You know, when you think about Hertz, you probably just picture grabbing a car for a road trip or when your own car’s in the shop. Simple, right? Well, I dug into it a bit, and man, it’s not just about handing over keys for cash. It’s a whole different ball game they’re playing, a much bigger, more complicated one.
It’s like they’re not just doing one thing, but a bunch of things all at once, all connected in ways you wouldn’t expect. It’s not just the rental counter.
- There’s the whole airport operation, which is a beast in itself. Those prime spots cost a fortune, and they know they’ve got you when you land.
- Then you’ve got their corporate deals. Businesses get different rates, different terms. That’s a whole separate stream.
- And get this, a massive part of their game is buying and selling cars. Tons of them. They’re like a massive used car dealership on the side, almost.
- Plus, all those extras they push at the counter – the insurance, the GPS, the satellite radio? Cha-ching. That’s where a lot of the gravy is.
How I Got Down This Rabbit Hole
So, why do I even know or care about any of this? Well, it all started with my cousin, Tony. Good guy, but sometimes he jumps into things. He decided he was going to start his own little local car rental business a few years back. He figured, “People need cars, I’ve got a few, how hard can it be?” Oh boy.
He was really trying, you know? Got himself a small fleet, decent cars, kept them clean. He was trying to offer fair prices, none of those crazy hidden fees. But he was just getting hammered. He couldn’t make the numbers work. He’d call me up, super frustrated, saying, “I don’t get it! How are these big companies like Hertz even staying afloat with their massive offices and hundreds of staff if I can’t make it work with just three cars and a prayer?”
That got me curious. I’m not a business whiz or anything, but I like figuring stuff out. So, I started just, well, looking around. Reading articles here and there – nothing too academic, just whatever I could find. I even chatted with a fella I know whose brother used to work in fleet management for one of the big rental agencies. Not Hertz specifically, but in that world.
What I Sort of Pieced Together
And what I started to realize is that the daily rental rate you see advertised? That’s just the invitation to the party. The real money, or at least a huge chunk of it, is made in other ways. It’s a complex beast.
First off, these guys are masters at playing the car market. They buy cars in enormous volumes, so they get huge discounts from manufacturers. Then they run these cars for maybe a year, sometimes two, and then they sell them off. And because they manage their fleets so carefully, and sell them before they get too old or have too many miles, they often sell them for a pretty good price. Sometimes, they barely lose money on the car itself, or even make a tiny bit! Try doing that as a small fry like my cousin.
Then there’s the whole game of utilization. They’ve got sophisticated systems to figure out where the demand is, how to move cars between locations, and how to price them dynamically. If there’s a big convention in town, boom, prices go up. Slow Tuesday in February? Maybe you get a deal. It’s all about keeping those cars on the road, making money, not sitting in a lot.
And the upsells! That’s where they really get you. That collision damage waiver they scare you into buying? Pure profit, most of the time, especially if your own insurance or credit card already covers you. The prepaid fuel, the toll passes, the upgrades to a bigger car… it all adds up, massively. My cousin Tony? He felt bad trying to upsell people on stuff they didn’t need.
So yeah, poor Tony. He eventually had to pack it in. He just couldn’t compete with that kind of machinery. It wasn’t just about renting cars; it was about financial maneuvering, massive-scale logistics, and knowing how to squeeze every last dollar out of every transaction. When you look at Hertz, it’s not just a simple shop. It’s this giant, sprawling system. And when it’s all clicking, it’s incredibly effective at making money from a lot of different angles, not just the one you see at the front desk.
