[dramatic music]
- [Narrator] Today, nearly 600 million people
around the globe rent a car every year.
- We can go to any city virtually all over the world
and walk out the airport, and we can rent a car.
- A rental car is really like having a key to the city.
- [Narrator] And the leading rental companies
have become household names.
- Green is Enterprise, red's gonna be Avis,
yellow's gonna be Hertz, blue's gonna be Dollar.
There's something we assume will be there
when we land, like our luggage.
- [Narrator] But only a century ago,
the entire industry didn't exist.
- At this point in time,
less than four out of every 50 people actually own a car.
[tense music]
- [Narrator] Until a struggling car salesman...
- How can I help you?
- [Narrator] Meets a taxi cab tycoon.
- John Hertz.
- [Narrator] Who join forces
to change the rules of the road.
- People were rolling in the door to drive a car
for the first time or to take short trips.
- By making it easy, by making it accessible,
they started a rental car revolution.
Hertz was ready to grow and take across the world.
- [Narrator] But when a World War II veteran sees a hole
in the market... - Here are the keys, Mr. Avis.
- [Narrator] A cutthroat rivalry revs up.
- Avis has this genius idea
that Hertz hasn't yet figured out.
- Hertz was a company built during the automotive age,
but Avis was about catering to the jet age.
- So much of Hertz's market share was being eroded
by this upstart that quickly became number two.
- Find out every airport Avis is in and every one he isn't.
- This was unheard of.
- They mention Hertz, pretend you didn't hear it.
Just keep talking.
- Now he has competition
that is somehow beating him at the game he created.
- [Narrator] In the end, only one can come out on top.
- The competition, the rivalry, the innovations
that came out of these two companies
led to this now $100 billion industry
that we have for car rentals.
[engine rumbles]
[intense pounding] [dramatic music]
[tense music]
- [Narrator] In 1918, an ambitious entrepreneur
from the south side of Chicago,
Walter Jacobs, is running his own Model T Ford dealership.
- He's much more than a car salesman.
He started out as an auto worker
and worked on the assembly line
at Ford's plant before going into sales.
- He liked tinkering with the engines.
He loved everything about the vehicle.
You could really say he was an early car junkie.
He really saw, this is the future.
- [Narrator] But after some initial success,
sales at his dealership have come to a screeching halt.
- Cars were generally prohibitively expensive,
were only owned by the ultra rich,
and most Americans didn't drive in them,
know how to drive them.
- It's just like any new technology.
Initially, everyone's super excited.
Those that can afford it, rush into it,
but eventually, the hype dies out.
- As a car salesman,
Walter's job was to take people on test drives.
- With more than 90% of Americans
still not owning a car,
getting behind the wheel of a car, test driving one,
this was like a trip to the amusement park.
- Driving is pretty risky.
You don't have airbags, you don't have seat belts,
it doesn't have many of the modern safety features,
but also, you don't need a license to drive.
- These people didn't, you know, know how to drive,
but now you have this thing with a clutch
and a throttle and three pedals,
and it was sort of like
a death-defying stunt extravaganza.
[intense music]
- Oh, geez.
[door slams]
Well, first one's always a doozy, right?
Don't worry, you'll get the hang of it.
[calm jaunty music]
- These were people mostly who had never driven a car before
who wanted to see the magic of a brand new car.
- So how about we step inside, finish up some paperwork,
and get you driving outta here in no time?
- Any chance I could come back tomorrow for another drive?
My girlfriend would get a kick outta this thing.
- Well, I mean, you could buy this car right now.
You don't have to wait till tomorrow.
[tense music]
- I need to think about it.
- All these people are interested in these cars,
but yet they're not ready to buy them.
- You're not interested in buying a car, are you?
[intense music]
- [Customer] Could I still come back for another test drive?
- This isn't a carnival ride.
- I'll pay.
[dramatic suspenseful music]
How much do you want?
- Jacobs realized that a lot of people
wanna drive a car,
but they don't need to invest in owning a car,
because people don't need a car every day.
