let's just move on. So Jeff run in and said,
I have a suggestion for a podcast episode since you
just did the U Haul episode. Oh boy, that was
a long time. We just did the U Haul episode. Um,
the idea is rental car history. I have a personal
interest in this as the first rental car companies started
(07:30):
in Omaha, Nebraska. So all right, so that's that's Jeff's suggestion.
And we dove into this and uh boy, that may
or may not be true as we find out. Yes,
there is a bit of murk to the story, contentious
beginning to this. We're not sure if that is really
truly the case or not. It's generally credited as being
(07:51):
the first one though. Yeah, he's right, there are competing narratives.
Here is the intro. I remembered that I wanted to
do with the getting So folks, we were talking off
air and I said, oh, Scott, I've got this great
intro we could jump in. Well, how about this. Let's
pretend right now in the middle of the show. This
is the beginning of the show. How about that. So
(08:12):
here's what I'll do AGAINNA do my normal intro. Okay, yeah,
and uh and and then you pick it up and
jump in right, Hi, and welcome to car stuff. I'm Scott,
I'm Ben. As always, we're joining with our super producer Noel.
Second take Brown, Right, that's a good one. It's apropo. Okay,
So here is our This is like a mid Engine intro,
(08:36):
isn't it? Here's here's our mid show intro. Uh that,
Now that we are getting to Jeff's question, Scott, did
you ever play at a computer game called The Oregon Trail? Yes? Did?
What do you think of it? It was the worst
graphics I've ever seen in my life, But I don't
look surprised, and I say that it was it was?
(08:58):
It was m have a lame game. I mean, really honestly,
wasn't it. Wow? I completely disagree with you. I love
did that game? Yeah, we'll see. I didn't have a
lot of experience with it, but I know exactly what
we're talking about, and I did play it, but I
just never caught my attention enough to to continue on
with the game. Yes, I am. I think part of
it is that I and a lot of people in
(09:20):
my generation associated with being able to have fun during
school because it's a game you'll play at school. So
for anyone who's not aware of, The Oregon Trail is
a game that was pretty popular in schools across the
US for a while, wherein you are the leader of
a wagon train essentially group of pioneers crossing the continent
(09:44):
to settle in California, and you've got a lot of
decisions to make on the way. Yeah you you You
have the option of starting off as the poorest possible
person or all the way up to a banker who
has more money, but you get less points. At the
in the game, you choose your people who will be
in your band. You have to feed them, clothe them,
(10:06):
try to keep them from dying. Can I tell you
why this? This game really wasn't one of my favorite games,
and again very limited exposure to it. However, I don't like.
I don't like, and this is right through to today.
I don't like games that cause undue stress. And that
game causes stress. It's like one that you if you
make the wrong decision, part of your party dies. I
(10:27):
mean that's you take the wrong trail and you go
through the mountains, you hit with a storm. Uh you
know that, then part of your party dies and you've
got to find food in a in a just an
unbelievably difficult situation. It's not that you're really doing that,
it's just that it causes stress. And my daughter today
will play apps, and you know the games that that
involve like um, making cakes for somebody, and you have
(10:48):
to like get the right ingredients and mix them together,
put it in the oven. Then a new customer comes
in and request something different. You're doing that. You gotta
go over here and get that, and you're playing like
the part of a server in a restaurant. And it's
stressful to me. All that stuff is very Just watch it. Yeah,
I just don't. I don't need that in a game.
I just want to play you know whatever, Space Invaders
and be done with it. See that's old school. Well
(11:10):
here's the sorry, we know I feel. I feel that
way sometimes. Two about video games. Well, what's interesting about
the Oregon Trail as a game is, although it is,
you know, a heavily romanticized and simplified thing, it does
get you thinking about history. And one of the cool
things that we talked about off the air, as we're
(11:31):
getting into the ambiguous beginnings of rental cars, was that
the rental business is much older than vehicles. Yeah, that's so.
