Today, car leasing is the leading asset segment of the leasing market, accounting for over 50% of the total leasing portfolio in most countries (in Europe, the car segment occupies 53% in 2018).
The history unites the dreams of three innovators: Henry Ford, who dreams of making the car accessible to everyone, John Hertz, who wants to make transportation accessible to everyone and the bond between the two – Walter Jacobs, who first used leasing as a way to achieve these two dreams. Their names will make leasing history.
Here’s how it all began:
The First Mass Taxi Service
In 1907, the young car dealerSee Supplier... More John Hertz noticed a surplus of traded-in cars at the car dealership where he worked. Using this, Hertz created a small taxi company in Chicago, buying 7 used cars. His idea is to create a taxi service which is “accessible to the common person”. In 1915, Hertz founded the Yellow Cab Company, with the notorious yellow taxis and affordable fares. The company franchise rapidly spread throughout the United States. The enterprising Hertz grеw his business rapidly. In 1917 he founded the Chicago Motor Coach Company – a bus transportation operator. In 1920 he founded Yellow Cab Manufacturing Company – a company for the production of taxi cars. In 1923 he founded the Yellow Coach Manufacturing Company, a bus, and car manufacturing company.
The First Car Leasing Deal
As John Hertz was developing his taxi-bus empire, in 1918 a 22-year-old Walter L. Jacobs owned a small Ford dealership.
Sales in 2018 were not particularly strong, and Jacobs remembered how he and his father used to rent horses and wagons. Walter decided to apply the same model to cars. With a loan of $2400, he bought his first 12 Ford Model T cars. Walter Jacobs named his company Rent-a-CarRent-a-car (or car rental) is the... More Inc. (you now know who invented this popular phrase) and started his rental car business. The new service was an immediate success and Jacobs increased his fleet to 20 cars in just eight months. In just 5 years, the company’s fleet grew to 600 cars, generating an annual revenue of USD 1 million.
Hertz and Jacobs Join Forces in Car Leasing
In 1923, John Hertz noticed the innovative Walter Jacobs company, which was available for sale. Hertz immediately bought the company, thus combining his business ingenuity with Jacobs. The company was renamed to Herz Drive-Ur-Self Corporation. Within two years of the company’s acquisition, it expanded its car rental network throughout the US. In 1926, Hertz launched its “Rail-Drive” program, which allowed customers to rent a car from Hertz as soon as they got off the train.
In 1926, Hertz sold most of its companies, including Hertz Drive-Ur-Self, to General Motors and took a position on the GM Board of Directors. Jacobs remained the company’s President and Chief Operating Officer throughout the transformation. It is under the GM ownership that Jacobs made many of the innovations which are still in use today, and for which Herz Corporation is known for.
In 1926 the company launched its first rental car card (the forbearer of today’s credit cards), in 1932 the first branch of the company was opened at the Chicago airport with the “Fly-Drive” program, and in 1933 the first One-way Travel Plan was launched for rented cars. In 1939, the first overseas branch was opened in Canada. In 1950, Hertz entered Europe, opening its first office in France. By 1959, renting a car from the airport had already become a “habit”, and Herz Rent-a-CarRent-a-car (or car rental) is the... More could now be found at airports in the US, Canada, France, and a further 1000 locations:
In 1953, Jacobs and Hertz organized the Omnibus corporation, which bought the company from General Motors and floated the company the following year on the New York Stock Exchange. The company was renamed The Herz Corporation.
Hertz worked for the company until 1960, and Jacobs remained President of the company until 1968.
Today, over 100 years after its founding, Hertz has grown into a franchising giant and is represented on all continents, continuing to offer its services: Rent-a-CarRent-a-car (or car rental) is the... More, operating leasing"Operating leasing" or "Operational leasing" or... More and fleet management. Its automotive fleet already exceeds 600,000 cars and has over 10,000 service locations in 145 countries.
Hertz in Bulgaria
In Bulgaria Hertz is represented by the Greek company Autohelas since 1996, which in 2003 bought the local car dealerSee Supplier... More Autotechnica OOD in Sofia. The rent-a-car service is already very popular, but still, Hertz remains one of the leading companies in the segment.
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