- He sees how romanticized they are for the cars.
He's seen the love affair that's taking place
on that dealership lot.
He sees how much they want to touch them,
feel them, experience them.
[intense music]
- So he comes up with an idea that,
what if we allow people to rent cars
to satisfy that curiosity
without making them make the major financial investment
of owning a car?
- He's the son of a traveling salesman
and he would see his dad rent a horse and buggy
to make his sales calls.
- If he rents cars by the day
just like his dad did with a horse and buggy,
he could open up a new market of new customers
who didn't think they could afford a car,
and he might make more money
than if he sold them in the first place.
- [Narrator] Jacobs' groundbreaking idea
is the catalyst for a new modern convenience
people everywhere will learn to rely upon
and what will become a $120 billion global market.
But for now, he'll need to convince people
to do something completely new,
rent cars instead of buying them.
- So in 1918, Walter Jacobs takes his entire life savings
plus $2,500 that he borrowed from friends and family,
and he basically converts the dealership
into a rental office.
- Rent-a-Ford, how can I help you?
- Walter Jacobs' family thinks,
well, that's a little bit crazy.
Rent a car? I don't see it.
- They were worried that the customers
would wreck the cars or never return them.
Yet he takes that risk.
- He didn't just grab a couple cars and see how it went.
He so believed in this concept that he went all in
for a fleet of 12 black Model T Fords.
That's the modern day equivalent of a $300,000 spend
to try a business model that had never been heard of before.
- Sure, sure, when are you looking to rent it?
And by the hour or the full day?
- He charges 20 cents for each mile driven
with a minimum for a dollar for an hourly rental.
- It's $10 a day.
- For an extra fee,
he would let you rent a self-starting car
versus one that required to crank start.
So he was already trying to get the upsell
out of the customer in the early days of rental cars.
- [Narrator] But only a few months after opening,
Jacobs is off to a slow start.
- Rental cars never existed anywhere else
other than with him.
So he had to actually educate the consumer
as to what he was doing.
- No, I won't be driving the car for you.
You drive the car yourself.
- It wasn't clear enough that the car didn't come
with a driver who was gonna drive you around.
You had to drive yourself.
- Hello?
Hello? Are you there?
- But he refuses to give up.
He believed in this vision so strongly
that this is something the American public will want.
- [Narrator] Jacobs even gives his business a clearer name,
Drivurself, and he doubles down
on an all-out marketing blitz.
- This guy was doing everything he could, outdoor posters,
classified ads in the telephone book,
full page ads in the Chicago Tribune.
- He decided, I have these rental cars
driving around Chicago,
I'll make it a traveling billboard.
So he takes an open-air car, puts a billboard on it,
drives it all over Chicago.
Rent a car.
- [Narrator] Soon, Jacobs' relentless pursuit
starts to pay off.
[upbeat rock music]
- It really began to grow and take off
because so many Americans wanted this experience.
- People were rolling in the door
to drive a car for the first time or to take short trips.
- Within just eight months,
Jacobs' business was growing pretty fast.
In fact, he even doubled the number
of Model T cars he had from 12 to over 30.
- [Narrator] But now
he's struggling to keep up with demand.
- Walter Jacobs is a one-person band,
if you will, in his rent-a-car business.
He's renting cars at the counter.
He's acting as a mechanic, repairing them.
He's even washing them.
He's doing it all, and the business is growing so fast,
he's losing his mind, like,
how am I going to keep up with this?
[intense music]
- [Narrator] Over the next five years,
Jacobs' rising success gains notice.
[intense music]
- Jacobs catches the attention
of one of Chicago's most powerful businessmen.
- He had an extremely modest upbringing.
He was from a Jewish community in Eastern Europe
that immigrated to America and settled in Chicago.
- He eventually becomes this young man, a car salesman,
and he sees a world of opportunity.
- [Narrator] Now he owns the largest taxi cab company
in the world.
- He'd seen a study that yellow with a tinge of red
was the most visible at a long distance,
so he paints his taxi cabs yellow.
