Quietly, and almost in spite of itself, Enterprise Rent-A-Car has become the nation’s biggest car rental company.
Enterprise, which built its business by focusing on local markets, has surpassed Hertz Corp. in terms of the size of its U.S. fleet. And Enterprise is tailgating Hertz in total U.S. revenue.
Andy Taylor, Enterprise’s low-key president, seems almost embarrassed by the company’s rise to the top.
“Dad started with 17 cars. Being No. 1 is something we really didn’t set out to do,” he said. “We never imagined we’d be a tenth this size.”
Hertz says it has a firm hold on the top spot internationally.
“We are still the largest car rental company in the world, with a fleet of 450,000 cars,” said Joe Russo a spokesman for Hertz. “We don’t take anything away from Enterprise. They’re doing a super job.”
Enterprise now has 2,000 locations with 232,000 vehicles in the United States; it has 62 locations in Canada and the United Kingdom. Hertz has about 190,000 vehicles at 1,175 U.S. locations, although Russo said the number of vehicles varies as the travel business rises or falls.
Final revenue totals aren’t yet available for 1994, but Hertz projects earnings of $2.1 billion for its U.S. business. Enterprise expects domestic revenue to reach $2 billion for the year.
Who’s No. 1 “is in question for the first time in industry history,” said John LeSage, editor of Auto Rental News magazine. “Hertz has been No. 1 since the auto rental industry started in 1918.”
Taylor said his company’s rapid growth is expected to continue. Russo said Hertz sales were up 21 percent last year and more of the same is expected in 1995.
While Hertz, Avis, Alamo and most other nationally known companies butt heads over the business traveler market, Enterprise has traveled a different road. It has concentrated on the local market, a field it virtually owns.
“Our most common customer is somebody in need of a car because of an accident or repair to their vehicle,” Taylor said. Other primary customers use the vehicles for short business and leisure trips.
LeSage said the local market began to take off in the 1970s, when courts ruled insurance companies should provide loaner cars for clients whose autos were incapacitated.
In the 1980s, car dealerships and body and repair shops began implementing customer satisfaction plans that included free loaner cars for people whose vehicles were in the shop. Many of those firms have turned to Enterprise, which owns just under half the nation’s fleet of cars designed for the local rental market, LeSage said.
Competitive pricing also has helped Enterprise. The company’s rates are 30 percent lower than most airport rental car companies, Taylor said. And Enterprise throws in other extras, like picking up customers at no additional charge.
Taylor, 47, recalled the day his father, Jack C. Taylor, announced he was giving up his job as a Cadillac salesman to start his own leasing business.
“It was 1957 and I was 10 years old. He came home and told us not to wear out our clothes,” Taylor said. “He said he was taking a 50 percent pay cut to start a new company.”
The elder Taylor, now 72, remains active in the company.
Enterprise grew steadily over the years, but the business became a major player in the car rental industry in the past decade. In the last four years, the Enterprise fleet has more than doubled. Sales have tripled since 1989.
“There hasn’t been any great strategic plan - the business has just sort of evolved,” Taylor said.
Taylor said the company still adheres to a philosophy his father first coined in 1957.
“No. 1, if you take good care of customers, they’ll come back. No. 2, make sure you share your success, financially and through promotion opportunities, with employees. And No. 3, if you get the first two right, you’ll make some money,” he said.
As a private company, Enterprise gets less attention than competitors listed on the stock exchanges.
“The local car rental market is a lot more significant than the public would assume,” LeSage said. “The real growth in the business is going to be in the local market.”
Part of the reason the market continues to expand is the growing reality of the two-income family, Taylor said.
“Americans just really need their cars. When one of those cars quits or needs repairs, we come into the equation,” he said.