Hertz “RESCINDED” Fake Promises to Investors, Shares plunge

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It didn’t even bother explaining why. Investors are left to their own devices to figure it out.

On Friday after markets had closed, at the end of July, when no one was paying attention, the beleaguered rental-car giant Hertz rescinded in an SEC filing a big-fat promise it had made on May 31. The promise was made to induce investors into shelling out $1.25 billion for a new issue of bonds.

Hertz had promised in a May 31 press release, as these senior second-lien secured notes were being priced, that it would use the proceeds from the sale of the bonds to buy back existing debt. This was important to bond buyers. As Hertz claimed, the notes were issued “as part of an overall plan to optimize the Company’s capital structure.”

“Optimizing the capital structure” — that’s good. Not adding more debt. This is what it promised in its press release at the time:

Hertz intends to use a portion of the net proceeds from the issuance of the Notes, together with available cash, to redeem in full all of its outstanding $250.0 million aggregate principal amount of 4.25% Senior Notes due 2018 (the “2018 Notes”) and $450.0 million aggregate principal amount of 6.75% Senior Notes due 2019 (the “2019 Notes”). Hertz intends to use the remaining net proceeds from the issuance of the Notes, together with available cash, to refinance certain of its other existing indebtedness in one or more transactions following the consummation of the Offering, which may include repayments of outstanding borrowings and/or commitment reductions with respect to its senior credit facilities and/or repurchases, redemptions or retirements of certain of its other senior notes.

And then late Friday, it rescinded the above promises, emphasized with a sentence in red all-caps:

The Notice below is rescinded in its entirety because the conditions precedent set forth in such notice will not be satisfied on or prior to the redemption date set forth in such notice.

Here’s the a screenshot of the ALL-CAPS sentence:

In other words, the promises it had made on May 31 were fake promises. Friday’s filing didn’t even bother explaining why. Investors are left to their own devices to figure out why.




Maybe Hertz is bleeding so much cash that it cannot afford to redeem the bonds, that it needs the money so it can bleed a little while longer before it runs out, and maybe it had known all along that it could not redeem those bonds but it couldn’t tell bondholders because the yield would have shot through the roof and the cost of issuing this debt would have ballooned…

Whatever investors thought, they didn’t like it. On Monday, Hertz shares plunged 21% to $13.67.

The whole thing with that stock is ironic. On May 8, Hertz had posted a horrific earnings report for the first quarter that blew past even the dismal consensus expectations, and shares plunged 18% that day to $12.25. They continued to plunge and finally hit $8.70 on June 21, based on the reality the company faces, as per its earnings report:

Revenue got hammered as expense account travelers and tourists are shifting their ground transportation dollars from rental cars to rideshare companies. Expenses got hit by declining used vehicle values that caused depreciation expense to jump. And the bottom line got hit by a net loss of $223 million. So Hertz is in a pickle.

Here’s the irony: after getting beaten down to $8.70 on June 21, the bottom-fishers jumped in with a vengeance, and shares doubled to $17.34 at the close on Friday — before the “RESCIND” debacle was disclosed. But those that didn’t get out on Friday gave up a big junk or all of their profits on Monday. And those that had jumped on the bandwagon late are now licking their wounds.

Over the past 11 months, Hertz shares have plunged 74% as of Monday’s close.

Bond investors didn’t like it either. The yield on Hertz’s 6.25% bonds maturing in 2022 jumped nearly a full percentage point from 8.21% on Friday to 9.13% on Monday, with the price dropping from 91.8 cents on the dollar to 88.25 cents on the dollar. But back on June 9, the price had dropped as low as 80 cents on the dollar with the yield spiking to 11.3%. Buying this stuff after it plunges is how hedge funds make their living. They just gotta get out in time.

A week from now, Hertz will try again with another earnings report. Expectations are once again so low it will be hard to miss. But like last time, Hertz might one again manage to blow past the expectations on the downside.

It’s OK for a company like Hertz to struggle with operational challenges. The world changes; and it’s not easy to stay on top of it. But for a company to whack its investors around in this opaque manner with loudly propagated fake promises to the tune of $1.25 billion that are then quietly rescinded just two months later on a Friday summer night – that speaks of desperate measures to deal with desperate problems.

