Now coming to a mini-mall near you: another Hertz Local Edition. In case you haven’t noticed, Hertz Local Edition stores are becoming a staple of suburban shopping districts, right alongside Baskin-Robbins ice cream shops and Subway sandwich stores.
In the past three years, Hertz has nearly doubled its Local Edition facilities to more than 1,100 nationwide. The car rental industry’s airport king is making a serious push to snatch some market share away from Enterprise Rent-A-Car in the local market. For Hertz’s plan to succeed, Local Edition stores need to attract insurance replacement business as well as retail business.
In insurance replacement, rates are lower but rental periods are longer. This segment generated $4.7 billion in 2003. Enterprise’s market share in this segment is more than 85%, according to industry estimates.
From 1998 to 2003, insurance replacement revenues grew 38.4% — more than any other rental segment. Through economic downturns, national security alerts and public health scares, insurance replacement sales have risen steadily. It’s no wonder that Hertz — and to a lesser degree, Cendant Car Rental Group — has made insurance replacement a major part of the company’s expansion plans.
This comes at a time when some of Enterprise’s competitive advantages have diminished in value — most notably, the company’s Automated Rental Management System (ARMS). Enterprise is no longer the only car rental company that can manage rental transactions electronically.
Interconnectivity between a car rental location and a claims adjuster is now available to rent-a-car companies of all sizes, including small independents. TSD Inc.’s EDiCAR and Argo Development Systems’ Insurance Connection Online (ICO) both offer such capability. What’s more, a new software company, ClaimForce, introduced its claim service network this year and is aggressively marketing it to insurance companies throughout the country. Hertz Local Edition is on both the EDiCAR and the ClaimForce systems.
Dennis O’Mahoney, president of ClaimForce in Warrenville, Ill., says many insurance carriers welcome more competition in replacement rentals. “The reason why we got into insurance replacement and built a rental application is because our insurance contacts have told us they need alternative sources,” he says.