Reference Publications

Enterprise Rent-A-Car Company

International Directory of Company Histories, Volume 69 (1998) by Thomas Tucker, David Salamie

600 Corporate Park Drive St. Louis, Missouri 63105-4204 U.S.A. Telephone: (314) 512-5000 Fax: (314) 512-4706 Web site: http://www.enterprise.com

Private Company Incorporated: 1957 as Executive Leasing Company Employees: 57,300 Sales: $7.4 billion (2004 est.) NAIC: 532111 Passenger Car Rental; 532112 Passenger Car Leasing

Enterprise Rent-A-Car Company is the largest rental car company in North America. The firm has more than 5,400 offices in the United States; these offices are located within 15 miles of 90 percent of the U.S. population. More than 600 additional offices operate in Canada, the United Kingdom, Germany, and Ireland. Worldwide, Enterprise's rental fleet exceeds 700,000 vehicles, and its fleet services unit serving corporate clients includes an additional 135,000 vehicles. Largely avoiding the higher margin, highly competitive travel segment dominated by such companies as Hertz Corporation, Enterprise dominates the "local" segment of the automobile rental market, catering largely to those consumers who need to rent cars temporarily: to replace ones that have been stolen, have been in an accident, or are in need of a mechanical repair; or for a special occasion, such as a brief business or leisure trip; or to conduct business in-town. The replacement car niche tends to be resilient in times of recession, and its traditionally fragmented nature has allowed Enterprise plenty of room for growth. In addition to its rental car and fleet services businesses, Enterprise also has a car sales unit and a nascent rental truck operation, the latter largely offering trucks for replacement and supplemental purposes to commercial businesses.

Finding a Successful Rental Niche

Enterprise was founded in 1957 by Jack Crawford Taylor. An unlikely candidate to father such an ambitious company, Taylor had struggled to finish high school and drifted through two colleges in one year. During World War II he served in the U.S. Navy, becoming a fighter pilot in the Pacific and eventually witnessing the loss of one-third of his squadron. When he returned home he found enjoyable work and financial security as a Cadillac salesman for a dealership owned by Arthur Lindburg in St. Louis, Missouri. But before long he discovered that he had a desire to be an entrepreneur. Like Taylor the fighter pilot, Taylor the businessman enjoyed a little risk.

In his position at Lindburg's dealership, Taylor occasionally came into contact with Cadillacs leased out of Chicago by a Greyhound subsidiary. Struck by the apparent ease and convenience of leasing an automobile, he investigated the business, and found that the numbers looked promising. Taylor persuaded his boss to set up a leasing business, taking a 50 percent pay cut for a 25 percent share in the new business known as Executive Leasing Company. In a walled-off section of a body shop at one of Arthur Lindburg's Cadillac dealerships in St. Louis, the company that would later be called Enterprise was born, with a fleet of seven vehicles.

The company initially focused on long-term leasing, but Taylor began to examine the potential for car rentals, entering this field in 1962. At first the short-term rental business seemed more of a nuisance than a profitable business, but Taylor handed operations over to an energetic assistant, Don Holtzman, to see what he could do. Taylor asked how many cars would be needed to get started; Holtzman replied 17, a number that remains a mystery to Taylor. Holtzman took his 17 cars and, realizing that the small company was no match for Hertz and Avis, looked for a niche away from the airports to settle into. He soon discovered that insurance adjusters had a need for rental cars for clients whose cars had been damaged or stolen, and Enterprise directed its efforts at this market, offering more competitive rates than the bigger rental companies. After Holtzman left the company in 1965, Taylor nurtured this "home city" segment.

Branching Out in the 1970s As Enterprise

The energy crisis of 1974 hampered rent-a-car expansion for a short period. Although Enterprise continued to show a profit, the difficult economic conditions inspired the company to diversify. The purchase of Keefe Coffee Company, which provided in-room coffee service to hotel guest rooms, started what became Enterprise Capital Group, which expanded through acquisitions during the 1970s. The next acquisition was Monogramme Confections, a candy maker selling hotels and businesses candies with customized wrappers bearing their own logo. Other additions to the Non-Automotive Group included another coffee service, Courtesy Coffee, and Crawford Supply, a service provider to correctional facilities.

A key ingredient of Enterprise's success in all business segments was its emphasis on customer service. The "Customer Giveaway Account" was set up to allow any Enterprise Rent-A-Car employee to charge off items up to a certain limit in order to satisfy a customer. A motivated workforce was crucial to the operation, and Enterprise instituted a variety of bonus plans that provided incentives to everyone from assistant branch managers on up. Customer service was further enhanced in 1980 with the opening of the National Reservation Center, which enabled customers to call a toll-free number to rent Enterprise vehicles nationwide.