Rental Car Oligopoly Increasing Profitability at Consumers’ Expense
Each of the big three rental chains (Avis Budget Group, Enterprise and Hertz Global Holdings) has been able to raise prices, thanks to the consolidation of an industry that they now collectively control 98% of.
- In 2013 Hertz swallowed Dollar Thrifty in a $2.3 billion deal that drew the attention of antitrust regulators in the Federal Trade Commission. Despite concerns about reduced competitiveness in the industry, the deal was allowed to go forward after Hertz agreed to spin off its Advantage sub-brand. Advantage lasted a mere four months on its own before going bankrupt.
- Avis has also scarfed up competitors. In 2011, the company acquired Payless Car Rental for $50 million, and a few months later bought out Zipcar for $500 million
- Enterprise bought Zimride, the predecessor company of Lyft in 2013
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