So we're talking about rental cars, but this is this
is a rental of another kind, and and playing into
this well we'll get to it in just a moment,
but going all the way back to ancient Rome, there
(11:52):
were rental chariots along the way, so they were able
to rent a chariot in ancient rome Um. There are
a lot of types of uh, rental vehicles in any
kind of civilized country really, and sure you know somebody
was set up a business and say I've got this
this to offer and then included you know things like
buckboards and and broms and you know these these old
horse carriages that you know, people needed but maybe didn't
(12:15):
have the money to buy, so they would rent one.
And even wagons. Well, yeah they're wagons, So this is
what you're talking about, right, Yeah, like covered wagons, kind
of stoke wagons. Yeah, so I don't understand exactly how
that works. Now thinking about that game, you're headed out west,
you're starting the east. This is like a one way
rental thing, because there's no way you're gonna be returning
(12:36):
that kind of stoke a wagon unless they have a
second location that's out west that that accepts the wagons. Right,
that's a business model. Maybe you pay, you pay a
fee to the people on the east coast, and when
you get to the west coast they refund part of
your fee. Oh, I don't know what kind that's the
incentive to turn it in. What kind of condition would
that wagon being when it arrives on the west coast.
(12:57):
And plus so I mean along the way, you're you're scavenging.
Scavenging that for for would likely gone through many many
sets of wheels along the way. Well, it wasn't yet,
It wasn't the perfect business model obviously, And if the
rumors surrounding rental companies are true and have been true
since time began, then odds are those folks on the
(13:17):
west coast, We're not giving you the best wagon. But
you know what, what a fantastic way to really get
people to you know, make this journey because a lot
of people couldn't afford to do it. They couldn't afford
their own wagon. And for them to be able to
rent the wagon from somebody on the east coast or
somebody on the east side anyway, so you know, the
east side of the Mississippi maybe and then head out west,
that was a that was a game changer for them.
(13:38):
It allowed them to do that allowed them to to
make progress were before they wouldn't have been able to
make that right absolutely, it would have been stuck right
where they were because they just simply didn't have the
means to to have the vehicle to get there, and
so that really opened up the West in a way.
And again that's not really a rental car. But for
the first time we hear about Now, okay, before we
get to this then, so cars are generally accepted to
(14:01):
have been invented, like the first vehicle is commonly referenced
as as happening in eight, right, what we accept as
the precursor to the modern automobile. Correct, you're right, so
eight we're talking that's right, At least within a year
or two. Either way of that, you know that that
other manufacturers are creating vehicles, and you know the popularity games.
We we've gone through that whole thing in the past.
(14:22):
But the very first reference to a rental car company
or a company that would rent vehicles comes from a
Minneapolis journal in nineteen o four. So the middle of
nineteen o four and July, a bicycle shop devoted a
line of an advertisement that announced that it offered cars
for rent. So this is, ah, it's not an entire
(14:43):
business that's centered around car rental. It's not. It's not
you know, the very first car rental agency or anything
like that it's just a business, a bicycle um shop
that that offers we have we have vehicles for use.
And that's really nothing different than what's happened all throughout
history from as it at ancient rome on um. So
it's that idea just brought into the modern day. That's
(15:05):
the very first reference of being able to rent a car,
and again not the very first rental car business, because
that happens in nineteen sixteen, right, that happens in nineteen sixteen,
starts with a guy named Joe Saunders. Now this is
the guy that Jeff was talking about. This is who
(15:26):
you're talking about, Jeff. Joe is the epitome of the
American dream. At this point, he has borrowed one Model
T in nineteen sixteen, and that's how he starts his
car rental business exactly. You know what, I'm gonna take
one little side note here because there's something that happened
in between that I find interesting. Are you talking about
the Germans? The Germans? Yes, now the Germans. So again
(15:49):
this is just another asterisk in history here, but there's
a car company that still exists. In fact, it's the
company that I rented that many from, yeah, called six Yeah,
s I X T and thats a German rental car
company that was founded in nineteen twelve and they established
their their business with just three cars for rent. So again,
Germany had this in nineteen twelve, and it wasn't until
(16:12):
nineteen sixteen when this Nebraska man, as he said his
name was Joe Saunders. Yeah. Yeah, that's when he had
his Model T business. So he's like the first, this
is the first US rental company, yes, car rental company. Yes, so,
so Jeff is accurate and saying it's the first car
rental company. That's just that, but also in the United
(16:34):
States because the very first car rental company would be
that sixth German company in nineteen twelve, and people love
this idea. By nineteen seventeen, his company, which called the
Ford Livery Company at the time, was renting out eighteen
Model Ts. Yeah did you tell them how much yet?
