February 12, 2007

Hertz

And the man behind the brand is...
John Hertz

John Hertz left his fingerprints on nearly every facet of the early transportation industry. He started car agencies and cab companies and bus factories but the one thing he didn’t create is the business that will carry his name into the next century - Hertz Rent-A-Car.

The pioneer of auto renting was Walter Jacobs who in September of 1918,
at the age of 22, opened a car rental operation in Chicago. Starting with a dozen Model-T Fords, which he repaired and repainted himself, Jacobs expanded his operations to the point where, within five years, the business generated annual revenues of about $1 million. At this point he sold out to John Hertz who called the concern Hertz Drive-Ur-Self System.

Hertz had been in the business world since 1890 when he ran away from home at the age of 11. He ran copy for the Chicago Morning News and peddled papers for extra cash. His take each week approached $3, more than enough to cover his room and board. After a year his father, who had brought the family to Chicago from Austria six years earlier, found John and forced him to come home.
He lasted six more months and then left home for good. He was 13.

He worked long nights at the paper but the strange hours caused his health to break. Only 15, a doctor told Hertz to get out during the day and rebuild his constitution. He landed a job driving a delivery wagon and spent nights in a gym boxing, building up a respectable record against local opposition.

Hertz rejoined the journalistic world as a sportswriter for the Chicago Record but when the paper merged all the writers were fired. Hertz drifted into boxing management and developed two potential champions: Benny Yanger and Jack O’Keefe. Hertz soon had $10,000 from his boxing stable, a considerable accomplishment for the day. But his girlfriend didn’t approve of the shady boxing business and, despite its lucrative charms, Hertz left the fight game.

Through an acquaintance Hertz became a salesman for the newest novelty in Chicago: the horseless carriage. Sales were slow the first year and Hertz earned only $900. The he sold service along with the car - John Hertz was available night and day to help you with any car you bought from him. His commissions jumped to $12,000 his second year.

He quit to buy a quarter-share of a French car agency for $2000.
The horseless carriage was catching on quickly and sales topped $500,000 the first year. In 1910 his old friends at the Chicago Athletic Association contacted Hertz to operate a private cab service for its members and guests. Hertz used two of his own fleet and 8 borrowed cars to forge his infant taxi business.

Intrigued by the potential of taxis Hertz went to Europe to study the French taxi system. What he saw opened his eyes. The French utilized small, economical cars stripped of luxuries as cabs, unlike their American counterparts who typically pressed leftover touring cars into service. Cab companies linked their fortunes to local hotels, In America there were no such concessions.

But most importantly in France people simply hailed passing cabs from the curb. Int he United States passengers needed to phone for a pick-up because all taxis looked different. There were countless incidents of people piling into private cars. Hertz immediately realized he needed distinctive, standardized cabs, recognizable from a mile away. He painted his cabs yellow which he thought was easily spotted day or night.

The Yellow Cab Company, thirty cabs strong, picked up its first passengers on August 2, 1915. Hertz built short, sturdy highly maneuverable cars designed to go 300,000 miles or more. It wasn’t long before cities across the country were ordering similar cabs from Hertz. He installed receipt meters, heaters, interior lights.

With his cab business booming Hertz turned his attention to buses.
He engineered a merger with the Chicago Motor Coach Company and built sleek new buses as the Yellow Coach Manufacturing Company. A year later he added the rental car business to his transportation dynasty, establishing the first coast-to-coast network by 1925.

In 1925 the Yellow Cab Manufacturing Company was merged with General Motors in a $16,000,000 deal by which Yellow Cab was tabbed to build the corporations trucks. Hertz Drive Ur-Self was included in the merger, to remain a part of General Motors until 1953. John Hertz became Chairman of the board of the Yellow Truck and Coach Manufacturing Company.

Approaching 50, Hertz loosened his ties to the transportation industry.
He became a partner in Lehman Brothers in 1934, a position he would hold with the investment banking firm until his death some thirty years later.
Away from the office Hertz built one of America’s most renowned
racing stables featuring the fabled 1943 Triple Crown winner, Count Fleet.

When finally felled by ailing health in 1961, after more than 70 years in business, the Hertz Corporation operated more than 1700 drive-yourself stations in 1,000 cities and forty-six foreign countries.

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