Rideshare companies are changing the way business travelers look at ground transportation, and the collapse of business travel spending on taxis and rental cars is just stunning. Read…  Uber, Lyft Mangle Rental Cars & Taxis. Other Sectors Next




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  66 comments for “Hertz “RESCINDED” Fake Promises to Investors, Shares plunge

  1. Truth Always
    Aug 1, 2017 at 12:12 am

    Is this legal? If so why the brohua?

    • Aug 1, 2017 at 12:19 am

      Deceptive? Keeping investors in the dark? Misleading?

      It doesn’t have to be “illegal” to be a problem that investors despise and react to. A company can go bankrupt and wipe out its investors, and that’s not “illegal” either.

      • Truth Always
        Aug 1, 2017 at 1:42 am

        Thanks Wolf. My remarks were tongue in cheek.

        That said as an immigrant and now citizen of America from India, I have ceased to be amazed at the latent corruption in this country. Where I come you assume everyone lies and fraud abounds.

        My first few years in America were in the naivete where I assumed this was a a county where everyone was honest. And that this was the best place in the world and I still believe it is. Though not sure for long before it degenerates into a corrupt 3rd world hell hole.

        In India the laws prevent deception but none are enforced, here enforcement is strong but the laws are written by lobbyists for their corporate interests.

        Couple of conclusions:

        1. The two party system is as bad as a single party rule. Give Americans enough sugar, fat and porn and keep deceving them while keeping up with fake sloganeering.

        2. Humanity is one from a racial/ cultural perspective. All humans cheat and lie in ways allowed by their habitats

        • Aug 1, 2017 at 4:19 am

          “In India the laws prevent deception but none are enforced, here enforcement is strong but the laws are written by lobbyists for their corporate interests.”

          An excellent and piquant observation.

        • Paulo
          Aug 1, 2017 at 7:28 am

          You forgot to add:
          *low priced liquor
          *inane tv shows
          *decline in public education funding
          *plenty of meth and oxy
          *legalized pot
          *strange religious interpetations of reality (example: sports stars pray before games and believe Jesus really does want them to win)
          *”Exceptionalism” meme
          *declining incomes = people running flat out
          *easy debt opportunities

          I take exception to the statement: ” All humans cheat and lie in ways allowed by their habitats”

          Many people in north America live a value-based life and try to impart this to their children, to the best of their ability.

          People are doing their best for the most part, however, the sands of everything are shifting. This shift may be by design for the wealth of a few, provided one believes in conspiracy theories. Or, we are simply moving past due date. :-)

        • Aug 1, 2017 at 8:08 am

          Truth Always,

          You said: “My remarks were tongue in cheek.”

          Oops…

          :-]

        • Frederick
          Aug 1, 2017 at 11:06 am

          Truth always Best place in the world Uhh NO not at all and I’m American born I used to think that After September 11 2001 and then the 2008 financial thievery I certainly DO NOT think that You need to travel more

        • Matt P
          Aug 1, 2017 at 11:12 am

          Not everyone lies and cheats, but those who do lie and cheat get ahead and thus get to make the laws. Humanity is doomed to end itself because of this.

        • Maximus Minimus
          Aug 1, 2017 at 11:47 am

          I do not second the second. It is the goal of the globalists to dilute the every decent culture to the lowest common denominator.

        • Michael Fiorillo
          Aug 1, 2017 at 11:51 am

          It’s not conspiracy, Paulo, it’s a generally agreed-upon consensus on the part of the Overclass.

          Their ideology calls for the monetization of everything, including the functioning of a captive State, which eventually and inevitably leads to the Overclass further enriching itself off its carcass.

        • Brian Richards
          Aug 1, 2017 at 3:13 pm

          Well said, and it would be wise for US born citizens to heed what TA writes.
          Having traveled throughout Latin America and SE Asia, I quickly became accustomed to the “extra fees” needed to accomplish some of the simplest procedures. I once thought “it will be good to get back to the US, where corruption is rare”. Ha, Ha. One learns, no? Our elite don’t even have the integrity of pond scum.

        • Gregg Armstrong
          Aug 1, 2017 at 5:25 pm

          Voting in the United States of America is participating in a vicious fraud as well as being pointless. The political parasites lie to everyone, except their owners who pay their bribes, about what they are going to do once elected. No matter what a political parasite claims that they stand for you can be assured 100% that they are lying.

