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Hertz Global Holdings Inc. raised prices for rental cars to be picked up Jan. 1 or later, blaming the decreasing value of its cars.
“Fleet costs are escalating due to declining residual values and, as a result, we have implemented price increases across our car-rental brands in the U.S.,” said Chief Executive Officer John Tague, who was hired just last month to help restore confidence in a company plagued by an aging fleet and sloppy accounting.
Investors, cheered by the prospect of increasing revenue for Hertz, sent the shares up 2.7 percent to $23.21 at 10:10 a.m. New York time, after they fell 21 percent this year through yesterday. The prices were raised Dec. 19 to 21 for the Hertz, Dollar and Thrifty brands, the Naples, Florida-based company said in a statement.
The company is also seeking to reduce costs beyond its existing program to cut expenses $100 million annually, while also increasing investment to refresh the car rental fleet.
Tague, 52, joined Hertz Nov. 21 to succeed Mark Frissora. Hertz, which said in September that Frissora resigned for personal reasons, hasn’t reported financial results in 2014 and has told investors not to rely on its last three years of financial statements.
Hertz had been poised to reap the benefits of higher prices after the consolidation it sowed in the rental-car industry. Its acquisition of Dollar Thrifty shrank the number of major rental- car firms in the U.S. to three from four. Those four, including Avis Budget Group Inc. and closely held Enterprise Holdings Inc., controlled about 98 percent of airport car rentals in the U.S., the Federal Trade Commission said in 2012 when reviewing the combination.
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