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Car rentals - A walk down the history lane

Car rental services have become such an important part of our travel plans. Whether you are traveling to another city on business, or just exploring on a vacation, or your car has gone to the shop for a repair, chances are that you would be taking advantage of the available car rental services. When one thinks about car rentals, some very common and not so common questions arise, like, who was the first person to start a car rental service, when did it start and so on. While the growth of the car rental industry has been one of a kind, its history is closely related to the growth of the automobile industry itself.

While it is difficult to trace back the origin of the car rental industry, it is said that it was started in 1916, by a Nebraskan named Joe Saunders. Joe Saunders very unwittingly became the first ever to start rent-a-car business when he started lending out his Ford Model T to traveling salesmen. Back then, Joe Saunders used to charge 10 cents for every mile traveled. It is believed that the first customer of Joe Saunders was a salesman who was courting a girl and tried to impress her on a date.

Saunders enjoyed an upward growth in his car rental business until 1925 and it is believed that by then, he had 25 depots in twenty one states across America. However, it was short-lived. The economical collapse of America after the Great Depression brought down the Saunders business and, eventually, he had to file for bankruptcy.

While Saunders' business was prospering, there were other people who noticed the growth opportunities in the car rental industry and followed suit. Walter Jacobs, another American, started his car rental firm renting Ford Model T cars to his customers. Walter experienced tremendous growth before selling it out to a much larger Yellow Cab Company, owned by John Hertz. John Hertz, however, could not sustain the growth levels and settled down for selling it to the automobile giant General Motors. General Motors ensured the survival of the company with its huge investments. The Hertz Car Rental Company stills exists and is considered to be the largest car hire company in the world with its very unique yellow signage recognizable in countries across the globe.

Post-Second World War, the industry as a whole experienced an all time growth. This was due to the increased air traffic that increased. Airlines were becoming one of the very common means of business travel and car rental services became a very important means of within-city travel for these business travelers. During this time also, Hertz was running ahead of all the other car hire companies, having the foresight to have his car rental desks set-up near the airports. Another entrepreneur who followed the footsteps of Hertz was Warren Avis. He based his entire car rental operations near the airports that were likely to have a lot of travelers.

Another major car rental company that emerged was the National Car Rental System. National Car Rental System was formed in St. Louis, Missouri, on August 27, 1947, by 24 independent car rental operators who teamed together and brought a more consolidated rental service across the country.

The rent-a-car industry grew much bigger during the 1980's and 90's and so did the competition, the price war and an increased interest in buying controlling interests in many of the leading rental car companies.

Since the rental car companies proved to be the major customers, buying them secured the sales numbers for the automobile manufacturers. In fact, car rental companies brought about 10 percent of all domestic auto sales in the early 1990s.

Rental car industry also became one of the major advertising tools for the automotive manufactures, as potential car buyers could get a first look of the car that was launched every year.

The car rental industry suffered a minor blow when air travel slowed down after the terrorist attack of 9/11 in 2001. But the car rental industry has come back with a bang in the past few years.

Now most number of the car rental companies offer online booking facility. According to 2003 data from rental companies, online bookings have become a very important tool for the industry, with 21% of the bookings coming from online agencies and 15% directly from the companies' web sites.

Even as we look at the car rental scenario in India, it looks very promising with many Indian companies and other global companies, in collaboration with Indian partners, are coming to the front. Many car rental service providers have mushroomed in the major India cities including Delhi, Mumbai, Bangalore, and Hyderabad and so on.

These cars come fully equipped with modern day technology such as a GPS that shows the easiest and most efficient route to your destination, a tamperproof meter which shows the exact distance traveled and an electronic billing device.

These car rental services come to your rescue when you are traveling early morning or late in the night. Since drunken driving is banned in India, they also take you home safely after a tiring all night party.