          The political process in the USA is dead and needs to be buried. No election or series of elections will ever change anything because the political process is corrupt beyond redemption. Witness CONporations having more rights than flesh and blood citizens with none of the responsibilities.

        • chip javert
          Aug 1, 2017 at 5:52 pm

          I’m not saying the USA is perfect, but any equating of USA corruption levels to Latin America & SE Asia (or China, Russia, or anywhere in Africa) requires a willful disregard of reality.

        • chris Hauser
          Aug 1, 2017 at 10:57 pm

          ah, perspective.

          the fish stinks from the head, aye.

        • d
          Aug 2, 2017 at 2:16 am

          America is a grossly flawed example of “Two Party Rule”.

          The American system, is a fake democracy, owned by a Corporate Oligarchy.

          Its early 18Th century really 17Th century rules systems checks and balances can not control it.

          When faced with late 20Th 21St century financial systems and system manipulators that have at their disposal resources the founders could never have imagined.

          Particularly as the vast majority of said founder where never the Honest upstanding gents people, claim they where. They never really had the interest of “The People”, at heart, only “Their People”.

          Their arrogant, anti royalist, “we can do it Better than the British” has crated a far worse monster. Than the Westminster system.

          Which itself is not perfect and isflawed in todays world, in that it allows the left to repeatedly buy elections, with long term untenable promises. To the long term detriment of the country.

          A system that was designed to prevent Kings making illegal war’s on their whim, now allows prime ministers (Tony Blair) to do exactly that.

  2. Jim C
    Aug 1, 2017 at 12:32 am

    Do you think there will be lawsuit about the misrepresentation? Bankruptcy in the future? I would be mad if I were the bondholder of Hertz.

    • TJ Martin
      Aug 1, 2017 at 8:40 am

      You cannot take legal action agains that which is not inherently illegal . So you’re mad you say ? Caveat Emptor ( buyer beware ) would be their response … with full backing from the FTC etc … with an emphatic TSand the end to boot .

      • chip javert
        Aug 1, 2017 at 4:55 pm

        Just because it’s risky doesn’t mean it’s criminal.

        Investing in individual stocks is not and never has been for the naive. Investing has risks (including sharp-elbow companies that push the envelope being just one example). If this offends you, invest in index funds. BTW No, I do not think corporate activity like this should happen without severe consequences (stock & bond prices drop; management reputations ruined).

        Anyone who cannot read corporate financial statements (90%+ of American population) should invest in mutual or index funds. If the stock analyst hadn’t discovered the Hertz fudge, I doubt 5% of investors would have even known theoretically where to look for the disclosure.

        You wouldn’t attempt NASCAR stock car racing without proper training & experience (you’d literally get killed); why would you put your hard-earned money at risk without understanding what you’re doing.

  3. JR
    Aug 1, 2017 at 2:37 am

    Great book end article to your previous one “Uber, Lyft Mangle Rental Cars & Taxis”. The chart in the previous article really woke me up. I had not thought through the follow-on effects on rental car companies, or realized the damage wrought by the Uber-wrought ride-sharing ascendance. One must speculate that as VC’s pour money into loss-making Uber and Lyft etc, whether they are “hedging” by allegedly possibly maybe shorting the pin-action companies that are on a glide slope to ignominity.

  4. unit472
    Aug 1, 2017 at 3:54 am

    I’m curious if the rental car industries problems are, in part, the result of ‘subprime’ customers. I’ve noticed that the underclass seems to use rental cars from watching various reality police shows. Also, as I peruse the daily county arrest reports, the charge of ‘failure to return leased property’ has become more common. While this could be failing to return a rented TV set or sofa it also could be a rental car.

    I realize a credit card is necessary to rent a car but I also notice that Capital One and other issuers are sending junk mail offers again. When subprime credit cards and rental cars meet problems are likely to follow.

    • Harambe
      Aug 1, 2017 at 7:58 am

      Speaking of Capital One, I just checked my credit report the other day for the first time in a while. Capital One ran a credit check on me once a week for the past 2 years! I should mention that I do not now nor have I ever had a business relationship with them. I’m considering freezing my credit just because of this behavior.

