Supply is low, demand is high—but that alone cannot explain the weird indignity of renting a vehicle.
What do you expect will happen when you walk into a rental-car office? Do you think you’ll turn over your credit card and your driver’s license, and walk out with the keys to at least generally the type of car you’ve reserved, having agreed to at least roughly the fee that you were quoted? Or do you picture something else?
“I’m expecting chaos,” says the comedian Caleb Hearon, who travels semi-frequently for work. “The whole time I’ve been doing it, it has been brutal and weird.” Now, somehow, the situation has gotten even worse. Horror stories abound: of cars renting for $300 a day even in medium-size cities; of lines out the door for cars that are not available, not present, or that might not even exist. Rental-car companies sold off huge chunks of their fleets and laid off thousands of employees during the early months of COVID-19, when demand was extremely low and they were experiencing big financial losses. More than a year later, they’re still having trouble replacing cars, because of supply-chain problems in the auto-manufacturing industry—most notably a prolonged semiconductor shortage. Demand is high, supply is low, you know the rest!
“The pandemic was what knocked Hertz over the cliff,” the finance blogger Wolf Richter wrote when the company went bankrupt in May 2020. “But it had been teetering near the cliff for years, burdened by its enormous debts and lousy operations.” The same could be said of our ability to tolerate the entire industry. If rental cars are now in high demand, it’s because of what they are: a method of escape. Since the summer—or since vaccines—we’ve been especially inclined to drive away from all our problems. Sure, we’ll take that van that smells like cigarettes; it has four wheels. But still the chaos thwarts us. Hearon’s dream scenario for renting a car would be to find at least one employee present who is not on an extremely long phone call, he told me. “If there’s someone sitting at the desk and they look me in the eyes, I’m like, Oh my God, this might not be the worst thing that ever happened to me.” That does sound dreamy.
Let me address the rumor I waited in an airport rental car line 4 hours last night only to be given a 12-person van.
It is true. If any convicts or Boy Scout troops are headed to College Station your boy has room.
The present situation is “the most challenging in the history of car rental,” says Chris Brown, the digital editor of the industry trade publication Auto Rental News. “Last year … it was a disaster.” Nobody could have planned for such a catastrophic revenue loss, he told me, and while the airline industry received a government bailout, the rental-car industry did not. “Hertz had 3,000 cars burned to the ground because someone lit a match, and they just burned in a field,” he added. (Something like this did happen in Florida, though only around 1,000 of the 4,500 cars destroyed in the fire belonged to Hertz, and investigators blamed the episode on a hot exhaust pipe and dry grass.) Given the context, some negative customer experiences were to be expected, Brown argued. “But I think it’s really impressive how car-rental [companies have] been able to pull themselves out of this very difficult time managing as well as they are.”
Well, I’m not trying to be unfair to any companies, but many car-rental businesses did receive funds from the Paycheck Protection Program. And many of their negative customer experiences have nothing to do with a car shortage or a pandemic. Why is that car-rental employee typing for so long? We’ll never know. Why are the printers so old and loud and broken? Who could say! Will you ever get a straight answer as to how much insurance to buy, or whether to prepay for gas, or why it’s forbidden for you to drive this rental car out of the state of Florida? What does the pandemic have to do with Avis allegedly repossessing a rental car from someone’s driveway in the middle of the night in Teaneck, New Jersey, and then allegedly claiming to know absolutely nothing about it, in one of the oddest stories I have ever read? And what does the pandemic have to do with the stream of complaints about rental-car companies on the Better Business Bureau website, a surprising number of which come from people who insist that they do not smoke yet they have been charged as much as $450 for allegedly smoking in a car?
I reached out with questions of this kind to the three largest rental-car companies, which control the large majority of the rental-car business in the United States. Enterprise Holdings did not respond. Avis Budget declined to comment about either the state of the industry or the alleged incident in Teaneck. A Hertz spokesperson said, in part, “Hertz is working closely with our automotive partners to add new vehicles to our fleet as quickly as possible amid the microchip shortage that continues to impact the car rental industry. We’re also purchasing low-mileage, pre-owned vehicles, and moving vehicles to the areas with highest demand.”
