History of Hertz Global Holdings

The image of a customer stepping up to a gleaming rental counter and taking possession of a car for a business trip or family vacation has long been anchored by a single name: Hertz. The story of Hertz Global Holdings is a study in American mobility – founded as a small Chicago car-rental operation, remade under industrial and financial owners, expanded by headline acquisitions, shaken by the collapse of travel during a pandemic, and repositioned through a major electrification push that the company later scaled back. The company’s history is as much about cars as it is about shifting ideas of ownership, corporate finance, and the travel economy.

1918–1930s: A Chicago start and the Hertz name

Hertz’s origins trace to September 1918, when Walter L. Jacobs opened a car-rental operation in Chicago with 12 Model T Fords. The concept – making motor vehicles available for short-term use by the public – met a growing demand as automobiles became common but not yet universally owned. The business grew quickly enough that, in 1923, it attracted the interest of John D. Hertz, the entrepreneur behind Yellow Cab and Yellow Truck and Coach Manufacturing Company.

In 1923, Jacobs sold his car-rental concern to John D. Hertz, and the business became known as Hertz Drive-Ur-Self System. Jacobs remained with the company as its senior operating and administrative executive. General Motors acquired the rental business in 1926 when it purchased Yellow Truck from Hertz. These early decades established a pattern of expansion that would recur throughout the company’s history.

1940s–1970s: Postwar travel and national networks

After World War II, the United States entered a boom in automobile ownership and leisure travel. Hertz expanded its footprint nationally through company-owned locations and franchises, especially at airports as air travel became common for business and leisure. The company invested in reservation systems, tie-ins with airlines and hotels, and a corporate sales force to capture businesses that needed rental fleets for employees.

By operating at airports and integrating reservations with travel intermediaries, Hertz positioned itself as a dependable partner for transient customers. That airport focus delivered both scale and vulnerability: airports concentrated demand and drove growth, but they also concentrated risk in economic downturns that disrupt air travel.

1980s–1990s: Public markets, diversification, and Ford ownership

Hertz became a visible public company and an emblem of a new consumer service economy. The balance between corporate rentals (longer-term business accounts) and retail rentals (shorter-term leisure customers) shaped fleet decisions and pricing. Through the 1980s and early 1990s, Hertz invested in computerized reservations and loyalty programs to retain customers who could choose among multiple national chains.

Ford Motor Company first acquired an ownership interest in Hertz in 1987. Hertz became a wholly owned Ford subsidiary through a series of transactions in 1993 and 1994, returned part of its equity to public investors in a 1997 offering, and again became wholly owned by Ford in March 2001 when Ford acquired the remaining publicly held shares.

2005–2006: Private equity buyout and the return to public markets

On December 21, 2005, investment funds associated with Clayton, Dubilier & Rice, The Carlyle Group, and Merrill Lynch Global Private Equity completed their acquisition of Hertz from Ford. The transaction paid approximately $4.4 billion in cash for Hertz’s common stock and relied on substantial debt and fleet financing. The sale reflected two industry themes: automakers shedding noncore assets and financial investors pursuing operational and financial returns from recognizable consumer brands.

In November 2006, less than a year after the buyout, Hertz Global Holdings returned to the public markets through an initial public offering of 88,235,000 shares at $15 per share. The IPO re-established Hertz as a publicly traded firm responsible to a broad set of investors and subject to the quarterly scrutiny of markets. Private equity’s efforts to streamline operations and prepare the company for life as a public company shaped the fleet and cost structures in the years that followed.

2012: Consolidation by acquisition – Dollar Thrifty

One of Hertz’s most consequential strategic moves in the 2010s was acquisition-driven consolidation. On November 19, 2012, Hertz completed its acquisition of Dollar Thrifty Automotive Group, the parent of Dollar Rent A Car and Thrifty Car Rental, for $87.50 per share in cash. The merger agreement had valued the transaction at an enterprise value of approximately $2.3 billion. The purchase broadened Hertz’s brand portfolio and extended its reach into value segments of the rental market that appeal to cost-conscious travelers and price-sensitive intermediaries.