You see those yellow taxis in the US, all over the world?
He's the one who came up with that concept.
- His yellow cab business is so incredibly successful,
in a couple of years,
he's bringing in the modern equivalent
of $4.5 million annually.
- But there's a problem.
The taxi business is cutthroat.
People are dying, there's labor issues,
and here's this rent-a-car business.
You rent a car, the renter drives it off.
You don't have to pay a driver.
- He saw what Jacobs was doing and thought,
I need to be in the car rental game.
[dramatic suspenseful music]
- [Narrator] The man's name
is John D. Hertz.
[intense dramatic music]
[intense music]
- [Narrator] In Chicago, the owner of the city's
biggest cab company,
John D. Hertz, finds himself at a major turning point.
- Tensions between the taxi drivers
of Hertz's Yellow Cab Company and its rival,
the Checker Cab Company, have been brewing for years,
and now, they're spilling out in violence
in the streets of Chicago.
- [Narrator] With the future of the taxi industry
suddenly in flux...
- And how long will you be needing it for?
- [Narrator] Hertz figures out another way to hedge his bets.
[dramatic music]
- All right, we'll see you then.
I'm sorry about that.
How can I help you?
- How many vehicles do you own?
- Oh, we've got plenty to choose from.
- Walter Jacobs was having incredible success
with his rental car company, but it was growing so fast,
it was almost more than he could manage.
- And you charge 10 bucks a day?
- That's right. The first 100 miles are included.
- Annual revenues must be, what, 100,000, two?
- Sir, are you interested in renting a car today?
- No, not really.
I'm interested in buying the business.
John Hertz.
- As in the Yellow Cab Company?
- You have a nice operation here,
but you're only based in Chicago?
You should be doing this nationwide.
- Hertz has the experience
of replicating the Yellow Cab model in other cities already,
like New York and Philadelphia,
and he wants to do the same thing
with Jacobs' rental car business.
- [Narrator] But Jacobs doesn't jump at the opportunity.
- Name your price.
[tense music]
- It is not about the money.
- Had Hertz wanted to, he could've steamrolled Jacobs,
but he didn't.
Hertz sees a lot of himself in Jacobs,
this young, fiery entrepreneur, that never-quit attitude.
- John D. Hertz makes a deal
to buy Walter Jacobs' rent-a-car company,
and it becomes the Hertz Driv-Ur-Self
rental car company.
- [Narrator] But Jacobs isn't ready to walk away just yet.
- Walter Jacobs didn't sell his company and say, bye bye.
He's like, oh, I'd like to be a part of this,
so he joins the company serving as its president
and John D. Hertz's right-hand person.
- Hertz not only gave the business his name
but also the familiar colors of his Yellow Cab Company.
- Suddenly, there's this identifying brand
that American consumers can relate to.
- [Narrator] With a goal to expand
and become the first national rental car company,
Hertz implements a novel strategy at the time,
franchising.
- Hertz piloted franchising
before fast food restaurants or gyms did,
and the model that they used
was called the conversion model.
The conversion model idea actually came
from the oil industry
where they would give independent repair shops
the authorization to use their brand.
- Hertz saw this and became the first car rental business
to follow a similar model.
- [Narrator] Hertz starts by targeting the growing number
of independent rental shops popping up across the US.
- They knew to grow fast, they couldn't do it themselves.
So they reached out across the country
and found a network of mom and pop owners
to become franchisees,
to fly the Hertz flag and help them grow fast.
- Basically existing businesses would convert
into a Hertz business,
and they would get to have that familiar branding
that would allow someone who was on the road
to know that they would get Hertz service.
- The brilliance of Hertz's maneuver here
is that he eliminates the competition
and grows his brand
at the same time.
- By 1925, they were the first to go coast to coast
with a true rental car network.
Soon they're in more than 1,000 locations across America.
- [Narrator] But while the rental business booms,
Hertz' other enterprise is suffering.