      • TJ Martin
        Aug 1, 2017 at 8:44 am

        If you do not currently have nor ever had any business dealings with Capitol One yet they are running credit checks on you which you can prove you are in a position to take legal action against Credit One on several issues and levels

        But regardless .. freezing your credit is always a very good idea . Just remember to ‘ unlock ‘ it when applying for a loan etc

  5. BungaBunga
    Aug 1, 2017 at 5:25 am

    It is no surprise that ride sharing services are winning out over car rental companies. No one has mentioned how car rental firms treat their customers with utter contempt. How many of us have been treated to slow, poor counter service, surprised by hidden “repair” charges, “encouraged” to take expensive “insurance”, suckered by “return empty” fuel scams, just to name a few of the tactics these companies use to squeeze their clients.

    Hertz, Avis, Europcar.. Good riddance, I say!

    • Al Loco
      Aug 1, 2017 at 6:56 am

      I agree as I have been a victim of some pretty blatant rental car scams involving tolls and broken windshields. The problem is what happens when they disappear and all we have left are rideshare companies that also cannot survive because they are hemorrhaging money? Is now a good time invest in Greyhound and Pace!?!?!

    • Petunia
      Aug 1, 2017 at 8:33 am

      Back in the 80’s I reserved a Hertz car at the Kansas City airport, with my obviously Hispanic name. At the counter they rejected my reservation, even though I was a repeat customer, because they said I needed a credit card with at least $10K of credit. This had never come up before. When I pulled out a card with a $30K+ credit line the girl almost fainted. This is why I never rented from them again.

      They were this blatantly discriminatory in spite of having O. J. Simpson as their spokesman at the time.

      • mikey
        Aug 1, 2017 at 1:34 pm

        You need the 10,000 credit in case they decide to bill you for ‘repairs’. Last time, I put a scratch in the side of a rental car, it cost $3,000 – more than the car was worth.

    • TJ Martin
      Aug 1, 2017 at 8:58 am

      Ha ! Irony ( genuine irony not the current ‘ hipster ‘ version ) abounds in spades with your comment

      Fact is the ride share services have been equally if not more guilty of ; Treating their customers with contempt – Unfair and prejudicial business practices – Overcharging customers after the fact – Racial profiling in picking and choosing customers – Slow verging on pitiful service with NO recourse for complaint – Raising rates exponentially after the customer has agreed to the terms and entered the vehicle -etc – et al – ad nauseam . All of which has been reported many times in the REAL news .

      So give it a rest BB .. the virtual economy is just a guilty , greedy and slimy verging on the illegal as is the real economy . Such is the reality of the human beast in his/her fallen state . The only difference is … with the virtual .. you have virtually NO recourse to complain or take action .

      FYI; I/we have never been ‘ suckered ‘ by any car rental company in over 43 years because we READ the contract ahead of signing and have taken the time and effort to learn the tactics needed to acquire a fair deal . In other words .. You only have yourself to blame if you DID NOT take the time to read the contract before signing on the bottom line

      e.g Caveat Emptor … or suffer the consequences thereof .. your choice .. recognizing that Caveat Emptor applies across the board to all businesses be it virtual or ‘ analogue ‘

      • BungaBunga
        Aug 1, 2017 at 1:36 pm

        Well Mr TJ, I usually find your posts interesting. This one, on the other hand, stinks of self righteous bloviating. Yes, you are the smartest guy in the room who never turned up at the rental desk after a 10 hr flight and really wanted that car to get to where you were going and couldn’t even see straight to read the small print. You are of course correct. The contract lays it out, but there is no other choice. All car rental companies use the same scammy system. You cannot escape!

        You are of course correct about ride sharing companies. Exploitation is exploitation. From the customer’s point of view, tho’, the system is simpler with far fewer “hooks” than car rental. They generally do not hold 1000 dollar deposits or try to zap you months after the fact for dodgy “repairs”.

        What is needed is accountability; both on car rental as well as ride sharing..don’t you think?

        • chip javert
          Aug 1, 2017 at 6:15 pm

          I’m with TJM on this one.

          “…Self righteous bloviating…” indeed; more like informed consumer realizing he’s engaging in a non-trivial transaction.

          Repeatedly engaging in transactions for a highly mobile $20-50,000 asset and getting suckered by the “return empty” scam is hilarious.

    • Maximus Minimus
      Aug 1, 2017 at 11:09 am

      Have the same experience with Enterprise. And that in my home town. Now, multiply the scam when you are a tourist where you do not speak the language. Try not to return the car at the airport because they know you are in a hurry.

