Opinion: The Hertz EV Gambit Isn’t Paying Off
Hertz has reportedly fallen short of its promise to buy 100,000 electric vehicles from Tesla last year. Though, taking a look at the role EVs are playing in the rental industry right now, the company might actually have made the correct decision.
Hertz to Begin Renting Out 900-HP Shelby Mustang GT500-H
In 1966, Shelby American joined forces with Hertz for its Rent-a-Racer program. Legend has it that the entire thing started as a way for Carroll Shelby to sell 1,001 modified Ford Mustangs, effectively conning the rental agency into paying for the privileges of advertising his products. But the resulting Shelby GT350H has become a bit of a legend, with the surviving examples consistently going for six figures at auction.
In actuality, Hertz was already offering high-performance vehicles years before Shelby got involved and the pair had previously worked together to offer the Cobra in 1962. Their marriage solidified the company’s efforts to occasionally provide customers with the opportunity to drive something truly glorious to drive. While the Mustang (along with the Corvette) remained a staple for North America, Shelby models wouldn’t return until 2006 delivered a second incarnation of the GT350H, to be followed by the 2016 GT-H. Hertz and Shelby American have confirmed a new partnership — one that has resulted in the 900+ horsepower Mustang Shelby GT500-H.
Hertz Ordered to Release Records on Alleged Rental-Car Thefts
Hertz customers have issued complaints that the company falsely accused them of stealing rental cars. Numerous renters have made claims that they were stopped by police to be informed that the vehicle they had paid to borrow was reported stolen. Complaints became so prevalent that CBS News launched an investigative report last November to uncover whether individuals were simply lying about their innocence to avoid prosecution or if Hertz was habitually screwing things up.
By December, 191 claims had been filed in federal bankruptcy court on behalf of the people who said they were falsely arrested. But it took another two months for a Delaware bankruptcy court judge to issue a ruling that will require Hertz to make the number of renters it accuses of stealing its cars every year publicly available.
The Struggle Continues for Hertz, Now Seeking a Bankruptcy Loan
Colossal rental car provider Hertz is on the hunt for life-sustaining cash, but raising it itself now seems out of the question. Hertz Global Holdings, which filed for bankruptcy in May, recently moved ahead with a plan to raise a cool half-billion through a stock sale, only for the Securities and Exchange Commission to step in and say “hey, whoa, no more of that.”
Left with no other option, Hertz is now seeking a bankruptcy loan.
They Wanted Fewer Fleet Sales, and They Got It
Replay the last couple of years and you’ll hear a chorus of automaker pledging their allegiance to sustainable business practices. Streamlined operations, pared-down lineups and build configurations, reduced incentives, and a newfound preference for retail sales over the volume-at-all-costs approach. No single company touted this more than Nissan, though it was hardly alone.
The coronavirus pandemic, in some cases, sped up the need to find firmer financial footing, even if incentivization became the name of the game in order to move any car or truck. One thing’s for sure: fleets, especially rental fleets, sure weren’t interested.
Porsche Expands Subscription Service In North America
Porsche’s app-based subscription service is creeping into to four new cities in the United States and Canada. While technically still a pilot program designed to probe the market’s willingness, the expansion would indicate it’s one the automaker has some level of faith in.
We, however, are not among the true believers. Despite the added convenience of incorporating maintenance and insurance into one’s regular car payment, subscription services have not proven themselves to be an affordable way to own a car. In fact, they’re typically the most expensive way to procure a ride. But that doesn’t guarantee they won’t eventually catch on or make nameplates like Porsche oodles of cash, especially as the brand intends on making the service more costly.
Day-rate Disruptors: Rental Agencies Sure Seem Excited About Mobility
Car rentals have evolved rather dramatically in the new millennium. While you can still reserve over the phone before walking into an office to pick up the manager’s special for the agreed upon timeframe, alternatives are many. ZipCar transformed how some people get around an urban environment by allowing customers access to an array of automobiles at hourly rates. Seeing its potential, Avis acquired the company in 2013, expanding its function to include a less stringent return policy via ZipCar Flex.
Meanwhile, Enterprise has its own short-term rental services. Recently, the company has been on a kick to purchase as many mobility firms as it can. Hertz, which has been a little slower to dive into mobility culture, does offer alternatives to traditional rentals in specific markets. It also announced a new strategic partnership with the tech firm Aptiv last July to start testing autonomous fleets this fall.