- All of a sudden,
the Chicago taxi wars were quite dangerous
for John and his family.
Two of his yellow cab garages get bombed.
31 of his horses die in a terrible arson blaze.
Someone even threatens to kidnap his grandchild.
- It's nearly noon. Where you been?
- I had a meeting with General Motors.
- John Hertz realizes it's time
to move into another business.
[intense music]
- How much did they offer you?
- 40 million plus a seat on the board.
- Jacobs has no real control.
He may have started the company,
but at this point, he's basically an employee.
- So what does this mean for me?
- And every single thing that he's built
is resting on this decision by John Hertz.
[dramatic suspenseful music]
- [Narrator] After only two years overseeing the expansion
into the first national rental network,
John D. Hertz cashes out.
- So in 1925, John D. Hertz decides
to sell both his yellow cab
and his yellow truck manufacturing company
to General Motors for about $40 million,
and the rental car company becomes sort of swept up
in part of that deal.
- General Motors is trying
to become the largest passenger car company in the world.
They're chasing Ford,
and they think Hertz is an opportunity
for them to grow their car business.
- The sale is great for Hertz,
but it really overlooks the guy who built this company
with his bare hands, Walter Jacobs.
- Well, I talked 'em into keeping you on as president.
Look at this as a good thing.
You have GM money now.
Use it.
- He's now the head of this massive company,
which is awesome,
but now he has all this pressure on him to succeed,
and the issue is he has a fraction
of the business savvy that Hertz does,
and he has to now prove he has what it takes to be the man,
be the leader,
and shepherd this company that was his brainchild.
- [Narrator] With a huge network of locations
to manage on his own,
Jacobs works on creating a better system to connect them.
- One thing Jacobs realized was that many
of his customers complained about not being able
to travel far distances without breaking the bank.
Ever since Jacobs started his car rental business,
all car services required customers
to return the car back to where it came from.
[intense music]
- He thinks, we have this national network,
but what if you could rent a car in one location,
drive it all the way across America,
drop it off, and leave it there?
Bingo.
- [Narrator] In 1933, Jacobs unleashes the first ever
one-way rental option.
- With the creation of one-way rentals,
the degree of freedom that a rental car can give you
is now exponentially increased.
- The one-way rentals turned out to be a huge success.
Jacobs' idea was a winner, and this was so important to him
because he was finally out of the shadow of Hertz.
- [Narrator] Meanwhile, over the past few years,
the numbered highway system
has been introduced across the country,
making navigating new places much easier.
- The more roads we started laying down,
well, the more people were willing to travel.
- We have these highway systems springing up in a new way
so people can kind of travel across America in a way
that was just impossible even a couple of decades earlier.
[intense music]
- [Narrator] There's also a surge in train travel,
which gives Jacobs another revolutionary idea.
- So Jacobs really subscribes
to the entrepreneurial philosophy of innovate or die,
and he came up with the rail drive system
where he had rental cars waiting
when you got off the train at the train station.
- The fact that you could arrive at the train station
and rent a car and be off to your destination
was a game changer.
- [Narrator] Thanks to the success of rail drive,
Jacobs focuses on an even bigger conquest.
- Hertz was easily number one in America
as a rental car company,
and they were ready to grow and take across the world.
[dramatic music]
- Elizabeth, can you get me detailed maps of Canada?
Toronto, Vancouver, Montreal, all the major cities?
- 1938, Hertz moves into Canada.
- [Narrator] After becoming the first
international car rental company,
three years later, Jacobs is ready to expand even further.
- They have eyes on Europe, but a big problem arises, war.
[dramatic music]
- The United States enters World War II in December of 1941,
and who would've thought it would last four years?
- On January 1st, 1942,
the US government freezes all sales
of domestic cars in America.
- All American resources, from food to materials,
were being channeled into the war effort,
and that means that companies like General Motors
were no longer making passenger cars.
Every ounce of metal was being used to create airplanes,
ammunition, and military vehicles.
- [Narrator] With the automotive industry completely focused
on the war effort, Hertz prepares for the worst.
