Tag Archives: Hertz

Business

Hertz to pay $168 million to settle lawsuits over false arrests

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Hertz said Monday it will pay $168 million to settle hundreds of claims by customers who were falsely reported by the rental car company as having stolen its vehicles, with some innocent renters arrested and jailed for weeks or months over the reports.

Hertz said in a brief statement that it was settling 364 claims, which it said amounted to 95 percent of the outstanding claims against the company over the false theft reports.

Dozens of customers had shared stories on social media and broadcast television programs of being arrested, “swatted” or stopped at border crossings after Hertz had incorrectly reported them to the authorities for stealing vehicles from its rental fleet.

Hertz claims thousands of renters steal cars. Customers argue they’ve been falsely accused.

In many of the cases, the customer had paid for and properly returned the car weeks or months prior — or had never rented a car at all.

Drew Seaser, a real estate appraiser in Colorado, learned of a warrant for his arrest in Georgia when he was stopped at the airport on the way to Mexico with his family. Seaser told CBS News that he had never been to Georgia nor rented a car from Hertz. He was jailed for more than 24 hours; the charges were dismissed after his lawyer provided prosecutors with an alibi.

Paul-Anthony Knight said on “Inside Edition” that he was arrested after Hertz incorrectly filed a theft report against him. “All guns drawn on me. I was thrown to the ground. I was arrested. And I was locked up for over a week,” he said. Another man, Julius Burnside, told the program that he was jailed for more than six months over an erroneous report.

It was not immediately clear whether Seaser, Knight and Burnside were among the claimants who settled with Hertz, which emerged from bankruptcy in 2021. An attorney for dozens of customers who sued Hertz in Delaware did not immediately respond to a request for comment.

Hertz said in February that “the vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date.”

But Hertz chief executive Stephen M. Scherr was more apologetic, saying in April on CNBC’s “Squawk Box” that “it’s not acceptable to Hertz to have any customer, a single customer sort of caught up in some of what’s happened.” He said the issue of false theft reports was “among the first things” he dealt with since taking the helm of the company in February. “Several hundred people” were impacted by the reports, he said.

Erroneous reports were withdrawn when they were discovered, Scherr said, “yet these people got caught, you know, in a moment” when the rescinding of the reports “wasn’t recognized” by law enforcement. The false reports were “unfortunate,” he said.

Marisa Iati contributed to this report.

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Business

GM to sell up to 175,000 electric vehicles to Hertz through 2027

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2024 Chevrolet Blazer SS EV

GM

General Motors has agreed to sell up to 175,000 electric vehicles to Hertz Global over the next five years, the companies announced Tuesday.

The deal calls for GM to start supplying electric vehicles such as the Chevrolet Bolt EV and Bolt EUV to the rental car giant starting the first quarter of next year. Those vehicles are expected to be followed by newer EV models on the company’s Ultium battery technology, such as the Chevrolet Blazer, Chevrolet Equinox and vehicles from GM’s other brands.

GM is expected to significantly increase its production of all-electric vehicles in the coming years, as North American output of the cars and trucks — as well as the battery cells used to power them — increases. The company plans to reach production capability of 1 million EVs in North America and China, each, by 2025.

GM is the latest automaker to strike such an agreement with Hertz following Tesla and Polestar, a Volvo-backed electric vehicle startup. Those agreements were for 100,000 and 65,000 vehicles, respectively, making GM’s deal the largest of the three.

“Our work with Hertz is a huge step forward for emissions reduction and EV adoption that will help create thousands of new EV customers for GM,” CEO Mary Barra said in a statement.

Hertz has made increasing its fleet of electric vehicles a priority following its emergence from bankruptcy less than a year ago. The debt-laden company was an early victim of the coronavirus pandemic but has since recovered amid surging demand in travel and supply chain issues. The problems have resulted in lower inventories but higher profits for rental car fleets.

Shares of GM and Hertz were relatively unimpacted by the announcement. Both were down midday Tuesday amid a broader market decline.

Investors have traditionally frowned upon automakers when they sell large amounts of vehicles to daily rental fleets. That’s because cars and trucks sold to rental companies are usually sold at a discount, with such deals used to reduce bloating inventories and increase their total vehicle deliveries.

However, shareholders and analysts have responded favorably to automakers such as Tesla selling EVs to Hertz, viewing the move as a sign that battery-electric cars were going more mainstream.

Hertz aims to have a quarter of its fleet be electric by the end of 2024, while GM has announced plans to exclusively offer electric vehicles by 2035.

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Business

Hertz false arrest lawsuit: 47 customers sue car rental company, claiming false arrests

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DELAWARE — Forty-seven Hertz customers have filed a lawsuit against the rental company that describes horror stories after they were allegedly falsely reported as having stolen its rental cars, and in some cases even jailed, CNN reported.

The plaintiffs allege being blind-sided by arrests – sometimes at gunpoint – and in some cases spending time in jail. Some plaintiffs describe losing their jobs in the fallout from the arrests.

