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The Story of Hertz Going Bust

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Re: The Story of Hertz Going Bust

#111

Post by chadash »

microtherion wrote: post #106
chadash wrote: post #60

Earlier quoted context omitted.

> As for the article blaming their fleet for sticking with sedans for too long, to me as a European traveler, this is a feature. One time, I rented from a different company, which "generously" stuck me with some monster SUV, and I mostly hated the experience. I also like sedans, particularly small ones that don't use much fuel. And all of the rental companies have sedans in their fleets. The issue is that they deprec…

Thanks for the explanation! This seems very plausible to me, but I wonder why that is so. I can understand trucks retaining their value, as there is a clientele who drives them for utilitarian reasons (though not necessarily the ones who buy them new). I can understand why luxury sedans devalue quickly, as they are bought for prestige. But it is not self evident to me why SUVs would have superior utilitarian value to…

There's nothing self-evident about it :)

Crude oil was going for $113/barrel in 2014 (which is likely around the time that Hertz made the decision to buy sedans) and then went down to less than half of that a year later. While the price has fluctuated since then, the prices have remained fairly low. Meanwhile, Americans like SUVs for reasons that I don't fully understand, but it's just a fact. And when gasoline is cheap, it doesn't cost that much more to buy one, so demand is high, and therefore resale prices go up (at least compared to sedans).

Re: The Story of Hertz Going Bust

#112

Post by compuguy »

SomeoneFromCA wrote: post #66
blaser-waffle wrote: post #63

Earlier quoted context omitted.

I believe the parent comment was talking about the shitshow that Hertz was, not Accenture.

Both are bad. Every big "consulting" company sucks nowadays.

Accenture tops the list though. I've worked with other consulting companies that are better compared to them.

Re: The Story of Hertz Going Bust

#113

Post by ashtonkem »

robohoe wrote: post #92
ashtonkem wrote: post #51

I think the most “duhhh” moment was moving the headquarters. Of course they lost a ton of experienced and qualified staff when they moved the headquarters to Florida. Why wasn’t this seen coming?

I don't want to reply with a blanket statement, but a lot of the times senior management just doesn't understand how much work it takes to build complex IT systems and how a great team can make it happen. They see IT as disposable and expect anybody with some computer skills to be able to do complex work.

That makes sense for IT networks, annoying as it may be. But the article makes it clear they lost quality leaders as well, and the CEO should have fully understood and appreciated the impact that would have.

Re: The Story of Hertz Going Bust

#114

Post by wdb »

thoughtpalette wrote: post #52
stevetursi wrote: post #43

I am Hertz Alumni, 2011-2016. We had a great group of engineers and product people, many of us far too talented to be in company like what hertz turned into. We were under the leadership of an incredible division head and most of the folks in our group felt a deep sense of loyalty to her. Nearly all of us, including that division head, are gone now, mostly laid off. If you poll any random Hertz alumnus, the story you…

I had the unfortunate opportunity as an Accenture consultant to work on the Hertz redesign. It was a shit show and hands down the worst project I've ever been on. I left Accenture but not sure how much I'm allowed to talk about it. Needless to say, leadership across ALL disciplines (mobile, front-end, backend, etc) was a fucking joke and they didn't listen to the red flags we brought up in literal sprint 1. Sorry to…

My experience with Accenture is that you start with two blokes from Accenture in your team as fellow consultants and before you know there are 10 Accenture people without knowing what they are doing. On some projects I worked with them you had test teams in Manilla which just didn't do anything so you ended up doing all testing too.

Re: The Story of Hertz Going Bust

#115

Post by PacketPaul »

rb808 wrote: post #76

Honestly this is a good thing. There are too many big companies, not enough small, we need more to fail - esp the type that have gone through lots of mergers to reduce competition.

Have you ever rented a car from a small company? The entire process sucks. Yea it is ok if it is a once a year vacation. But for a business trip it is such a waste of time.

Re: The Story of Hertz Going Bust

#116

Post by tgsovlerkhgsel »

puranjay wrote: post #105
rb808 wrote: post #76

Honestly this is a good thing. There are too many big companies, not enough small, we need more to fail - esp the type that have gone through lots of mergers to reduce competition.

