Renting Adventure

December 7, 2015

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By Matt Wolfe

Warren Avis always had a strong for desire adventure and independence. A quintessential entrepreneur, Avis relentlessly opened and grew businesses throughout his career, but his most profitable venture was his entry into the rental car business. Avis formulated his unique concept for a rental car business while he was in the military. A combat pilot for the Air Force during WWII, Avis was constantly frustrated by the lack of good ground transportation everywhere he went. Avis wrote of his frustration in his autobiography; “After we landed, we’d often have to take a taxi to a town that might be fifty miles away. Sometimes we even carried motorcycles in the bomb bays of our planes so that we’d be able to get around after we landed!”

Avis saw a remarkable opportunity for a successful business by establishing rental car agencies at airports. Though rental counters at an airport are a common fixture today, this was not the case in the late 1940’s. Most rental agencies were located in major cities far away from any airport, and many rentals came from back alley repair shops that loaned out old jalopies held together with rust and hope. “In those days”, Avis remembered, “if you got a rental car, you had to rent a taxi and go to a crummy rental car station with greasy floors and mechanics…Then if you used the car for the day you’d have to take it back and then get a taxi back to the airport. It was just impossible!”

Avis realized that if he put rental counters at the airports, he would enable travelers to do in one day what would usually take them two. Despite the now obvious advantages of this tactic, Avis met considerable resistance. “Most people I approached for help or advice said it simply wouldn’t work.” They argued that he could not control the system, that there would not be enough demand, and that costs were too high. “You name it, the Naysayers threw it at me”, Avis said, but he was sure his idea would work. Avis established the first airport rental counter at Willow Run Airport in Ypsilanti Michigan. “I chose the Detroit Airport because I had lived there for many years and knew the area like the back of my hand.”

Another Avis acumen was his use of new cars rather than the rent-a-wrecks that traditionally made up loaner fleets. Prior to establishing Avis Rent-A-Car, Avis had built a highly successful Ford dealership through which he decided to annually buy new cars for his rental business. Avis’ decision was beneficial for himself, the manufacturer, and the renters. The renters would be essentially “test riding” a new Ford (a proposition Ford representatives were receptive to), and would be less likely to have breakdowns than if they were renting an old beater. Further, Avis had calculated that if he bought new cars at wholesale prices, used them for six months, then sold them through his dealer on the used market, he would actually make a profit because of the high demand for cars and the Federal government’s control over new car prices.

Warren Avis sold his rental car company in 1954 for $8 million after growing it to become the second-largest rental company. Avis would always consider his car rental business to be one of his “supreme mountaintop achievements”. “That was a time of high adventure that carried me to an entrepreneurial peak. At the same time, more important principles emerged from the experience that have stuck with me ever since.

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