Every major car rental brand is owned by these three companies: here’s how that happened – Jalopnik

You step off the plane, drag your luggage through the terminal and are greeted by a series of brightly colored logos. You have the green of National, the yellow of Hertz, the red of Avis and a bull’s-eye from budget enthusiasts such as Thrifty, Alamo or Dollar. On the surface it feels like the competition is overwhelming, but like the cereal aisle at your grocery store, all those options on the shelves lead to the same few big brands. But let’s be real for a moment: that perception of choice is a composite illusion.

Most of the U.S. rental car market is controlled by just three companies: Enterprise Mobility, Hertz Global Holdings and Avis Budget Group. However, it wasn’t always set up that way. In the past, automakers owned some of these companies to dump their inventories. Ford bought Hertz in 1987 to help move units, so the lineage of those Hertz-themed Fords went deeper than you might have thought. But after decades of mergers and acquisitions, the market has become what it is today.

It may seem a bit crude, but the term starts to make sense when you realize that they dominate airport terminals, control supply and demand, and can easily ruin a family vacation — not to mention hidden fees and other shady practices, like Hertz’s AI-powered damage scanner. And while it may feel like you’re shopping around for the best deal between Alamo and Enterprise, the money is all flowing into the same bank account.

If this were a game of Monopoly, Enterprise Mobility would be the guy who bought all the properties while everyone else argued over who would go to Boardwalk first. As the largest company in terms of market share and fleet size, it is the undisputed heavyweight champion in the rental space. Oh, and unlike its publicly traded counterparts that are accountable to shareholders, Enterprise is privately owned by a single family.

For business graduates, the Enterprise Mobility Portfolio is a lesson in segmentation. National Car Rental is at the top and ready as a premier brand for the business traveler who is allergic to lines and willing to pay for speed. Then you have the flagship Enterprise Rent-A-Car (ERAC), which dominates the neighborhood market and is the place to go when your daily driver is in the shop. With estimates of the National Highway Traffic Safety Administration (NHTSA) suggests that there are 17,000 accidents every day and that there is a physical Enterprise right around the corner: that’s a pretty big revenue stream. Finally, there’s Alamo, the junior varsity brand that targets a budget customer who just wants to go to Disney World without taking out a second mortgage.

Okay, so Enterprise has a few brands; what’s so special about that? The genius here isn’t just the branding or the placement; it’s the waterfall. A brand new vehicle joins National’s fleet for the high-paying lawsuits. Once it has traveled a few miles, it will be transferred to Enterprise for general use. When it gets a little tired, it ends up at Alamo for the budget hunters. It’s a brilliant way to squeeze every penny of revenue out of a Chevy Malibu before it’s sent to the big auction block.

Hertz is the icon of the group – the one with the most turbulent history and the coolest cars. It’s currently in the middle of the three in terms of market share, but otherwise it hasn’t had a smooth ride. The company filed for bankruptcy in 2020 as the pandemic economy did its thing, but found a way through it. Hertz also operates with a tiered structure to compete with Enterprise, using Dollar Rent A Car for the middle-class family market and Thrifty for the bargain hunters.

For gearheads, Hertz has always been the interesting one, known for historically driving high-end rentals. Hertz even had a “Rent-A-Racer” program at one point, but the company’s current attitude is a far cry from the glory days of limited-edition Mustangs. More recently, Hertz attempted to bring back the Hertz Edition Mustang to match their new EV strategy, rolling out a limited edition Mach-E in the classic Hertz livery and pivoting hard into the future with a huge bet on EVs. Unfortunately, the execution was flawed and even after selling tens of thousands of EVs, the company suffered a $2.9 billion loss from the program.

Completing the triumvirate is Avis Budget Group, with a market strategy that’s more of a one-two punch: Avis attacks the corporate types with the slogan “We Try Harder,” while Budget exists to make casual travelers feel like they’re getting a deal on the exact same cars.

But apparently that wasn’t enough market saturation. To make sure it didn’t miss out on the absolute bottom dollar, Avis bought Payless Car Rental in 2013 to fight in the mud with the bare discount counters. Avis has even fully hedged against the concept of car ownership by purchasing Zipcar, just in case the urban market decides they prefer hourly billing to actually owning anything. With $1,000 a month car payments the expectation, the company may be on to something here.

The next time you drag a carry-on bag to the airport rental center and compare prices on your phone, be aware that the game has been tampered with. It’s mostly an illusion of choice, designed to make us feel like smart consumers rather than a captive audience. Whether you think you’ve struck a deal with a discount brand or released a premium name, that money is almost certainly flowing to the same three overlords. You’re not really looking for a better product; you just choose which color line to follow while you wait for a Nissan Altima that smells faintly of regret. All thanks to the great American pastime, capitalism.