Because he would charge rents ten cents a mile in
(16:56):
order to cover the wear and tear on his beloved
Ford vehicles. And the way the way that he did
that was he fixed a a mileage device, something that
would float on the axle. I think that would would
tell you have account rotations and tell him the mileage
of that vehicle. Uh, so that he'd be able to
charge them whenever they return the vehicles. So very smart way.
And then you'd do that you fixcept to the front axle,
(17:16):
I think, right. And here's another part of this. First off,
I just want to emphasize again that he started the
business with a borrowed car, which is kind of like
renting a car to start a rental well, yeah, kind
of in a way, right. But and then one year
later to have eighteen and then and then just what
seven years after that in he had operations in twenty
(17:38):
one states, so he grew exponentially at that and that's
like fifty something cities, fifty six cities. Yeah. And you
know what I find funny about this that this name
you'll see this on on some modern companies too. And
I'll listen to modern companies in a moment, But the
names of these it's not exactly what you think. You
think it'd just be like Saunders Rental or something like that.
He always included the word system, so he called himself
(18:00):
the Saunders Drive at yourself system. Then he called it
the Saunders System, and it was called the Saunders car
and truck rental system. And you think, I think that's
that's unique to him. But other companies also used that
system along the way. And there's a few more that
we'll mention here today in a little bit more detailed.
But um, some of the others that that use it
along the way, and oh I had them marked here,
(18:20):
but maybe not anymore. Shoot, I got a list here
of fifty four car companies that that do and some
of these do still use the words system in the
in the title. Got a couple of examples. Hang, yeah,
hear Avis rent a car system. You know that Avis
was It's called Avis rent a car system. But we'll
get to why that. Uh, there's an interesting part there
(18:41):
why it's okay? Well, Avis does come up later in
the in the history here, so we should point out
though also that this rental car business that he started
his demographic or his market darren Omaha, and then later
in more than fifty cities throughout the Union, it was
different from what you would see to day because we
have to remember that the availability of cars for much
(19:05):
of the US population, even once the Model T came out,
was still relatively low. Like a car was an expense
that a lot of people couldn't afford to buy, to
own and maintain. But if they wanted to do a
test drive, if they wanted to do a joy ride,
then for the completely reasonable price only ten cents per mile,
(19:25):
they could get it. So a lot of these people
were renting these cars just to experience driving. Yeah, that's true.
They weren't, you know, they weren't going on a trip.
The first time behind the wheel would be behind the
wheel of you know, one of Mr Saunders rental vehicles yourself.
So he wasn't the only guy to do this either. So, um,
in nine there was a competitor, and the competitor his
(19:48):
name was Walter Jacobs, and he started with about a
dozen or so for model ts as well. Um, actually
he started a little bit sooner than that. N was
when he really started to pick up steam. So in
the mid nineteen early nineteen twenties he was already doing this.
