Rent a car, go to jail. Go directly to jail. Do not pass Go, do not collect (much devalued) loyalty points. That seems to be the message from Hertz. One Hertz elite member chalked up 4 arrests, spending 30 days in jail where she… suffered a miscarriage.
Much of the time, though not all the time, the problem seems to be with cars a customer swaps out midway through a rental (preferring a different vehicle) or where a customer extends a rental and the company doesn’t record the change properly. And they don’t withdraw false police reports, saying that if they did, the police might stop believing them.
Two things currently stand out about the issue.
- There are currently 40 active prosecutions of Hertz customers. According to attorneys representing customers suing the rental car giant, this is “because Hertz refuses to cooperate with investigators.” That’s not surprising when Hertz is facing numerous lawsuits over these arrests, but they’ve pledged to clean up their act.
- Hertz has not announced any actual changes to policy, technology, or procedures. Hertz’s CEO has acknowledged problems, and claims they’re fixed, but we keep getting new stories about it still happening.
And most importantly the rental chain has not outlined things they are actually doing differently, so it seems like lip service.
When news broke that the Biden administration’s nominee to head the FAA was served a warrant in a criminal investigation this week, one commenter immediately responded “I believe the issue is he previously rented from Hertz.” The company has allowed itself to be branded as so incompetent its customers go to jail for doing business with them.
That’s an issue for investors and the company’s board, because they’re certainly losing out on rentals as a result of the stories. Even if risk of imprisonment is small for any given rental, it’s the sort of long tail risk you don’t normally associate with reserving a rental car. And the consequences are bad enough, a certain segment of customers simply look at Hertz and say ‘why bother?’ That doesn’t just mean fewer transactions, it means lower prices to induce make up demand.
Hertz needs to speak clearly to this issue and explain how they’re going to stop it from continuing, and then they need to back it up with action.