Hertz finding new ways to stay in the car-rental game.
Why it matters: Hertz is one of the largest employers in Southwest Florida, with around 600 employees in its Estero global headquarters.
The past three years have been tough ones for Hertz, with accounting issues that dogged the company; leadership changes at top levels; and a steady drop in earnings and share price.
But now the Estero-based car rental company, which relocated its headquarters from New Jersey to Lee County in 2013, faces a pair of external challenges that could last for years. One comes from ride-sharing pioneers Uber and Lyft, which dented the entire car rental industry with its transportation technology disruption. The other threat comes from autonomous vehicles, where tech giants Google and Apple, among other companies, plan to bring self-driving cars to the mass market.
But Hertz, with $8.8 billion in 2016 revenues, isn't giving up. “The end goal is to drive sustainable, broad-based customer preference for Hertz...(and) focus on the significant few things that will drive the customer experience,” Hertz CEO Kathryn Marinello said in the company's most recent earnings conference call with Wall Street analysts.
The company, adds Hertz CFO Tom Kennedy, in a transcript of the call posted on Seeking Alpha, has a unit dedicated to renting cars to Uber and Lyft drivers. That move, he adds, has been a successful step to utilize the company's strongest asset: it's fleet.
“I know from experience and I've said this before, you can't cut your way to growth, even when it's tempting in the face of earnings pressure,” Marinello said in the Nov. 5 call. “We've got a lot of work to do over the next five quarters to keep this company on an improved path toward market leadership, but we have a great foundation to leverage.”
Marinello cites Hertz's assets, including its 40,000 employees and global distribution network, as keys to beating back industry-wide challenges.
“That's how we'll win in the end, regardless of whether it's self-drive customers today or autonomous customers tomorrow,” Marinello said. “This isn't just about executing a turnaround; we're building for the future.”