      • mike
        Aug 1, 2017 at 1:38 pm

        And maybe in a country where they drive on the opposite side of the road which is extremely narrow and bordered by stone walls with no shoulders and rains a lot. Enterprise charged me 3 times for the rental car and then 3,000 for a scratch on one side on my last trip to Ireland. Car was an old, very small one with 180,000 miles. I was able to get the extra two rental charges removed but not reduce the $3,000 damage charge (would actually cost a couple hundred). The credit card was supposed to cover the damage and did at first but somehow it got reversed later. Thieves all around. I love Uber.

        • fajensen
          Aug 2, 2017 at 1:01 am

          Please!? When renting a car in the U.K. just buy the damn insurance already!

          The car *will* get dinged on those roads and over narrow parking spaces. The hire company *will* screw *someone*, so, the rational choice of screwee is the insurance.

          … with Sixt, which I prefer, having the full insurance, means that one skip the wait for The Inspection and go straight for the lounge.

    • fajensen
      Aug 2, 2017 at 1:15 am

      I dunno, I always got from decent to great service on hire cars and never (knock wood) got screwed over by them.

      Last time I messed up the pickup place in London Heatrow so Sixt changed my reservation to match the “premium” range available from that place for free. This was nicely done, I think.

      Regarding the ride share companies, one wee problem for me is that the driver does not have a commercial insurance so when he/she has an accident, either the passengers or in the very best case the passengers insurance will have to sue the driver for compensation. Being in hospital and dealing with that kind of crap is just not worth it over that kind of money.

  6. patrick k
    Aug 1, 2017 at 6:00 am

    What is the stock symbol? HRI is quoted at 45 and change as of yesterday’s close.

    • David
      Aug 1, 2017 at 6:38 am

      Patrick

      HTZ is the symbol.

      • patrick k
        Aug 1, 2017 at 8:47 am

        Thanks, David

  7. Kent
    Aug 1, 2017 at 7:34 am

    Interesting times. People with more money than smarts are poring it into losers like Uber. Which in turn forces losses on related industries. Once we reach the bottom on prices and sustainable losses (we’re there), they start to discard any sense of ethical behavior.

    Soon it will be fun to see what happens when all the money and ethics are gone. What’s next up for destruction?

    • TJ Martin
      Aug 1, 2017 at 9:09 am

      … all of which reminds me of when the likes of Borders – Virgin B&N – Tower came in forcing many if not most of the independent record and book sellers out of business with below profitability pricing , strong arm [ in the business sense ] aggressive tactics etc … only for the majority to have now ended up out of business with the few remaining greatly diminished as the independents are once again making inroads and flourishing

      Aint we a brilliant sort ? Making the same mistakes over and over again with the exact same results regardless of our overly optimistic vision that THIS TIME .. things will be different .

      I dunno about you but I’d love to be some mystic guru sitting on a mountain top watching all this transpire with none of it effecting me in the slightest . Lord knows the laughs I’d be having

  8. mvojy
    Aug 1, 2017 at 7:54 am

    I predict Ford and GM will watch the car rental companies file for bankruptcy before they purchase their assets to come up with their own network of ridesharing using Enterprise and Hertz’s network and assets. Big companies that are facing disruption due to technology, Amazon and apps will be integrating other industries into their own just to survive. If no one is buying cars then the automakers have to find a way to utilize their own inventory in other ways. We aren’t at the point where we can 3D print our own cars to one off them.

    • Aug 1, 2017 at 8:48 am

      Interesting thought. Let me add a couple of things here…

      Ford bought Hertz many years ago but sold it again in 2005, having seen how tough this business is.

      But at that time (2005, 2006, 2007), Ford also tried to raise money in every way it could to survive what it apparently saw coming. And it did survive what was coming – at least better than GM and Chrysler.

      While I don’t think Ford wants to own its old collapsed rental car company again, I do think it is going to be involved in ridesharing when autonomous vehicles are commercially viable.

      • Jim H.
        Aug 1, 2017 at 9:18 am

        I see their “iconic logo” on rental bicycles locked in various downtown locations of Berkeley.

