The History of the Car Rental Industry in the USA



Nowadays everybody around the world freely uses the services of car rental companies. People hire cars whenever they need them, whether they need to travel around countries while choosing their routes or rent a fancy car to celebrate some event.
Before the rise of fascinating opportunities to hire high-end automobiles anywhere in the world, car rental industry has gone through many ups and downs. The US car rental industry has come through many significant historical events till it became a multi-billion-dollar industry. That’s why we are going to plunge into the important historical events of the USA car rental industry development. 

Early Beginnings

According to different web resources and historical articles, we can trace the beginning of the car rental industry development back to the XX century. Back then, automobiles were a brand-new thing. An aspiring entrepreneur Joe Saunders decided to try his luck and start the 1st car rental business, while there were no other competitors in 1904. He came up with the idea to name it “Saunders Drive-It-Yourself System”. In the early beginnings, there were only a dozen cars he could offer his clients. The first clients were adventurers as well as ordinary people who wanted to explore automobiles. 
The start wasn’t successful since cars were quite costly. Only those who could afford them took advantage of such a service. The period after the WWI gave car rental industry a push since it became possible to rent military automobiles.  

Growth and Expansion

In the twenties of the 20th century, there was significant growth in the industry in the States. It was the time when today’s popular companies like Hertz and Avis entered the market. These companies started offering customers quite affordable rental prices and nice customer service. Thanks to the founder of Hertz, there appeared a service of hiring cars at airports. 
Ten years of the Great Depression didn’t have mercy on car rental businesses. However, those who managed to adapt and introduce flexible business models, survived. During this period, car rentals focused mostly on long-term rentals and business clients. That helped them achieve a steady stream of revenue. 

Post-World War II Boom

When the atrocities of WWII ended, a great number of individuals started to travel. This became a turning point for the industry. Although more people began to buy vehicles, there was a growing number of car rental clients both pleasure and business travelers. 
Mid 20th century brought innovations to the car rental industry. US car rental business implemented a reservation system as well as introduced loyalty programs. Many companies invested in expanding their fleets. That’s how they were able to target a bigger audience. 

Development of the car rental industry outside of the US

After the war, the industry underwent a transformative evolution in many different countries. In Europe recovering nations started to understand the convenience of cars for hire for local exploration and cross-border travel.
The story in the UAE is one of rapid modernization and urban development. As this region grew from a nomadic lifestyle to a thriving region of commerce and tourism, the industry played a significant role in facilitating the lives of residents and tourists. Moreover, this country has become a dream destination for those who wish to rent fancy cars. Nowadays, people come here to rent Ferrari Dubai and other sports and premium cars. 
The evolution of the car rental industry after World War II reflects not only technological advancements but also the dynamic socio-economic shifts that defined the post-war era in diverse global contexts.

The 1970s to the Present

There were great business challenges for companies in the 1970s. New companies started to enter the market, that’s why fierce competition was the thing. Besides, some economic downturns and rising fuel prices made it pretty hard for car rental businesses to survive. 
However, those who continued to adapt and invest in innovations managed through those hard times. The innovations that brought the industry to a new level were the following: 

  1. Rental car insurance; 
  2. Roadside assistance; 
  3. A growing number of convenient drop-off locations. 

Later and to this day, tech innovations open a bunch of opportunities for companies to grow the number of their services and clients. One can only imagine what would be possible shortly. Although the competition grows, entrepreneurs implement tech innovations and develop new services to give more flexibility and cost-effective options to their customers. 


As with any other industry, the car rental industry faced tons of challenges in the beginning in the US. Joe Saunders was the first to offer people car rentals in the USA. Then worldwide-known companies like Hertz and Avis got on the way and started to bring innovations to the industry. Although companies continue to face challenges nowadays, they quickly adapt and bring new tech developments to the car rental business.