By nineteen twenty three, Jacob's business gross more than one
million dollars in annual sales, making him the main competitor
(20:10):
for Saunders. So I guess Saunders isn't about the same uh,
you know position at this point. So I guess the
one thing that the Saunders has going for him still
was that, you know, this main competitor of his his
way out in Chicago, because that's where that's where Jacobs
is So Chicago, you know downtown. Uh that seems like, um,
that smart place to have it, right. I mean a
lot of people there, a lot of people need vehicles
to get you back and forth runtown if you can't
(20:32):
find a taxi. Guess how old he was when he's
when he started the business, not when it blew up.
Always started it in like nineteen eighteen, no idea twenty
two two, my friends, very true, very shrewd. To start
a business when you're very young like that, that's smart.
And they both end up they after they have this
rapid expansion, they both end up selling their business to
(20:55):
another to another business. Yeah. Well, in the case of Jacob's, um,
you know, Walter Jacobs, he eventually met Mr John Hurts,
who was at the time the owner of the Yellow
Cab Manufacturing Company in Chicago. And of course this is
a wealthy businessman. He's got, you know, something already going
for him. And this is around right at the height
of um, you know, Jacob's business or what he thinks
(21:17):
is the height of his business when he's in you know,
like a million dollars in annual sales. As I said,
uh so, Hurts decides he's gonna buy that rental company
from him, and that gave birth to what is known
as well what would eventually become one of the largest
rental car companies in the nation at that time. And
Hurts Rental of course, but later General Motors would buy
(21:37):
out the Hurts Yellow Cab Manufacturing Company, and I think
that happened in uh oh, I don't know the year
that happened, because later that it comes up that um,
there's there's more sales that that go on, and with
this whole thing, it gets very complex. So GM buys
out the Hurts Yellow Cab Manufacturing Company. Of course there's
the rental car portion of that business, and that that
(21:58):
is then renamed the Hurts Drive Yourself System, or at
leat at the time it was named the Hurts Drive
Yourself System, and Hurts then in nineteen fifty three, so
this is thirty years later, Hurts comes back and repurchases
the business and changes the name to the Hurts Corporation.
So that's the birth of like the big overall thing,
(22:18):
and at some point in this history. This is where
it gets really complicated. At some point in history, Ford
owned it through a group called the park Ridge Corporation,
and Volvo of North America actually invested in the park
Ridge Corporation. So it's kind of like a Ford Volvo
thing at that point. So so we've got General Motors,
Ford Volvo involved, and then later UM, I think an
(22:41):
entire group of UM what we call my guess investors,
UM private equity equity group, that's what we call that.
They all went together and purchased the Hurts, the Hurts Corporation,
and now that's run by several different groups as part
of one bigger group, if that makes sense. In the
private equity groups that own one company, and this kind
of stuff can feel sort of like a three card
(23:03):
monte at times of different companies. I apologize for the
gaps in the history. Oh no, no, not at all.
We've got We've got some gaps to fill in here
with Joe Saunders, so we said nineteen sixteen, right, Josiah
Ellis Saunders launches his business. At the time, his main
(23:24):
business was real estate, so he was already he was
already established in the business world. As he's succeeding when
when we um when we last left him in this
part of the story, as he's succeeds like the twenties,
he's uh, he's expanded. This business is huge. It is
going like gang busters. And then at the same around
(23:49):
the same time, I want to take you to nineteen
a guy named Warren Avis's working in ip Slay, Anti, Michigan, UH,
and he starts a business renting three cars at the
Willow Run Airport, and over the next few years he
(24:10):
also expands. And then in nineteen fifty three, it's official
Avis is the second largest car rental company in the
United States. Pretty big, pretty big, but he gets bigger.
He started with three cars, right, He started with three cars,
so he already kind of had a jump. Yeah, that's
(24:31):
kind of unfair, but he wasn't there first either, right.
But Saunders sells his company to Avis in nineteen fifty five. So,
going back to our earlier comments on how surprising is
that their their car companies or rental companies that use
the phrase system, some of that might be in the
(24:54):
UH in the business d n a of Avis from
Saunders could be So what caused all this though, like
what caused as Avis to go to the airport was that,
you know, just after World War Two, the number of
airline passengers rapidly grew at this point, you know a
lot of more, a lot more people were using airlines
for travel to get you know, to and from you know,
(25:16):
all over the country really all over the world really
and parts of it mostly talking about US companies here.