      • TJ Martin
        Aug 1, 2017 at 9:19 am

        Hate to be the bearer of bad news in light of your reactions to my comments concerning the realities of EV’s .. but Autonomous will never become commercially available according to the genuine vs the public *** Ai experts in the field due in no small part to the expense and complexity of the infrastructure needed as well as the extremely limited knowledge Ai has when it comes to the excessively complex functions of the brain in regards to driving . Hell Wolf … they can’t even figure out how we walk .. never mind drive . And yes Wolf I have an inside line to the world of Ai as well as Neurology etc .

        ——

        *** .. ” The problem with becoming a public intellectual is that over time you grow more and more public but less and less intellectual ”

        Jean Bethke Elshtain

        Words to remember and live by in these trying times of ours

        • Aug 1, 2017 at 10:16 am

          Be my guest and believe whatever you want to believe. This is a free country after all :-)

          That said, there are thousands of operational prototypes of selfdriving cars and trucks operating right now around the world, being tested and being improved with every mile they drive. New systems are being developed every day. What you read about it six months ago is already ancient history. But like I said, you’re free to believe whatever you want and get bliss out of those believes!

        • Kent
          Aug 1, 2017 at 10:58 am

          @Wolf,

          I’m going to stand with TJ on this one. While there are thousand being tested everyday, there are none being tested in real world every day driving experiences (at high speed, in heavy traffic, under non-optimal conditions).

          And everyday Google is learning that it is harder to make it work than they thought the day before.

        • Aug 1, 2017 at 1:13 pm

          Kent,

          >> “there are none being tested in real world every day driving experiences (at high speed, in heavy traffic, under non-optimal conditions).”

          You can inform yourself about the current status of testing in real world traffic situations. It’s all over the internet. These vehicles are doing amazing things already. Sure, they’re prototypes and not ready for mass production today. They’re testing vehicles. But they aren’t those little pods that Google introduced a few years ago suitable only for parking lots. They’re real cars and trucks in real traffic in real cities and on real highways.

        • kevin
          Aug 1, 2017 at 10:49 pm

          Oh btw, TJ Martin,

          You might want to check out this video showing how Boston Dynamics already “figured out how we walk” last year….

          Youtube has other videos of robots running, jumping, spinning as well.

          https://youtu.be/rVlhMGQgDkY

          Welcome to robot heaven or hell…depending on how you see it.

        • fajensen
          Aug 2, 2017 at 1:36 am

          Self-driving trucks are COTS in mining, today.

          “Never” is a very long time to make a bet when there is not something in physics or thermodynamics that say we can’t. Even then I would be cautious, the universe is kinda loose in the joints, almost accommodating, and there are a lot of really weird, “impossible”, things emerging from quantum mechanics these days.

          I predict that the following discoveries:
          1) A strong AI requires quantum computing,
          2) Quantum computing turns out to be a lot cheaper and more ubiquitous that previously imagined.
          3) Brains are found to be one of the more toturous and involved ways of accessing quantum computing.

          All three will happen sooner than “never”. :).

      • kevin
        Aug 1, 2017 at 10:29 pm

        @mvojy,
        My take on this is that the traditional car companies themselves are under enough pressure themselves. It is unlikely that they will want to takeover Hertz/Enterprise or some other rental car companies and put more lead into the already heavy albatross hanging around their necks.

        Why would a traditional car manufacturer buy over these rental fleets, when they themselves are having overflowing inventory of brand new petrol-driven cars? lol.

        It will be somewhat like a traditional book publisher wanting to buy over second-hand/rental bookstores because of their “established” networks. It makes no economic sense, especially when you’re already seeing electronic books/media and online delivery mechanisms gaining greater market share in the foreseeable future.

        Yes, established networks (e.g. physical presence at airports) may have some attractions, but as with most things bricks-&-mortar now, these are easily disintermediated by much cheaper and more efficient ride-hailing/ride-sharing apps.

        Your statement “If no one is buying cars then…” is only half the story. Yes, most folks are not buying PETROL-driven cars, but are actually waiting for EVs to have sufficient support systems (e.g. charging networks, maintenance contracts etc.) in place for them to buy into. They will buy EVs when the adoption curves matures further.