- Suddenly, this car-hungry America can't get new cars,
but there's Hertz with its national network.
They were number one already,
but they grew by leaps and bounds during the war because,
in many ways, they were the wheels for Americans
to get where they wanted to go.
[dramatic music]
- [Narrator] But the unexpected high demand
for Hertz rentals leads to some issues.
- She's parked right over there.
- This man is a Hertz customer,
and when he lands in the city,
he has to go at extremely long distance
to an unpleasant part of town just to get his car.
- That's my car?
You're not serious.
- The quality of rental cars was diminishing quickly
because there were no new cars being produced.
So the rental cars that were out there were falling apart.
They weren't getting serviced properly.
It was not a great experience.
- Don't worry, it'll get you from A to B.
- And this particular moment
not only can damage Jacobs' reputation,
but it's going to turn this customer
into his fiercest competitor.
- Here are the keys, Mr. Avis.
[intense dramatic music]
- [Narrator] After World War II ends in 1945,
automotive factories make the switch back
from war to peacetime production.
- The government halted sales of cars starting in 1942,
and until 1945, not a single civilian car
or commercial truck was built.
- The automobile industry really picks back up
after World War II
because we had this post-war economic boom
where all of these post-war suburbs spring up.
- [Narrator] As the suburbs grow,
the need for new cars skyrockets,
and after returning home from service,
an Air Force veteran quickly sets his sights
on tapping into this lucrative industry.
His name is Warren Avis.
- Fresh out of military,
looking for a new venture, he thinks,
now that the war is over,
there's a backlog of people wanting cars.
Production's back in process.
So Warren Avis opens up a Ford dealership.
He's very ambitious, he's very hungry,
and he thinks this is gonna be his golden ticket.
- [Narrator] Avis sinks in $10,000 of his own savings
and secures a $75,000 loan,
but a new government ruling puts a damper on his plan.
- The federal government had actually put a cap
on what you could charge
for an automobile to curb inflation,
but what it also does is curb the car salesman's ability to,
you know, make a living.
- Got you set up with all the bells and whistles,
everything top of the line.
- [Narrator] However, Avis finds a clever loophole.
- Your signature and deposit,
and we'll let you know as soon as we have one available.
- Why can't I have one today?
I saw several on the lot.
- Those aren't for sale just yet.
We're hoping in six months.
- He realizes, you know what,
let me hang on to my new cars for half a year
and sell them as used cars.
Used cars are not subject to the controls
of the federal government.
- My advice, reserve your spot
before the wait list gets any longer.
- He can sell used cars for a whole heck of a lot more
and in some cases,
even twice what he could've sold the new car for.
- That's okay.
Thank you anyway.
[intense music]
- But times are hard for Avis.
He's buying inventory and letting it sit for six months,
and that's causing a huge cash flow problem.
So he had to change something.
- He thought, well, if Americans are itchy
to drive these things
and I have all these cars on the dealership lot,
we should put new cars into the hands of renters.
- And he says, well, I'm gonna rent them for six months,
and then I'll sell them as used cars
and make even more money.
- Avis has seen firsthand
that Hertz's rental cars are beat up and outdated models.
Avis has the idea that his cars will always be brand new.
- Avis approaches Ford Motor Company, and he says,
"Hey, have I got a deal for you.
If you make me a great bargain on these new cars,
renters will get to see, drive, experience this new car,
and they're a lot more likely to buy one."
- [Narrator] But even in Avis's hometown of Detroit,
Hertz holds a monopoly over the all-important city center
and railway locations.
So Avis turns his attention
to an untapped transportation hub, airports.
- During World War II,
military aircraft had actually used local airports
for official purposes, and so the net result of that
is that they had improved them.
They had built new hangars,
they had made sure that the runways were in great shape.
And after the war,
those weren't needed for military purposes.
- Thanks to a lot of the advancements
that we had during World War II,
now air travel was starting to seem incredibly reliable,
safe, and more importantly,
extremely efficient for business travel.
