Auto Rental News

SEP-OCT 2013

Magazine for the professional car and truck rental industry.

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INDUSTRY NEWS AVIS BUDGET ACQUIRES PAYLESS FOR $50 MILLION AVIS BUDGET GROUP INC. ANNOUNCED July 15 that it acquired Payless Car Rental, the sixth largest car rental company in North America, for approximately $50 million in cash. The deal to buy Payless follows Avis Budget's acquisition of Zipcar earlier this year. Founded in 1971, Payless brings approximately 120 rental locations to Avis Budget Group's global network in the United States, Canada, Europe and South America, including many in major airport locations. Similar to Avis Budget Group, Payless operates with a hybrid model of corporately operated locations along with locations operated by licensees. Unlike the Avis Budget Group's premium Avis brand and mid-tier Budget brand, Payless focuses on the deep-value segment of car rental customers. Payless generates approximately $80 million in annual revenue, while Avis Budget Group posted approximately $5 billion in revenue in 2012. Avis Budget said it intends to operate Payless as a separate brand from a customer perspective, while realizing significant cost savings as a result of the transaction, primarily from lower vehicle depreciation, reduced fleet interest expense and administrative cost synergies. "Payless expands our global footprint, enables us to support Budget's mid-tier brand positioning, and gives us greater fexibility to capitalize on opportunities in an additional segment of the car rental market in order to help accelerate our growth," said Ronald L. Nelson, Avis Budget Group chairman and chief executive offcer. "At the same time, we expect this transaction to generate an attractive return on our investment." PUBLIC UTILITIES COMMISSION PROPOSES RULES FOR CAR-SHARING SERVICES THE CALIFORNIA PUBLIC UTILITIES COMMISSION (CPUC) proposed new regulations for online-based car-sharing services like Lyft, Sidecar and Uber. Using an online platform, these car-sharing companies provide transportation services by connecting passengers with drivers using their personal vehicles. According to the CPUC proposal, the new rules, which could become effective as soon as Sept. 5, would put these transportation network companies into a new transportation business category that's separate from taxicabs and limousine services. In order to operate in California, transportation network companies need to be licensed by the CPUC and every driver must go through a criminal background check, according to the proposal. In addition, each company is required to create Car-sharing service Lyft uses pink moustaches to distinguish its vehicles. a driver training program and apply a zero-tolerance policy on drugs and alcohol. "We couldn't be more pleased with this outcome and applaud the When it comes to insurance, transportation network companies will CPUC for moving in favor of transportation innovation and consumer need to maintain liability insurance policies that provide a minimum of choice," said Rachael King, national social media manager at Sidecar. $1 million per incident, says the proposal. This is stricter compared to a limousine's insurance requirements — a minimum coverage of $750,000 "… We hope cities around the country follow California's lead and champion innovation and sharing." with seven passengers or fewer. ENTERPRISE EXPANDS INTO POLAND AND CZECH REPUBLIC A s of July 16, Enterprise Rent-A-Car has selected new franchise partners in Poland and the Czech Republic that will serve major airport and city locations in these two European markets. HT Centrum Group Sp.z.o.o. has been appointed as Enterprise's franchise partner in Poland. As one of Poland's most respected automotive groups, it brings over 15 years of automotive experience in Eastern Europe through its dealerships, service 8 September/October 2013 center operations and car rental provision, according to Enterprise. Founded in 1993, Czechocar CZ Ltd. is Enterprise's franchise partner in the Czech Republic. According to Enterprise, Czechocar has established itself as a leader in the Czech car rental market. Peter A. Smith, vice president of global franchising at Enterprise, said: "These agreements further cement the Enterprise Rent-A-Car brand in Europe and place us in almost every large AUTO R ENTAL N EWS business and leisure travel market in Europe. This opens the door to a large volume of opportunities for our customers, our employees and our new franchise partners. Once again, in HT Centrum and Czechocar, we have identifed entrepreneurial businesses that share both our commitment to customer service and a vision to embrace the mobility needs of European travelers. We're delighted to welcome both companies and countries into the Enterprise family."

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