        Even the oil majors are seeing the writing on the wall:

        http://www.telegraph.co.uk/business/2017/01/25/bp-braces-electric-car-revolution-oil-demand-growth-slows/

        http://www.nasdaq.com/article/interviewbp-in-talks-with-electric-carmakers-on-service-station-chargers-20170801-01142

        I tend to side with Wolf on the tech arguments on autonomous vehicles. I was coding ANNs (the early precursors to AIs) way back in the 90s for an IT company, and we all mistakenly thought this rudimentary technology will take another 50 years before we see any practical applications. How wrong we were. lol.

        Its here folks… AI-driven road vehicles are here to stay. The key components of autonomous vehicles have largely been solved. It doesn’t even matter if Tesla or Uber goes bankrupt, other companies will pick up the technology where they left off….and the tech will keep on improving until it gets far better reaction times and judgement, than human drivers even during emergencies.

        Your existing commercial airlines are for the most part already “autonomous” during cruise flight, and its a more complicated 3D system at much higher speeds. Actually, even the take-off and landing sequences have already been automated by the US airforce, but of course, we still like to have a human “figurehead” at the helm just to reduce our overall nervousness.

        If you still doubt AI capabilities, read this below:
        https://www.engadget.com/2016/06/28/combat-ai-beats-air-force-experts/

        If AI can handle combat, it can handle any vehicular emergency, absent all the adrenaline and be more effective (ironically at both killing and saving humans).

        Do NOT ever underestimate the speed of tech advances and AI. I learnt it myself in the trenches and from this famous “insider” quote:

        “I think there is a world market for maybe five computers.” – Thomas Watson, President of IBM, 1943.

        Side note: I therefore, side with Elon Musk’s prognostications on the dangers of AI, more so than the Sunny-side up cool-aid of Mark Zuckee during their recent shade throwing on Twitter:

        https://www.theverge.com/2017/7/25/16024444/ai-safety-threat-elon-musk-mark-zuckerberg

  9. Wilbur58
    Aug 1, 2017 at 9:19 am

    Wolf,

    How is National doing?

    I have to say, I’m personally a big fan of their Emerald Aisle program. You get to the airport, go out to the aisle, pick whatever car you want, head to the gate, car gets scanned, and you’re off. It’s seriously convenient and a good product.

    Returning the car is just as fast.

    I assume that all the car rental companies are hurting. But I’m curious if some are doing better than others.

    • Aug 1, 2017 at 10:26 am

      National is owned by Enterprise Holdings, which is privately held (by the Taylor family). It’s not a publicly traded company, and not much data is floating around, and I don’t have operational or financial data on it. So I cannot answer your question.

      Some of this data may be out there somewhere. Maybe some of our readers know where to look?

  10. Kreditanstalt
    Aug 1, 2017 at 10:17 am

    If the entire profitability if the rental/lease/taxi/rideshare sector is so utterly dependent solely on the behaviour of “business travelers” on “expense accounts”, what does that say about the viability of their business model?

    And what too does it say about the financial state of the rest of us?

    • chip Javert
      Aug 1, 2017 at 6:34 pm

      It says business travelers, with generally tighter time and deliverable constraints (but reduced cost constraints) are probably better customers than others.

      What it says about the financial state of the rest of us is we either have the luxury of, or are forced to, use less expensive travel (bus as opposed to cab).

      When I traveled to London for business, I took cabs from Heathrow to London (about 100 pounds); as a retired old goat, I take the tube (about 5 pounds).

  11. Captain KurtZ
    Aug 1, 2017 at 12:18 pm

    Snow, or rather Snowfall, will defeat AI and all the attempts to go for full automation on vehicles.

    See, my Dad’s company was a trailblazer in laser technology back in the 80’s and they were tasked by the STAR WARS guys at the Pentagon to come up with a laser-targetting system to shoot down Soviet ICBMs. As the technology matured, the Russians got wind of this development and came up with a cheap countermeasure. They would hit the targeting area with an explosion of aluminum strips that would refract and deflect the laser so many times, it would prove useless.

    Right now, lane lines are one of the big ways for the AI cars to figure out which direction the car should go. If they are obscured, then….. by snow of all things.

    Now do a blizzard! We could have your 63 car pile ups, just like we do in bad conditions, with humans driving too fast.

    Remember. most of the sensors on these cars are laser based.