- But that business person lands
and he has to go to a meeting 50 miles away
from the airport, and the rental car companies
are all located downtown in garages.
They're not accessible.
[intense music]
- When Warren Avis was in the Air Force,
he firsthand experienced the challenges
of getting to a new city without any real convenient
or reliable way of getting around.
Famously, he used to put his bike in the bomb bay doors
so that when he landed, he could at least get around.
- [Narrator] Avis believes this inconvenience
is something he can take advantage of.
- Avis has this genius idea
that Hertz hasn't yet figured out,
to bring the car rental agency
to the customer directly at the airport.
- [Narrator] This idea will one day birth
a $12 billion a year empire
with over 5,500 locations in 165 countries.
Now he just needs the perfect place to test out his concept.
[contemplative music]
And in 1946, he finds one 30 minutes from downtown Detroit,
the Willow Run Airport.
- Oh, okay.
Yeah, that's pretty steep.
Let me ask you this,
what would be the cheapest location?
- He negotiates setting up a rental car counter in the
last place most businesses would want to be located,
which is an airport baggage claim.
- Thank you very much.
[receiver slams]
- Even though there is no question that the future
of travel was going to involve flight,
the future was not there yet.
Most Americans had not yet set foot on a plane,
so to kind of stake your business
on that kind of site was really risky.
- From the moment passengers arrive at baggage claim,
you've got 20 minutes to turn them into paying customers.
- While passengers are waiting for their bags,
Avis employees have the chance to pitch them
on the concept of the rental car.
- Most important thing,
our cars are located just outside
in the lot across from the terminal,
and you even walk them straight to their car.
They mention Hertz, pretend you didn't hear it.
Just keep talking.
[tense dramatic music]
- [Narrator] In 1946,
Avis Airlines Rent-a-Car officially opens
for business at the Willow Run Airport
on the outskirts of Detroit.
- Customers could get their bag, talk to an agent,
rent their car, and drive off wherever they wanted to go.
By making it easy, by making it accessible,
they started a rental car revolution.
- I personally travel a lot, and I rent cars a lot,
and it's hard to ever imagine a rental car economy
without renting cars right at the airport.
- Could you imagine flying, landing at your airport,
oh, I need my car.
Wait, I have to figure out how to get downtown
to a garage to get it?
That wasn't gonna work.
- [Narrator] After his initial success,
Avis is determined to build a rental empire
that rivals Hertz.
- His focus was on opening airport locations
because there was no competition there.
[paper rustles]
- [Narrator] This time, he picks an airport
in one of America's hottest vacation spots.
- So Warren Avis chooses to expand his business
halfway across the country in the Miami-Dade Airport.
Avis, having been a major in the Air Force,
knows the big transit hubs, sees where people are traveling,
where the most air traffic is going.
- [Narrator] But expanding to a high profile location
puts squarely on the radar of his biggest competitor.
- Hertz had been running at number one for so long,
they weren't paying much attention to Avis.
- He'll be out of business in a year.
- Jacobs doesn't take Avis too seriously,
doesn't know who he is.
He thinks renting cars at airports is kind of a novelty.
- In fact, their strategy was,
let's not worry about what they're doing.
We're number one.
[dramatic suspenseful music]
- [Narrator] It's a decision that sets the stage
for a dramatic power shift in the rental car arena
and will put Jacobs on the back foot
of the industry he invented.
- He will soon find out that the truth hurts.
- [Narrator] Just as Warren Avis
is getting his airport car rental business off the ground,
technological advancements in the 1950s
catapult American aviation into a new era.
- For the first time,
you see companies like Boeing constructing jet engines
for commercial planes.
- With those big engines,
it suddenly made flying commercial air affordable
the same way the Model T put America
on wheels decades before.
That was the dawn of the jet age
for American consumer travel.
America was ready to fly.
[dramatic music]
- [Narrator] But even with air travel up 1,500%
since the previous decade,
Warren Avis's plan for expansion is off to a slow start.