So um, yeah, it was it was really opening up
and there was um, you know, there really weren't openings
for something like this there. He had to talk to
the airports and get them to greet allowing to put
a booth in and allow him to have some lot space.
And I'm sure all that was rented and it was
you know, something he paid for and probably weren't wild
(25:38):
about it, but super smart because he became what they
called the airport king at the time. Um you know this,
Mr Warren Avis. And again starting with just three cars,
I mean, that's that's how little it took to really
start something at that time. But man did he grow.
It grew into huge business. As you said, he sold
he bought um what was it, the Saunders Okay, so
(25:59):
you bought that and then There's another little twist in
this whole thing, because Joe Saunders had well, he said
he had bankruptcy issues in the in the Great Depression,
right and later in the nineteen forties and possibly the
early nineteen fifties. I'm not exactly sure when this all
went down, but there was a group of independence twenty
four independent car rental companies in St. Louis, Missouri that
(26:20):
banded together and they formed what is known as the
National Car Rental System, and that was in the late
nineteen forties, and that is National Rental Car which we
still know today. So Saunders was still a part of
that whole thing. But the timing on this doesn't make sense.
When I look at a lot of different sources here,
I think a lot of the numbers have been maybe
transposed and pet I think so. But just know that,
(26:42):
you know, he was still around as far as the
late nineteen forties, early nineteen fifties, and and part of
you know, part of the rental car system I guess
in the United States, and then I guess in the
nineteen eighties if we want to jump forward a few
decades or because a lot happened along the way, there
are other independents that sprang up. In fact, I have
a list of fifty for rental car agencies here in
the United States, and that's just here here in the
(27:03):
United States alone. There's a few I think that are
mentioned from outside that I've got here, but probably, yeah, maybe,
And I think there's even an Irish rental car company
here somewhere. Um. I will not go into the list.
I will spare you the details on that. You can
look at up if you want. But the eighties, I
guess we're really kind of cutthroat for a lot of
rental car companies. And I guess one thing that happened
(27:26):
then at that time that was good was that some
of the bigger automotive companies decided to take an interest
in the rental car companies, which they hadn't really in
the past. And I know that Saunders was big with
I think with first initially forward, but then Chrysler jumped
on as being something that he he had. He offered
Chrysler products for a long time, and even back then
in the nineteen twenties, I think he had something like
(27:47):
a million dollars worth of Chrysler products at his disposal. Um,
you know, he was purchasing or you know, had already
owned or was you know, somehow leasing or what. I'm
not sure exactly how that all worked out, but um,
really to the point, they weren't quite as involved as
they were in the nineteen eighties and and so so
big companies like four in Chryst. So we're purchasing controlling
interest in a lot of these rental car chains, and
(28:10):
today a lot of these chains are still controlled by
some of the big manufacturers, of the big automotive manufacturers
all around the world. Really, oh yeah, because and think
about it makes sense from an auto manufacturing perspective. If
you have that controlling stake and an exclusivity agreement, then
you already have a built in market with a predictable
demand four products exactly you can sell. And you know
(28:33):
how this works when you go to uh, you know,
I don't know exactly which companies deal with which I
should have looked at up before I came in, I guess,
but which companies have which products? So let's let you
go to and just just gonna just uh, let's say
you go to Hurts and they have all four products. Um,
there's a reason for that. If you go to Avis
and they have all General Motors products. There's a reason
for that. And and and that's the thing is that
they can get these entire fleets of fleets of vehicles
(28:56):
out there, um and and again they can go to
the manufact sure and say like, well, it's time for
a new set of vehicles. Our round cars are getting
kind of worn out here. It's been about three years,
tough youse all that, you know, maintenance everything, but um
and you know, they've got a brand new vehicles then
at that point, and and of course the customers are
going to appreciate that because none of the cars are
less than two years old or you know whatever. They
can advertise, so it's it's good for everybody involved. And
(29:18):
they can sell them as used vehicles, so it all
makes sense and really win win. Yeah, and then there
was another big hit to the industry I guess around
nine eleven, two thousand one. Uh, difficult time. People weren't
quite traveling the way that they had in the past.