While I agree with the sentiment, operating at scale does mean that consumers often get lower costs. Smaller players would also be far less likely to enter less lucrative markets.

Often, but not always - sometimes the benefits of scale are eaten up by an oligopoly gouging customers. In New Zealand, the big rental companies were much much more expensive than small local companies that were hard to find because they didn't show up on the international aggregators.

And unlike the big companies, there were no hidden costs, no upsells, no attempts to scam, no attempts to extort huge fees when trying to change the rental, ... didn't even charge us for forwarding a traffic ticket which would have totally been their right.

After my experience with Hertz (US) as a customer, the only reason why I'm not 100% happy with them going under is that I don't expect their large competitors to be much better, and less competition means the others can become even worse.

Re: The Story of Hertz Going Bust

#117

Post by namdnay »

ipnon wrote: post #89
namdnay wrote: post #47

Earlier quoted context omitted.

You only hear about LBOs that fail. There are dozens that work every year

Do you know of any data referring to the success to failure ratio of leveraged buyouts?

The easiest way to do this is to look at the performance of LBO funds. It's up and down, returns are pretty poor compared to the stock market, but still positive, so that means they're getting back more cash than they are putting in - which means more success than failure, especially as success means +20 to +40% whereas fail means -80 or -90%

Re: The Story of Hertz Going Bust

#118

Post by Koolaboola »

eru wrote: post #7
wolco wrote: post #2

In the end Kathryn Marinello failed. She was at the helm for years where she could have positioned the company better. Blaming it on a 2014 misfilling and the wasted years cleaning it up only gives false cover. She didn't pay back debit when times were better because it would have affected her compension.

Why do you say Kathryn Marinello failed? Compensation incentives are there for a reason. Acting according to them just means fulfilling the shareholders wishes. (Unless the shareholders are idiots or impotent and the board set the wrong incentives.) Running a riskier strategy that fails under a pandemic is a perfectly cromulent business decision to make. Shareholders and creditors knew what they were in for. Not all…

[flagged]

Re: The Story of Hertz Going Bust

#119

Post by eru »

Tyrek wrote: post #87
eru wrote: post #11

Earlier quoted context omitted.

Yes, exactly. Though it's not just odds and payoff, but also risk appetite. There's something like risk-aversion, and a corresponding risk-return-tradeoff. But unless we have evidence to the contrary, we can assume that the shareholders are broadly risk-neutral. Especially since lots of shareholding these days is via widely diversified index funds, who don't need to care whether a any single company they hold goes ba…

absolutely not. If shareholders were risk neutral, they'd be buying bonds, or holding cash. "passive" investment is wholly built upon the concept that "passive" investment outpaces active investment - the very fact that you're in the equity markets suggests you are chasing the 6-8%+ annualized returns (and associated risks) from equity investments. Passive is a replacement for stock picking, and while more conservati…

> If shareholders were risk neutral, they'd be buying bonds, or holding cash.

Huh?

Many people hold both bonds and stocks and other assets, like real estate.

Index funds give you broad diversification at low fees. That diversification mostly removes out company-specific idiosyncratic risk, but it still leaves you exposed to market risk, and no one in their right mind claims otherwise.

Even a risk averse person (and even more a risk neutral person) can rationally hold on to very risky assets. Risk aversion just means that you require a higher return for a given level of risk.

And a risk neutral person doesn't care at all about risk, they only care about expected returns. That's mostly a convenient abstraction like the famous home economicus.

I don't understand why a risk neutral person would want to prefer bonds and cash?

Re: The Story of Hertz Going Bust

#120

Post by decafninja »

rconti wrote: post #95
namdnay wrote: post #46

Earlier quoted context omitted.

I can’t remember if I’ve ever seen Sixt in North America? They’re definitely one step above the rest here in Europe

They're a step above in the US as well. I rent from them whenever possible. Their vehicle selection is relatively small, they have few outlets, and I can't say they have the best (or most uniform) service. But they're the only agency that actually rents cars I have any desire to drive. I got a brand new full-size Volvo S90 sedan for what all the other agencies charge for a janky Corolla or something. And this wasn't…

Rented a Jaguar F-Type from Sixt during a trip to Miami. Service was great, car was awesome, and I paid around the same I would have for a 4cylinder Mustang from somewhere else.
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