Hertz CarSharing Would Be Perfect, if Not for Those Meddling

advertisement
29-10-2013
Data
Pagina
Search
Companies & Industries
Global Economics
Companies & Industries
Politics & Policy Technology
Markets & Finance
Innovation & Design
Lifestyle
Sharing
Hertz Car­Sharing Would Be Perfect, if Not for Those Meddling Customers
By Justin Bachman October 29, 2013 Business Schools
Small Business
www.ecostampa.it
1/2
Foglio
Video & Multimedia
Most Popular Feed Read Shared Discussed Yes, People Are Losing Their Insurance Under Obamacare
Plane Passengers Sleep Easier in 18­Inch Seats. Airlines Don't Really Care
Chipotle: The One That Got Away From McDonald’s
Goldman Sachs Tells its New Employees to Work Less
How Fast­Food Eaters Split Along Ethnic Lines
Yes, People Are Losing Their Insurance Under Obamacare
Chipotle: The One That Got Away From McDonald’s
As Spying Scandal Roils Capitals, Obama Holds Tight to His Trusty BlackBerry
More Companies See Advantage to Manufacturing in the U.S.
How Fast­Food Eaters Split Along Ethnic Lines
Obama's Top Economic Adviser Tells Democrats They're Going to Have to Swallow Entitlement Cuts
Yes, People Are Losing Their Insurance Under Obamacare
Is This Apple's Worst Product?
Photograph by Justin Sullivan/Getty Images
The business of sharing a car has many laudable attributes: Drivers pay only for what they need, rental companies enjoy better use of their fleets, and everyone can feel happier leaving the planet a bit less polluted. The trouble, of course, is that the technology can do only so much to assure that a car is where it needs to be at the proper time, full of gas.
The unknown person ahead of you with the shared wheels plays an important role in both the business model and your well­being. “The customer is part of your service­delivery mechanism,” says Mark Norman, president of ZipCar, the car­
sharing pioneer purchased by Avis Budget Group (CAR) for $500 million.
Mark Zuckerberg Flexes Silicon Valley's Political Muscles on Immigration
Ranking the States Where the Republicans May Be Most Vulnerable in in 2014
Companies Mentioned
CAR (Avis Budget Group Inc)
$29.01 USD ­0.39 ­1.34% HTZ (Hertz Global Holdings Inc)
$23.08 USD ­0.65 ­2.82% Market data is delayed at least 15 minutes.
Sponsored by
That fact can sometimes wreak havoc on a car­share business, as Hertz Global Holdings (HTZ) has been learning with a slew of customer service complaints about Ads by Google
its Hertz 24/7 operation. The company recently renamed the unit from Hertz On Demand, and before that it was called Hertz Connect.
posting rants on Yelp (YELP), Twitter, and additional social media venues. Many complaints deal with Hertz’s alleged failure to make reserved vehicles available at their appointed times and places. Hertz has also been accused of changing the pickup to a location miles away, giving as little as 15 minutes’ warning when reservations are changed, and employing brusque or clueless telephone operators Industries Jobs Accounting jobs
Advertising jobs
Business Development jobs
Consulting jobs
Ritaglio stampa ad uso esclusivo del destinatario, non riproducibile.
BUDGET
Post a Job
087216
The names haven’t brought happier customers, however. The most irate have been Data
29-10-2013
Pagina
Foglio
2/2
www.ecostampa.it
Public Relations jobs
unable to resolve problems.
Executive jobs
Hertz charges $10 for every 15 minutes a car is kept past its return deadline, but customers pay no penalty for returning vehicles to an alternate location, so long as it isn’t “unreasonably distant” from the pickup spot. The sharing technology has been equipped in Hertz cars in about 1,500 cities worldwide, with the largest U.S. market that of New York City.
Abby Huntsman, an MSNBC television host and the daughter of former Republican presidential candidate Jon Huntsman, was among those incensed this summer when trying to use Hertz 24/7.
Pharmaceutical jobs
Legal jobs
Marketing jobs
Media jobs
Non­profit jobs
Sales jobs
View all Industries jobs
Am not one to complain about customer service, but @Hertz and their 24/7 on­demand is the worst I’ve ever experienced! #unreal
— Abby Huntsman (@HuntsmanAbby) July 27, 2013
“It’s a new business, and like all new businesses, it has growing pains and we’re trying to learn as we go along,” Hertz spokesman Richard Broome says.
The car­share business has proliferated in recent years among traditional car­rental companies, which have huge fleets that can sit unused at any given time. The ability to equip a car with GPS and other tracking software, park it in a densely populated urban neighborhood or college campus, and have it used nearly every day is a financial boon. The other advantage is the economies of scale a large player can bring to a fleet business such as cars—from car purchase costs to insurance discounts.
“Synergy is an often­overused term, but one plus one is three or five” when properly merging a car­rental and a car­sharing model, Norman says. “It takes what are good unit economics [per car] and makes them very good unit economics.”
The industry has also seen a fair bit of consolidation, with smaller players bought by behemoths such as Enterprise Holdings, the largest U.S. car­rental chain and owner of the National and Alamo brands. St. Louis­based Enterprise has been expanding its CarShare business for several years and now has sharing fleets in 15 cities, 75 university campuses, and 40 government and corporate locations.
After it works out the kinks, Hertz hopes to see its 24/7 business expand into more suburban areas, serving as replacement for a second car. “We think it can really spread into the suburbs as people start to think, ‘Do I need to really own that second car?’” Broome says.
ZipCar also sees opportunities outside urban centers and universities, especially among commuters who find that they use their car for less than an hour each day or who want to curb their fuel expense. Norman, a former chief executive officer of DaimlerChrysler’s (DAI:GR) Canada business, says ZipCar will look to suburban areas that are developing around a greater use of mass transit and where there is “24/7 activity.”
Ritaglio stampa ad uso esclusivo del destinatario, non riproducibile.
BUDGET
087216
Bachman is an associate editor for Businessweek.com. 
Download