The Federal Trade Commission allowed the transaction to proceed subject to divestitures intended to preserve competition, including the sale of Hertz’s Advantage business and rights associated with 29 Dollar Thrifty airport locations. Integrating Dollar and Thrifty increased Hertz’s fleet scale and diversified its customer base across price points and distribution channels. The deal also reduced the number of major national airport-rental competitors identified by the FTC from four to three, subject to the required divestitures.

2014–2019: Operational modernization and franchise strategy

Digital modernization and loyalty

Through the 2010s Hertz invested in digital reservations, mobile check-in, and loyalty programs such as Hertz Gold Plus Rewards, seeking to make rental faster and capture repeat customers. The company also pursued technology investments to streamline pick-up and drop-off and to integrate mobile apps into the customer journey.

Franchise strategy and fleet optimization

At the same time, Hertz managed a complex mix of corporate-owned airport locations and franchise-owned neighborhood outlets. Franchising offered faster expansion with lower capital intensity, but it created uneven service experiences that Hertz addressed with training and brand standards.

The era also saw steady emphasis on fleet optimization: shortening replacement cycles to maintain fuel efficiency, refining vehicle categories to match market demand, and managing resale channels to recover value. Growing complexity in distribution – the emergence of online travel agencies and price-aggregation websites – applied constant pressure to margins, prompting tighter cost control and strategic marketing to maintain direct customer relationships.

2020: The pandemic collapse and Chapter 11

The year 2020 marked a major inflection that prior strategies had not anticipated. The COVID-19 pandemic drove a sudden and severe plunge in global travel. Airports emptied, business trips were canceled, and leisure travel stalled under public-health restrictions. For a company whose revenues were concentrated in airport locations and whose capital commitments were dominated by vehicle purchases and lease obligations, the shock was existential.

On May 22, 2020, Hertz Global Holdings, The Hertz Corporation, and several of their U.S. and Canadian affiliates filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The filing followed a collapse in travel demand and the expiration of agreements that had temporarily deferred certain vehicle-lease payments. The bankruptcy process gave Hertz time to restructure liabilities, negotiate with creditors and lessors, and preserve an operating business that could serve a future recovery in travel demand.

The bankruptcy had implications beyond the immediate operational impact. First, it highlighted vulnerabilities in business models with heavy fixed capital and concentrated demand. Second, it turned Hertz’s fleet – which averaged more than 700,000 company-operated vehicles across its U.S. and international segments in 2019 – into a focal point of the restructuring. A bankruptcy-court order required the disposal of at least 182,521 vehicles covered by a U.S. fleet lease between June and December 2020. Third, the reorganization process created an opening for new ownership and strategic repositioning around emerging trends.

2021: Reorganization, new ownership, and a pivot to electrification

Hertz’s time in Chapter 11 unfolded as the global economy began to recover unevenly. The bankruptcy court confirmed the reorganization plan on June 10, 2021, and it became effective on June 30, 2021, when Hertz emerged from Chapter 11. The plan eliminated more than $5 billion of debt, provided new exit financing and liquidity, and brought in an investor group led by Apollo, Knighthead, and Certares. Existing equity interests were canceled and replaced with cash, a limited allocation of reorganized shares, warrants or subscription rights, while a rights offering supplied additional equity capital.

Emerging from bankruptcy was not simply a balance-sheet exercise; it allowed Hertz to reset strategy. On October 25, 2021, Hertz announced an initial order for 100,000 Tesla electric vehicles, with the vehicles then planned for delivery by the end of 2022. The company said the vehicles would support its rental fleet, while a subsequent partnership contemplated making up to 50,000 Teslas available for Uber drivers to rent by 2023.

That decision mattered in multiple dimensions. For Hertz it was a bet that customers – leisure travelers, corporate clients, and rideshare drivers – would embrace EVs. For the broader travel sector, it signaled that fleet electrification was becoming an operational priority as environmental commitments and regulatory pressure increased.

The period also saw notable leadership turnover that shaped strategy: Mark P. Frissora succeeded Craig R. Koch as CEO in July 2006 (becoming chairman in January 2007) and left in September 2014; Paul E. Stone became CEO in May 2020, and after emergence from Chapter 11 Mark Fields served as interim CEO beginning October 2021 until Stephen M. Scherr became CEO in February 2022.