    • Aug 1, 2017 at 1:22 pm

      Snow and snowfall defeat human drivers. Just look at the traffic accident statistics and the blocked highways in Atlanta and elsewhere when it snows. Equipment – the combination of Lidar, radar, cameras, and other sensing technologies – can “see” a lot better under adverse conditions than human eyesight.

      Humans go blind in snowstorms and when it gets dark.

      Self-driving cars only have to be better than human drivers. Last year, 40,200 people died in accidents in the US involving motor vehicles driven by humans. This is how bad human drivers are.

      http://www.nsc.org/NewsDocuments/2017/12-month-estimates.pdf

      • Maximus Minimus
        Aug 1, 2017 at 2:43 pm

        And in all those incidents, the driver was more or less liable. However, I like the idea of having a few beers, slumping on the back seat, and having the car drive me home scot free. I imagine even waving at the cops as I drive by. In time, they will all be unemployed.

      • Captain KurtZ
        Aug 1, 2017 at 5:41 pm

        Wolf,

        I think that was part of my point, that what we are trying to create might be attainable, but at what expense.

        Are we gonna have cars with 100k worth of hardware just to be about as good as humans. One of the reasons Tesla cars are money losers right now is that automated driving, at HIGH rates of speed, is a bigger nut to crack than they thought.

        If you are puttering around the neighborhood after a few too many and you want to go 25mph in clear conditions, then that’s fine. But the Mad Max-like stuff on American exurban roads, where people are trying to make a two hour drive in 75 mins, we are still gonna have carnage.

        Speed is not our friend. In Eastern cultures, speed is a form of violence.

        We are the most violent people on the face of the planet.

      • d
        Aug 2, 2017 at 2:30 am

        Humans have always died traveling.

        What worries me about this nobody in control tech is that they are trying to rush it in to super sized marine cargo carriers.just tom save some labour costs.

        The ecological catastrophes that will ensue from this are horrifying to consider.

    • chris Hauser
      Aug 1, 2017 at 11:02 pm

      imagine playing chicken with a robot car, or swerving at it unexpectedly. fun.

      motivation? unemployment.

  12. Thunderstruck
    Aug 1, 2017 at 12:36 pm

    So, if the rental car agencies all fail, where are we gonna get our supply of good used off-lease cars from?

    • Frederick
      Aug 1, 2017 at 3:15 pm

      Why would anyone in their right mind want a car that was rented out to thousands of different drivers and most certainly abused on a regular basis Talk about asking for trouble

      • chip javert
        Aug 1, 2017 at 6:44 pm

        Because it cost less than a new one.

  13. AGXIIK
    Aug 1, 2017 at 3:14 pm

    The three biggest lies

    The check is in the mail (Not)
    I will respect you in the morning (Nope-don’t respect you now)
    This won’t Hertz a bit (Nope, it’ll hurt like an MF’er)
    Caveat Dumpster

  14. Frederick
    Aug 1, 2017 at 3:16 pm

    On another note I was at the 70 th anniversary celebration of the Warsaw uprising today in very uncharacteristic 95 degree Fahrenheit weather Big crowd though

  15. WorldBLee
    Aug 1, 2017 at 5:30 pm

    Relating an anecdote since I recently rented a car at Hertz to drive an injured parent who didn’t want to spend 8 hours in my small Honda. This has nothing to do with their financial sleight of hand but is my experience dealing with them.

    * The car I reserved was not delivered and I ended up with a Chevy Malibu (which I had no interest in driving)
    * The car was very old for a rental car, possibly indicating the bind rental cars are in by not being able to sell their used cars at a good price
    * This didn’t affect me, but it was pointed out at the counter that Hertz no longer accepts debit cards. The person next to me had rented using a debit card in the past and had to go through a lot of hassles (including making a new reservation) to get her car.
    * Service was sloooow and dropping the car off at a one-way destination was a little confusing (although it turned out to be super easy to drop the car off at a hotel in Portland). It took about an hour to get out of there with a car while having a guaranteed reservation coming in.
    * The price was high for a mediocre car – $418 for 3 nights with pickup Friday night and dropoff Monday morning

    I never rent cars normally–and will return to not renting them again outside of dire emergencies. This was through a small airport rather than a large operation but didn’t scream “business that is here to stay.”

  16. chris Hauser
    Aug 1, 2017 at 11:04 pm

    not to mention the algorithm driven pricing.

    do you suppose those video gambling machines taught them?

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