A Brief History of the Car Rental Industry

The Early Days of Car Rental

The earliest days of the car rental industry are shrouded in some mystery. Unsurprisingly, it seems to have started in the United States.

However, the general consensus of opinion seems to be that the first commercial car rental was done by a Joe Saunders from Nebraska.

model t ford for rent
Model T Ford – the first rental car?

Joe, apparently, started out by renting out his Model T Ford at 10 cents per mile – using a mileage meter to count the miles travelled. A nice little story is that the first rental was to a travelling salesman who rented Joe’s Model T in order to impress his local date! We don’t know if that’s true but it has a nice ring to it!

Joe went from strength to strength. By 1925 he had car rental agencies in 21 states! However, just as everything was going nicely along cam the Depression and Joe was forced into bankruptcy.

Concurrently with Joe Saunders’ successful years a Walter Jacobs was also developing a car rental business. He survived and sold his business to the owner of Yellow Cab – a John Hertz. In due course Hertz sold out to the mighty General Motors. With their massive investment in the business Hertz became the leader and is still the largest car rental company in the world today.

After World War II the car rental industry really came into it’s own. Because of air travel businessmen started flying to their appointments – what did they need when they arrived at their destination but a rental car!

Airport Car Rental – A New Opportunity

Around this time an ex army pilot named Warren Avis realised the potential and concentrated on providing car rental from airports. By concentrating on airport rentals for business travel, Avis grew to be the second largest car rental company in the world – second only to Hertz and today have gobbled up competitors such as Budget.

In the 70s and 80s the big car rental companies started into the used car sales business – by selling off their older cars direct to the public. Some major car manufacturing companies tried takeovers in order to ensure that the car rental companies bought their huge fleets from them!

After 9/11 car rental companies were badly affected as a result in the decline in air travel. However, recent years has shown an upsurge in the industry and the Internet has spawned a plethora of car rental brokers. These brokers, with their lower overheads and huge buying power, are often able to undercut the very car rental companies from whom they obtain their rentals!

A Personal Car Rental Story

A little personal anecdote. Back in the mid fifties I was living in Montreal. Every Friday evening I would fly to Ottawa to visit my girlfriend (in those days Ottawa airport had a grass runway!

I had a standing reservation for a rental car every week – supplied by Tilden, Canada’s answer to Avis. One Friday I arrived at Ottawa and went straight to the Tilden office (then, it was a wooden “shed”!). No car and no staff!

I called the emergency number provided and, in due course, a gentleman in a white Tuxedo arrived with my car. That man was Walter Tilden, the President! In the absence of any staff he had come personally, from a party, to bring me my car. Needless to say I was very impressed with the service – but not nearly as impressed as I was twenty years later when I found myself again in Montreal on business. I contacted Walter Tilden and was amazed to find he remembered the incident! (Maybe I was the cause of him missing a really good party!). Tilden was subsequently taken over by National Car Rental.

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