- Warren Avis opens up in Miami with 11 cars,
that's his fleet, and didn't quite go as he'd hoped.
He's not getting the business that he wanted,
so he's a little bit perplexed.
- Miami International Airport is a massive airport,
and it's incredibly hard for the employees
to get the word out about his rental car opportunity.
So Avis realizes he needs to find another way
to reach customers at the airport.
[tense music]
- Warren Avis realized that customers
are essentially sitting ducks on flights.
He has the idea to put advertising brochures
in the seat back pockets.
[paper rustles]
- [Narrator] Avis strikes a deal with American Airlines,
and that's just the beginning.
- Just to let you know,
American Airlines will be running them.
No, not just American, Continental, TWA, and Pan Am.
- Nowadays you have everything
from restaurant recommendations, coupons,
car rental information, but all of that begins with one man.
- Sure, I can send you a shipment.
[receiver thuds] [dramatic music]
- [Narrator] As business soars in Miami,
Avis rapidly expands over the next seven years.
- Avis sticks to his plan of operating at airports
and makes deals with airports across the country.
- Americans have more leisure time.
They wanna take vacations that they can drive on.
- As people go farther away from their homes
and have to fly there, they need a car when they get there.
So when you're on vacation,
having a rental car makes it much more easy
to get around an unfamiliar place.
- For the first time, you can come and go as you please,
explore what you want, when you want, where you want.
- [Narrator] By 1953,
Avis becomes the second- largest car rental company
in the US, spreading to 75 airport locations
from Washington, DC, Dallas, New York,
to right in Hertz's own backyard, Chicago.
[intense music]
- I saw this on my flight in.
They had a counter at baggage claim.
It was packed.
- It's been years
since Avis launched his first airport car rental service,
and Jacobs hasn't made the move
to put Hertz into airports as well.
- So much of their market share
was being eroded by this upstart
that quickly became number two.
Walter Jacobs and Hertz were like, what's happening here?
- This is a huge wake up call for Jacobs,
seeing as how he, you know,
invented the idea of a rental car,
and now he has competition that is somehow beating him
at the game he created.
[dramatic suspenseful music]
- O'Hare International Airport, please.
- So Jacobs says, okay, I want a piece of the action.
- Hi, yes, I was interested in leasing a booth
or some counter space in baggage claim.
No, Hertz.
[intense music]
I didn't realize you had an exclusive contract.
- Avis had negotiated exclusivity rights
to all the airports.
You gotta love a good exclusivity agreement.
I mean, that is brilliant.
- No, that's all.
- The revelation that Avis has exclusive contracts
at all of these airports
isn't just a little bit of a hiccup.
It could spell complete and total disaster and failure
for Jacobs and the entire Hertz company.
- Find out every airport Avis is in and every one he isn't.
I wanna list on my desk by the end of the day.
- He realizes that the entire industry is shifting,
and car rentals at airports are crucial,
and if he does not find a way to surpass this obstacle,
Hertz may go the way of the dodo.
[dramatic suspenseful music]
[dramatic music]
- [Narrator] In 1953,
Avis is the nation's number two rental car company.
- Thank you very much. - And they continue
to gun for Hertz.
- Warren Avis was not always known for his patience.
He liked to move fast, and, you know,
he's launched this big rental car company,
and he's looking up at Hertz up there at number one,
and he's like, we gotta grow.
- It's time for Avis's next phase
of his car rental takeover,
opening locations in city centers
right in Hertz's stronghold.
- [Narrator] As Avis closes in on Hertz,
[dramatic music]
Walter Jacobs will do anything to stay on top.
- At this point, neither Hertz or Avis
have become a truly international brand.
Hertz opened up a few locations in Canada, the UK,
and Mexico,
and now Jacobs is thinking further afield.
- [Narrator] And he brings his idea to a trusted friend
who is now on the General Motors board of directors.
- [John] What are you working on?
- [Narrator] John D. Hertz.
[dramatic suspenseful music]
[soft dramatic music]
- I wanna be the first in Paris's Orly Airport.
