Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
Editorials & Other Articles
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
How the pandemic led to a rental car crisis just as Americans are ready to bust loose
Economy
How the pandemic led to a rental car crisis just as Americans are ready to bust loose
Consumers are fuming as prices have spiked after firms shed hundreds of thousands of cars, with fleets depleted until 2022
By David J. Lynch and Yeganeh Torbati
May 1, 2021 at 6:00 a.m. EDT
Avis Budget Group’s stock price closed at an all-time high on Friday, a sign that rental car companies’ fleet-shrinking strategies are paying off financially — even as they leave consumers fuming. ... Major rental car operators last year sold off more than 770,000 cars as the pandemic crushed demand and kept Americans home, according to Jefferies Group, an investment bank. More than one of every three rental cars that were in service before the pandemic are no longer available.
For customers, smaller fleets mean higher prices and longer waits. But for the rental companies, shedding car leases and cutting billions of dollars in planned purchases was the key to survival. Now that the economy is growing faster than anticipated and people want to travel, the companies are struggling to find enough cars. ... “Usually car rental is an afterthought,” said Benjamin Tuttle, a computer-assisted design programmer from Minnesota, who was taken aback when Hertz quoted him a price of $240 per day to rent a sedan to tour Colorado’s Rocky Mountain National Park.
[GDP growth in first quarter shows signs of boom to come.]
The industry backfire illustrates that the post-pandemic recovery, while strong, may not be entirely smooth. As more retail businesses reopen, many report trouble hiring enough workers to cope with surging demand. Manufacturers complain that raw materials are scarce — a semiconductor shortage that hobbled auto production is making it hard for companies like Avis to restock.
“The covid shock was unlike anything we have experienced before. As we go into the recovery phase, we’re going to see friction and disruption in the normal flow of economic activity,” said Kathy Bostjancic, chief U.S. financial economist for Oxford Economics. “It’s going to be a bit erratic and disrupted, but the pace of growth will be very strong.”
{snip}
David J. Lynch Follow https://twitter.com/davidjlynch
David J. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today.
Yeganeh Torbati Follow https://twitter.com/yjtorbati
Yeganeh Torbati joined The Washington Post in 2020 as a reporter investigating the tax, budget, trade and regulatory decisions made by Washington’s power brokers. She previously covered the federal government for ProPublica, and she wrote about immigration, national security and Iran for Reuters.
How the pandemic led to a rental car crisis just as Americans are ready to bust loose
Consumers are fuming as prices have spiked after firms shed hundreds of thousands of cars, with fleets depleted until 2022
By David J. Lynch and Yeganeh Torbati
May 1, 2021 at 6:00 a.m. EDT
Avis Budget Group’s stock price closed at an all-time high on Friday, a sign that rental car companies’ fleet-shrinking strategies are paying off financially — even as they leave consumers fuming. ... Major rental car operators last year sold off more than 770,000 cars as the pandemic crushed demand and kept Americans home, according to Jefferies Group, an investment bank. More than one of every three rental cars that were in service before the pandemic are no longer available.
For customers, smaller fleets mean higher prices and longer waits. But for the rental companies, shedding car leases and cutting billions of dollars in planned purchases was the key to survival. Now that the economy is growing faster than anticipated and people want to travel, the companies are struggling to find enough cars. ... “Usually car rental is an afterthought,” said Benjamin Tuttle, a computer-assisted design programmer from Minnesota, who was taken aback when Hertz quoted him a price of $240 per day to rent a sedan to tour Colorado’s Rocky Mountain National Park.
[GDP growth in first quarter shows signs of boom to come.]
The industry backfire illustrates that the post-pandemic recovery, while strong, may not be entirely smooth. As more retail businesses reopen, many report trouble hiring enough workers to cope with surging demand. Manufacturers complain that raw materials are scarce — a semiconductor shortage that hobbled auto production is making it hard for companies like Avis to restock.
“The covid shock was unlike anything we have experienced before. As we go into the recovery phase, we’re going to see friction and disruption in the normal flow of economic activity,” said Kathy Bostjancic, chief U.S. financial economist for Oxford Economics. “It’s going to be a bit erratic and disrupted, but the pace of growth will be very strong.”
{snip}
David J. Lynch Follow https://twitter.com/davidjlynch
David J. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today.
Yeganeh Torbati Follow https://twitter.com/yjtorbati
Yeganeh Torbati joined The Washington Post in 2020 as a reporter investigating the tax, budget, trade and regulatory decisions made by Washington’s power brokers. She previously covered the federal government for ProPublica, and she wrote about immigration, national security and Iran for Reuters.
3 replies
= new reply since forum marked as read
= new reply since forum marked as read