This, of course, is all taking place in an era where carmakers are launching fleets of their own while attempting to rebrand themselves as data and mobility companies. But surely these rental agencies are just hedging their bets and trying to adopt new tech to better serve their customers. They’re not about to adopt the same tired rhetoric, are they?
Porsche to Strangers: Borrow Our Cars
Having already introduced a subscription service for its vehicles, Porsche decided to continue experimenting with alternatives to traditional car ownership. The luxury brand plans to launch two pilot programs on both U.S. coasts (condolences to America’s Heartland) aimed at encouraging drivers to get behind the wheel of a Porsche for brief periods of time.
The first, overseen by Porsche Cars North America, will test exclusively within the Atlanta area, near Porsche’s North American headquarters. Called Porsche Drive, the pilot program launched a few days ago and offers hourly to weekly rentals of new Porsche cars and SUVs. Meanwhile, a second joint venture with peer-to-peer car rental company Turo will service San Francisco and Los Angeles starting next month. That endeavor focuses on the sharing of already purchased (new and vintage) Porsche vehicles by owners inclined to share them.
Don't Be Gentle, It's a Rental: Nissan Boosts U.S. Sales Numbers by Flooding America's Fleets
What was the last car you rented? If numbers reported by The Wall Street Journal are accurate (and we have no reason to believe they are not), chances are it was probably a Nissan.
Why’s that? Well, flying in the face of everything that’s ever been taught in the popular How Not to Scupper Resale Values 101 class, Nissan has been pumping the rental market full of Rogues and Altimas, to the tune of nearly 300,000 units in 2017. That’s the most of any automaker and 10 percent more than the traditional offender in this field: General Motors.
Are Car Subscription Services Going to Become the New Normal?
Automakers are throwing everything they currently have at the wall to see what sticks. The concept of “mobility” is now so broad that it encompasses automation, electrification, vehicle connectivity, alternative modes of transportation, driving aids, ride-sharing, ride-hailing, and even subscription services — and plenty of companies are giving them all a shot.
Last week, we talked about Volvo’s new car subscription service. Most of us had difficulties rationalizing the price based on how the product is being offered. A lot of companies are testing those waters right now, especially luxury brands. Lincoln recently launched a subscription initiative that is extremely similar to Cadillac’s, and Porsche has been buzzing about its own “Passport” service. However, mainstream brands like Ford and Hyundai are also trying their hand — albeit very differently.
Cadillac Will Let Fickle People Borrow From Its Fleet for $1,500 a Month
If you’ve ever found yourself buying someone a $10,000 handbag or worrying that not enough of your clothing is made from cashmere or silk, you’ll want to know that Cadillac will let you “subscribe” to its cars for a tidy monthly sum of $1,500.
“Book” by Cadillac is a $500 app that lets you select the most premium offerings from the brand and have it delivered to your door. However, you’re not leasing or purchasing a vehicle from General Motors’ flagship brand — you’re just borrowing one. Cadillac is touting this as some sort of transformative, fancy-free way to own a car. Still, it doesn’t actually alleviate most of the problems associated with car ownership, especially not in the urban markets it plans to test the service in.
Ask Jack: When To Rent?
It’s the triumphant return of Ask Jack, the question-and-answer series that has proven to be significantly less popular than Ask Bark. Today’s question comes from several commenters on the Malibu LTZ Review, and it can be summed up like this:
If you’re only driving 500 miles or so during the weekend, why would you rent a car instead of taking your Accord/911/Boxster/Neon/Tahoe/Fiesta/motorcycles/bicycles/Uber/Southwest/Car2G?
I’m glad you asked. Really, I am. ‘Cause otherwise, today’s column would have been a long snd slightly sorrowful re-telling of a time I accidentally let my S5 roll downhill into a concrete parking block because I had both of my hands between some young mother’s legs in the passenger seat and my foot slipped off the brake when I leaned all the way over towards her.
Hammer Time: Financial Hypnosis On A Per Mile Basis
The three year lease.
It entrances and traps the most spellbound car aficionados into a monthly payment that keeps them at the altar of the car payment.
Is that a bad thing? Well, depends on the way you want to look at it. What can’t be argued is that both sides get what they want, and after three years, that customer can choose to stay with the manufacturer or go somewhere else. To me at least, that seems like a fair bargain.
But what if the automaker could offer a better deal? For both parties?