But there's been kind of a rebound recently, and I
think the industry has actually doing pretty well at this
point from what I've heard. And if we want to
(29:39):
go toward some more recent information that we see that
these companies are still relevant in the current age. There
there's some competitors coming out now right like the same
way that Uber is seen as a competitor to the
taxi industry. Companies from companies who either sharing or economy
(30:02):
like zip Car, could be seen as as potential rivals
that Avis Budget Group, which is their technical name. They're
given name as Budget System. It's Avis Budget Group Incorporated.
Which is a shame they dropped System, but I bet
a subsidiary still rocks it. Somewhere in two thousand thirteen,
(30:26):
they made a four hundred and nine one million dollar
offer to buy out zip Car. Was this four d
ande million really in twenty half of nearly half a
billion dollars to buy out zip car because they just
simply didn't want the competition, probably right, I guess they
just wanted to have, you know, to have the rest
(30:46):
of the market. Because what we're seeing is something that
you and I and No have talked about occasionally in
past and listeners some of you have written in about
it that auto manufacturers believe there is a trend amongst
younger generations to not want to own a car. This
I think is kind of a broad brush to paint with,
(31:11):
because there are very few things that happened to a
generation that affect all members of the generation except when
they were born. Anyhow, the industry pundits who were watching
this kind of stuff said that this signal to change
because originally Avis had been against this kind of thing. Yeah. Sure,
(31:33):
And I wonder if their their intention was to bring
it into foster it to to continue to run it
as is. You know, if they were going to just
simply rename it Avis, uh, you know whatever, Avias, zip
Car or whatever they would name it, um but that
same idea, or if they would just simply squash the
whole idea and make sure that it doesn't happen. Oh
(31:53):
and they did. I mean, I'm sorry, let me not
bury the lead here. They did buy zip Car, and
zip Cars ceo resigned hours after hours, really hours. The
zip Cars CEO at the time was a guy named
Scott Griffith. So Avis continues to grow, and rental car
companies or something like them are always going to be around,
(32:16):
I think, because you know, even if we look at
a future that people have talked about before where autonomous
cars become what you rent, even in that case, the
financial calculation is still going to be the same. We're
still gonna have people who want the convenience of a
car without the responsibility of owning a car. So they
answered my question then right away. Thank you. I appreciate
(32:39):
that because so AVIS is fostering that idea they're going
to They're gonna say, uh, this is this is the
model that we believe in that it will work. It's
gonna be maybe the new direction for our our company. Um,
you know, possibly. I think they're going to hang onto
the rental car part of it as well instead of
just the the sharing part of it. So they probably
have both. But is that the way that you know,
(33:00):
all the other uh rental company agencies are going to
go as well? I mean, are they gonna do the
same thing or something similar. They're gonna either purchase one
it's already out there, you know, another another sharing system,
or are they going to are they going to stick
with the kind of the old school method of rental
car companies? And I know we're talking about shorter rentals
for you know, like a zip car, uh, you know,
(33:20):
rental versus something that you know usually when you're go
into an AVIS or you know, a national or wherever.
You're renting a car for at least a day, if
not a week or even a month for vacations or
you know whatever. This is a This is a completely
different model for them to follow. I wonder if other, uh,
you know, companies are going to follow suit, If they're
going to decide that, you know, we need a part
of our business that can do these hourly rentals in
(33:41):
town like zip car can do. I would not be
at all surprise. Here's another question. Are we going to
find situations where someone rents a zip car to work
as an Uber driver? Oh? Really, that's surely it's not legal.
