From Chauffeur Service to Global Business: The Origins of Car Rentals
Anyone needing a delivery van or lacking a suitable car for a planned trip can rent the necessary vehicle. Today, 129 years ago, the first car rental service began its operations. On January 15, 1896, a Parisian automobile club opened the world's first car rental service. The club saw this as an opportunity to promote the – then just ten years old – car. For three francs, interested parties could be driven around for an hour in a car. At the time, a chauffeur was included with the car provided by the club. Those wanting to use a car for an entire day paid 30 francs.
The idea quickly caught on!
As early as 1904, a bicycle shop in Minneapolis advertised that it also rented out cars. In 1912, Martin Sixt founded the company "Sixt Autofahrten und Selbstfahrer" in Munich, the oldest car rental service still operating today. The company started with a Deutz Landaulet de Luxe and two additional vehicles from Daimler-Motoren-Gesellschaft. The fleet reflected Sixt's positioning as a luxury car rental service, as drivers were still included with the rental cars during those days.
It's changed a few years later – in America!
In Omaha, Nebraska, the Saunders brothers worked as real estate agents. To visit the houses and properties they managed, the owners shared a Moline Dreadnaught. However, this car was out of service for weeks during the summer of 1915. Co-owner Joe Saunders wondered where he could rent a replacement car. A German-born car dealer agreed to the deal. Frank Arndt rented Joe Saunders a Ford Model T.
They agreed on a price of six cents per mile. Joe Saunders then wondered if the business could be scaled. In August 1916, Saunders purchased his first own Ford to rent out. The business took off immediately. Within a few weeks, Saunders expanded his fleet with three more vehicles. Initially, he rented out the cars on the street in front of the real estate office.
Car rental soon became known as the Saunders System!
In 1917, Joe Saunders, supported by his father Warwick, who worked in the iron ore business, rented an old stable in downtown Omaha. By then, he had 18 Model Ts available for customers. For ten cents per mile, customers could rent the cars. In 1919, the young company opened its first branch in Kansas City. Just a year later, another branch followed in Birmingham, Alabama. By 1929, "Saunders System Inc." operated 87 branches.
At the same time, Walter L. Jacobs founded another car rental company in Chicago. At just 22 years old, Jacobs owned a fleet of twelve Ford Model Ts in 1918. He rented them out for ten dollars per day. Initially called "Rent a Ford," Jacobs later renamed his company "Rent a Car." Within five years, his fleet grew to 565 cars, generating a million dollars in annual revenue.
To grow, you need money!
However, Jacobs sold his company to John D. Hertz in 1923, remaining as its head. Since 1915, Hertz had been operating a taxi fleet with his "Yellow Cab Company" in Chicago and also owned both a car and a commercial vehicle manufacturing business. The acquisition brought new capital into the company to fund expansion. The company first took the name "Yellow Drive-Ur-Self System" and shortly after changed it to "Hertz Drive-Ur-Self System."
Three years later, Hertz sold a majority stake in his business group to General Motors. By 1943, GM had fully acquired the automotive arm, renaming it GMC. A decade later, GM decided to exit the car rental business. John D. Hertz repurchased the rental business using his newly acquired "Omnibus Corporation of America" and took parts of the company public under the name "Hertz Corporation" in 1954.
Self-drive rental services also emerged in Germany!
Shortly before this, "Saunders System Inc." had merged into the newly founded Avis company in 1946. After the acquisition, Avis became the second-largest car rental company in the USA. However, Avis also required fresh capital for growth. Founder Warren Avis sold the company to financial investors for eight million dollars in 1954. By that time, car rental services were already well established in Germany.
As early as 1927, the "Selbstfahrer Union GmbH" was founded in Hamburg, offering 150 vehicles at ten locations. Customers were primarily Americans traveling from the seaports of Hamburg and Bremen to Berlin. By 1939, the company had grown to 700 vehicles across 30 branches in 25 cities. In 1974, the Selbstfahrer Union, by then owned by VW, rebranded as InterRent. In 1989, InterRent was merged into the French Europcar, which was also owned by VW at the time.
Picture credits: Archiv AutoNatives.de