Read: An ode to driving in America
The financial structure of these companies is as inscrutable as a contract printed on a dot-matrix printer and signed in a dim underground parking garage. Some of them have gone bankrupt; at least one has done so multiple times. Take Hertz for instance: Private-equity firms acquired the company from Ford in 2005, then made a profit of $1 billion with an IPO while the company itself remained deeply in debt. The company is also on its sixth CEO since 2014 and has been deemed a “Frankenstein of financial engineering” by Axios. Most of the cars that Hertz rents out are owned by “special-purpose” subsidiaries of Hertz, from which Hertz then leases them. When Hertz was sliding into bankruptcy in spring 2020, it was because the company had missed lease payments—to put it crudely—to itself. I can barely understand this, yet I will walk into a rental-car office and suffer for it.
Confusion at the rental-car desk is timeless. It is also constantly evolving. Travel websites now offer the baffling option of booking a car with a “surprise agency” at the airport—as if the reveal will be a delight. Tolls in many places are automatic, but some places still require renting a physical toll pass, which can come with random-seeming fees. (In California, Hertz and a partner company settled a $3.65 million lawsuit alleging that the company had “fraudulently and deceptively induced” customers who drove over the Golden Gate Bridge even one time to purchase an optional PlatePass that cost $24.75 and did not entitle them to any discount on the bridge’s actual toll, which is $9.05 for a two-axle car.)
The rules are always shifting, too. You can’t pay with a debit card, for example, except that in some cases you can, including, sometimes, when you’re at the airport and can prove that you have a return airline ticket in the coming days. “I can tell you exactly why the debit card is a very problematic situation for car-rental companies,” Brown said. “The percentage of renters that don’t have a credit card and use debit cards, and try to steal the car—or basically run with the car until they get caught with it, or just leave the car, you know, wherever, [to] never be heard from again—is substantially higher with a debit card.” Incidentally, Hertz has been the subject of complaints in the recent past from customers who say they were arrested and detained for stealing rental cars they had clearly not stolen. (Hertz has refuted these stories, and wrote to me in an email, “Situations where vehicles are reported to the authorities are very rare and happen only after exhaustive attempts to reach the customer.”)
After two years of urgent daily news about a global pandemic and the economy and the supply chain, maybe corporate absurdity is just that much harder to stomach. People who are renting cars are subject to forces beyond their control and largely beyond their sight. Once they get in line, they typically have few or no other options than to leave with some kind of car. Brian Kelly, the famous and beloved “Points Guy” who doles out advice on finding deals of all kinds, agrees with me that this situation is—frankly—nuts. “Since the pandemic, it’s just gotten dramatically worse,” he told me. “I mean, it never used to be this stressful to rent a car.”
Read: Why airlines can get away with bad customer service
Kelly had scant actionable advice. Check to make sure that your rental doesn’t have a daily mileage limit, he said. Don’t try to return the car at a different location from the one where you rented it. Enroll in a rewards program. “There is a pecking order in terms of who gets a car and who doesn’t,” he said. “Loyal members get cars over some random person who’s booked through a weird internet travel agency.” Well, maybe, but I don’t love the idea of expressing “loyalty” to a company in exchange for the services my money was supposed to buy. And anecdotally, being a Hertz Gold member didn’t seem to help the Brooklyn lawyer who recently posted a viral thread accusing Hertz of “fraudulent business practice,” having directed her on a wild-goose chase to four different rental locations in search of just one car for which she could pay many hundreds of dollars in order to get home for Thanksgiving. In any case, Hertz doesn’t need my loyalty. Hertz is thriving in this situation, to the point where Senator Elizabeth Warren wrote a letter to its interim CEO asking—I’m paraphrasing, but barely—How is it that you’re thriving? And don’t you think it’s sort of gauche to be thriving right in front of your miserable customers? What she actually said was, “Since exiting bankruptcy, the company has reaped record profits while dramatically increasing rental car prices for consumers.” (“We have received the Senator’s letter and plan to respond as requested,” a Hertz spokesperson told me in an email.)
The drama of the rental-car experience comes from the drama of the world around it. The pandemic has laid bare the senselessness of many of the institutions that rule, and ruin, our lives. Never is it more apparent than when we’re on the verge of going somewhere else—when we can feel a glimmer of hope. We’ve come this far, we think. We are inside a rental-car office; we can see a road through the window. Escape seems so close. But it keeps getting snatched away.