Fire, Ready, Aim: How Car Rental Grew in America

The car rental industry was birthed and nurtured by entrepreneurs. To be sure, the industry went through ebbs and flows of ownership by auto manufacturers, financial holding companies and multinational corporations for which car rental was a convenient investment.

And today, the majority of the industry has settled into a corporate structure befitting of a $24 billion business in 2013.

It wasn’t always like that. It was the entrepreneurs who put fleet on the road and saw to it that rental cars would become part of America’s transportation infrastructure.

Those entrepreneurs, the ones who are still around, will tell you that they were never the smartest people in the room. They call themselves driven to a fault and lucky, though they created their own luck with a “fire, ready, aim” attitude.

Some made millions, as they washed rental cars in cheap polyester golf shirts with company logos. They wrote the rules because there were none. They weren’t always right, but someone had to figure this stuff out.

This article is by no means a timeline of car rental history or a comprehensive chronicle of key players. It is a collection of stories that highlight the entrepreneurial spirit, along with a few pivotal moments on which the industry turned a corner.

A FAMILY AFFAIR

Morris (Morey) Mirkin started Budget Rent A Car in Beverly Hills in 1958. Budget's rates were about half those of Hertz and Avis, which propelled quick growth, according to Mirkin's son, Jeff.
Morris (Morey) Mirkin started Budget Rent A Car in Beverly Hills in 1958. Budget's rates were about half those of Hertz and Avis, which propelled quick growth, according to Mirkin's son, Jeff.

“I remember being 5 and sitting in the living room and daddy was going to start a new business,” Jeff Mirkin recalls. “We needed a name, so we pulled out a dictionary and ended up with the name Budget.”

On June 15, 1958 in Los Angeles, with $10,000 borrowed from his mother-in-law, Morris (Morey) Mirkin, Jeff’s father, opened the first Budget Rent A Car on Wilshire Boulevard in Beverly Hills.

Budget was a cheaper, local alternative to the Los Angeles Airport rental companies, Hertz and Avis. Whereas those established companies charged $7 a day and 7 cents a mile, Budget’s rates were $4 a day and 4 cents a mile. Soon Hertz and Avis shot up to $10 a day and 10 cents a mile. “That created a differential that allowed Budget to take off from the very beginning,” Mirkin says.

Morey Mirkin wanted to start franchising immediately. He enlisted the help of Jules Lederer, a Chicagoan who was married to Mirkin’s cousin, advice columnist Ann Landers. Lederer brought the fleet financing and business savvy needed to grow Budget as a corporation.

Mirkin, a family man, stayed in Los Angeles to oversee the Southern California franchises while Lederer crisscrossed the country finding businessmen to cultivate the new brand. The headquarters would be in Chicago, while new franchisees would be sent to Los Angeles to learn car rental operations from the master Mirkin.

In its infancy Budget was a family affair, says Mirkin, who helped his father paint the first rental office building along with his mother and grandfather. On the car rental lot, the most important person was the mechanic. “Dad started with 10 or 15 used cars, and you had to keep them going,” Mirkin says. “I remember the mechanic working in the lot, all greasy, sometimes siphoning gas from one car to another.”

Many of the original franchisees were family members. “They may not have been the best business people, but Budget was a good model and a good name from early on,” Mirkin says. “My father made a lot of family members very rich.”

CONTINUED:  Fire, Ready, Aim: How Car Rental Grew in America
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Comments

  1. Jeff Congdon [ December 5, 2013 @ 09:36PM ]

    Chris,
    I am surprised that your article did not mention Team Rental Group who took their Budget franchises public in 1994 and was the largest Budget franchise group in the world.

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