You think the board will go for it?
- I don't think the board will much care either way.
They're spinning off the rental car business,
part of a whole company-wide reorganization.
- By 1953, the car business across the globe
was such a big burgeoning business.
General Motors decided they would sell,
focus on the manufacturing.
- I wanted you to hear it from me.
- For Walter Jacobs, this is deja vu all over again.
If General Motors sells off Hertz,
whoever buys it could tell him to get lost
from the very company he started,
and he will not see a penny.
- We're the number one car rental company in the world.
- I know.
- Well, who the hell are they selling us to?
- Me.
[contemplative music]
- [Narrator] Over two decades
since selling his namesake rental company,
Hertz buys it back.
- John D. Hertz,
who was watching Avis make such a big move
on the company he'd founded and sold so many years before,
decided, I want this back.
[dramatic music]
- Hertz buys back the rental company for $10.8 million,
more than $120 million today, which is pretty amazing
when you remember he sold his entire company to GM
for almost five times that amount.
[tense music]
- [Narrator] With Hertz back in action,
he and Jacobs are committed to taking down Avis
and making Hertz a global empire together.
- Two years from now, I want us to hit 1,000 locations.
In 10 years, we should be in 1,000 cities.
- Finally, you're thinking big enough.
- When John Hertz finally decides to buy back the company,
he changes the name
from the deeply problematic Hertz Driv-Ur-Self
to just Hertz, a powerful one-word name
that has remained at that company till this very day.
- [Narrator] Hertz soon expands into large European cities,
beginning with Paris.
- Only five years
after opening their first European location,
Hertz became the first rental car company
to have more than 1,000 locations worldwide.
- [Narrator] As Hertz continues to seek global domination,
it's no longer just Avis they have to worry about.
- The National Car Rental System, or National,
came about with the gathering
of a couple dozen independent rental car agency owners,
and in Chicago, Budget Car Rentals sprang up,
and you could rent a car for $4 a day and 4 cents a mile.
This was unheard of.
- [Narrator] With new rivals joining the rental car race,
the market is flooded
and despite operating in over 350 locations,
in 1954, Warren Avis is feeling the heat.
[tense music]
- So with all the competition
from the smaller rental car agencies,
he realized that the competition was heating up.
Hertz was back in the game
with some new energy and some new blood,
and he decided he was gonna take his money and run.
[dramatic music]
- After making Avis
the world's number two car rental company,
Avis decides to sell for $8 million
and goes on to have a life as an entrepreneur.
[dramatic music]
- [Narrator] He sells the business
to a regional New England car rental company
for the modern equivalent of almost $90 million,
all from a $10,000 investment.
- What's kind of remarkable is that Warren Avis
was with his company,
the company that still bears his name,
for seven years.
Whereas Walter Jacobs was with Hertz for 50.
And in seven years, he changed the marketplace,
adding a level of competition
that had never been seen before
but also innovated the way cars are rented to this day.
- Despite the fact that Avis was able
to put a dent into Hertz's profits,
Avis was never really able to take the lead himself,
but nonetheless, the competition, the rivalry,
the innovations that came out of these two companies,
I mean, they've led to this now $100 billion industry
that we have for car rentals.
- [Narrator] Today, Avis also operates
Budget Rent-a-Car, and together,
they're in over 5,500 locations in 165 countries,
but their biggest accomplishment may be surpassing Hertz.
But despite this feat, Avis isn't number one.
It's a company that started in 1957 with a focus on renting
to customers whose cars are being repaired, Enterprise.
- Hertz and Avis,
they essentially invented an industry.
They changed the way we look at cars.
They changed the way we travel.
They've made our lives easier and more convenient.
They forever left their mark on society.
- When you go on a vacation,
you have the chance to almost reinvent yourself
and be someone else.
Maybe you can't afford to buy a luxury car,
but you could probably afford to rent it for a week,
and for that week, you can be whoever you want to be,
look how you want to look and drive what you want to drive.