A very weird world. Yeah, that's straight. Wouldn't it be funny?
(34:04):
Like if you if you call for an Uber vehicle
and a zip car shows up, you'd almost be cautious
to get in. I think that's they can't be right.
You have to be. It had to be in the notes, right,
there would have to be I don't think. I don't
think you can do that. It has to come down
to an insurance and liability issue at that point. You know,
Uber has started a new thing where they'll they'll ask
you if you want to car pool with strangers and
(34:27):
the times. This must have been a recent time, a
recent change, because I don't use it all that often.
But when I used it last, it asked me how
many seats I wanted in the car, And I got
very excited for a second because I thought, Wait, if
I pick one, am I going to end up in
something really cool like a single seat sports car? Right?
Like like a yeah, like a two seater? Well, yeah,
(34:49):
I guess they'd be the driver, right, the driver is
also there. Sure, I don't think there's gonna trust me
with a car. But but no, it's just a car
pooling thing, so we do know the rental business has changed.
That's that's a range twist on this whole thing. I
had no idea they were asking you if you want
a car pool. I don't want to. I generally don't
want a car pool with strangers. I guess they're making
this crappier every day. What's good? That's I just can't
(35:10):
I'm getting hives thinking about it. Ben, Well, that you
might as well take the train. The train doesn't go
a place as I need the train to go. Sketchy,
I know, I just mean the situation where you just
never know is getting on and how damn close they're
gonna sit to you as well. That's the man is
Joey as you gets tell my co host is not
the biggest fan of Marta. You are getting my dander
(35:33):
up on this one. It's tough. Well, we better head
out of here then before before you get in an
apocalyptic rade. Well, thanks Jeff for the idea for the
you know, the first rental car and you were right.
You know that that there's the official first rental car
company here in the United States of the the US, and
the US story exists the rent car Yeah, exactly right.
(35:54):
But sorry for the twists and turns on the history
along the way with with Jacobs and Saunders and Avis
and National and all those it's just again, you go
to different sources for all this stuff. You're gonna have
slightly different dates, and sometimes those work and sometimes they
don't work together. And we're just trying to piece it
all together. But it's really a complicated history when you
when you look at who's buying what and who owns what,
(36:16):
and all these private equity firms that own big, big companies. Now,
sure that makes it even more difficult. So dig into
it if you like. To on your own and get
the history for individual companies. That's probably the best way
to do it. And thank you listeners, and thank you
Scott for humoring me through my Oregon Trail intro that
occurred halfway through the episode. I think I just wanted
(36:39):
to talk about the Oregon Trail, man, I guess, so.
I mean I might revisit that game. I guess, but
I don't know. It might still be just as stressful
as it always was. I think the soldiers just coloring.
I used to play it on hard mode and put
people I didn't like as my band and not and
like take them on this death march and not feed them. Oh,
wolves are attacking from the back. That's a Christina. We'll
(37:00):
do nothing about that. Yeah, I was, you know, I
did some good moves as well. It did make it
to California a few times. Anyway, Listeners, we hope you
enjoyed this episode, and thanks for the excellent question, Jeff.
If you would like to let us know some inside
tips about rental cars or your story of your best, worst,
the strangest rental we'd love to hear it. You can
(37:22):
also find us on Facebook and Twitter, where we are
car Stuff hs W. If you're about to rent a
car and want some tips, do check out our audio
podcast on that subject, which is available at our website
and let's see what's Oh, there's one more thing. If
you want to take a page from Jeff's book, an
electronic page and send us some mail, some electronic mail, Uh,
(37:46):
then we'd love to hear from you. You can write
to us directly at car stuff at how stuff work
dot com. For more on this and thousands of other topics,
how stuff works dot com. What a snare? What you think?
Send an email to podcast at how stup works dot com.
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