2021–2023: Operational challenges and the electrification logistics

Turning a large vehicle order into an operating electric fleet proved to be a complex logistical challenge. Hertz’s strategy required not only taking delivery of vehicles but expanding charging infrastructure across its network, training technicians, and updating rental processes to address charging, mileage expectations, and customer education.

Several practical frictions emerged across the industry when rental fleets electrified. Customers vary in their familiarity with EV charging networks; airport infrastructure posed physical constraints; and the economics of vehicle downtime for charging had to be weighed against potential fuel and maintenance savings. Hertz’s move therefore required changes to back-end operations as much as fleet composition.

In parallel, Hertz’s reconstituted ownership pursued initiatives to recapture direct customer relationships and strengthen digital channels. The company leaned into technology investments to improve contactless rentals, streamlining pick-up and drop-off processes and integrating mobile apps into the customer journey. These operational shifts were intended to support margins and improve returns from the fleet.

Competition, market structure, and the future of rental demand

Hertz’s history cannot be separated from the industry’s competitive dynamics. Major players such as Avis Budget Group and Enterprise Holdings have long operated different mixes of brands and distribution models. Hertz’s acquisition strategy and brand portfolio aimed to ensure that the company could compete across price points and customer segments.

But the competitive landscape is changing for structural reasons:

• Consumer preferences: Younger consumers often prefer mobility access over ownership, yet they also demand digital convenience and environmental choices.
• Fleet economics: Vehicle financing, supply chain disruptions such as semiconductor shortages, and used-vehicle price volatility affect rental companies’ margins.
• Regulatory and environmental pressure: Cities and governments are pushing for reduced emissions, which affects fleet choices and infrastructure investments.

Hertz’s 2021 pivot toward electric vehicles was a response to these forces. The subsequent retrenchment demonstrated that fleet economics, residual values, repair costs, and customer demand could outweigh the anticipated benefits of rapid electrification.

Why Hertz’s story matters

Hertz’s history is a prism for larger themes in American commerce. It shows how a simple service – renting a car – scales into a national industry that relies on capital markets, supply chains, and customer-facing technology. It demonstrates the interplay between industrial strategy (where do you station cars?) and financial engineering (how do you fund a fleet?). And it reveals how exogenous shocks – in Hertz’s case, a global pandemic – can reset decades of corporate calculus in months.

Beyond corporate drama, Hertz’s choices matter to drivers, used-car buyers, airport economies, and cities thinking about emissions. Its experience with rapid EV expansion and subsequent fleet reduction illustrates the operational and financial challenges that large mobility companies face when adopting new vehicle technologies.

Recent years in brief

1. 2020: Travel demand collapses; Hertz files for Chapter 11 on May 22, 2020.
2. 2021: Hertz exits bankruptcy on June 30 with a new capital structure; in October it announces an initial order for 100,000 Tesla vehicles.
3. 2021–2023: Hertz implements an electrification and digitalization agenda while expanding charging infrastructure and adapting rental operations.
4. 2024: Hertz expands an EV-disposition plan to approximately 30,000 vehicles, citing demand, repair costs, and declining residual values.
5. 2025: Hertz reports that the 30,000-vehicle EV reduction has been completed and describes its use of EVs as de-emphasized.

These points capture an arc from pandemic collapse to ambitious electrification and then to a more cautious fleet strategy shaped by operating costs and customer demand.

As of December 31, 2025, Hertz remained one of the largest global vehicle-rental companies, operating through approximately 11,000 company-operated and franchisee locations across about 160 countries and jurisdictions, with a portfolio that includes Hertz, Dollar, Thrifty, and Firefly. Under CEO Wayne “Gil” West the company has emphasized a “Back-to-Basics” program focused on disciplined fleet management, revenue optimization, rigorous cost control, operational execution, and improved customer experience rather than rapid EV expansion.

Conclusion

From a 12-car Chicago operation in 1918 to a global rental network, Hertz’s history is a chronicle of adaptation. The company survived ownership changes, technological shifts, and new competitors; it has repeatedly redefined itself through acquisition, public markets, and strategic bets. The COVID-19 bankruptcy was the most dramatic inflection in its past century, while the post-bankruptcy EV expansion and subsequent retrenchment illustrated both the ambition and the costs of rapid transition. Hertz’s future will depend on how effectively it manages fleet economics, technology, and customer experience in a changing mobility market.