The lawsuit alleges systematic flaws in Hertz’s reporting of thefts, including not recording rental extensions, falsely claiming customers haven’t paid, failing to track its own vehicle inventory and failing to correct false reports to police. The lawsuit was filed in Delaware Superior Court and comes on the heels of a court ruling that these cases could be pursued outside bankruptcy court. (Hertz had filed for bankruptcy in May 2020 before emerging in July 2021.)

Hertz said in a statement that it disagreed with the ruling allowing the cases to be pursued outside bankruptcy court, and that it’s committed “to do right by our customers.”

“We are reviewing and considering each claim brought against Hertz on its individual merits,” Hertz spokesman Jonathan Stern said. “We have begun extending settlement offers to dozens of claimants and will continue to do so on a case by case basis.”

SEE ALSO | Lawsuit claims Bank of America failed to warn customers they might get scammed using Zelle

Hertz CEO Stephen Scherr admitted in April that “several hundred people” were impacted by the company’s errors.

Some of the plaintiffs say they were using Hertz rentals to make a living driving for Uber or Lyft, or to transport their families. One plaintiff, Bianca DeLoach, described being swarmed by police with their guns drawn at a gas station in March 2021 while her children watched from inside the rental she’d paid for. The complaint says DeLoach spent nine nights in jail. Charges were dismissed months later.

Another plaintiff, Mary Lindsay Flannery, says she was in a car she’d rented from Hertz in 2020 when police pulled her over and told her that the vehicle was stolen. The car was impounded, the complaint alleges. Flannery was unable to get an explanation from Hertz despite repeated attempts. She was arrested weeks later, leaving her daughter alone without a parent because her father was deployed overseas, according to the complaint.

Flannery had three panic attacks while in jail, was physically attacked by cellmates and bitten by bed bugs, the complaint says.

The criminal case against Flannery was dismissed and she was released after 14 days.

James Tolen was driving a Hertz rental in Houston in December 2020 when he was pulled over and told to open his door, the complaint alleges.

“When he opened the door at least 4 officers had guns pointed at him. They made him raise his shirt, then they patted him down and cuffed him in the back of a squad car,” the complaint says. “It was humiliating and terrifying.”

Police later called Hertz and learned the car wasn’t stolen — Hertz had reported the car stolen months before renting it to Tolen’s then-partner, the complaint says.

RELATED | Lawsuit with 550 plaintiffs claims Uber failed to protect female riders from sexual assault

Reginald Brown, driving a car he’d rented from Hertz for Lyft, was jailed overnight and lost his full-time job while he was being prosecuted, the complaint says. The case against him was dismissed almost two years later, the complaint says.

Lyft and Uber did not immediately respond to requests for comment.

Darnay Taper spent two nights in jail last year after being pulled over in March 2021 by eight police cars while driving a Hertz rental and held at gunpoint, according to the complaint. Taper, who has heart disease, was denied access to his medication while in jail, the complaint says. The case against Taper was dismissed months later after Hertz didn’t show at a preliminary hearing, the complaint alleges.

(The-CNN-Wire & 2021 Cable News Network, Inc., a Time Warner Company. All rights reserved.)



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Technology

Hertz will rent you a Mustang with more than 900 horsepower

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The Mustang Shelby GT500-H — the H stands for Hertz — is a special-edition model produced by Shelby American specifically for Hertz’s rental fleet. It will not be cheap to rent or easy to find. Only 25 will be made, 19 in black and six in white. They will be available at Hertz locations in Fort Myers, Las Vegas, Miami, Orlando, Phoenix and Tampa at an average daily rate of $399 dollars a day. The first 75 tire-smoking miles are included, but you will be charged 75 cents per mile after that. Also, renters must be at least 25 years of age. The cars will be available for rent starting this summer, according to Shelby.

The cars, which feature gold racing stripes, are Ford Shelby GT-500s, which have then been additionally modified by Shelby American of Las Vegas. Apparently, the 760-horsepower supercharged V8 these cars have when they leave the Ford factory was considered insufficient for the demands of some Hertz rental customers. Among other changes, Shelby American puts on a larger supercharger to help produce the additional horsepower.

Shelby American is also producing a line of Mustang Shelby GT-H cars with 450 horsepower engines that are not supercharged. These cars, based on the Ford Mustang GT, will be available in both hard-top and convertible versions.

These cars are a sort of homage to the original 1966 Shelby GT350-H cars which were also made specifically for Hertz rental fleets. The Hertz Shelby program was renewed a few times in the early 2000s with more gold-striped cars. This is just the latest — and the most powerful — version.

Gary Patterson, president of Shelby American, said that when the idea to bring the program back again was raised, he talked to Hertz about what was possible in terms of power and performance.

“We said, ‘This where we can go if you want to go there,'” he said.

And a deal was struck for the full 900-plus horsepower option, he said.

In other forms of power, Hertz has also recently announced it is buying 100,000 Teslas and 65,000 Polestar electric cars. The car rental company emerged from bankruptcy last year.

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Technology

Hertz Will Let You Rent A 900 Horsepower Mustang

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Shelby GT500-H
Image: Hertz

Hertz and Shelby are working together again. To celebrate a partnership spanning over half a century, the two companies have teamed up on some all-new Shelby GT-H rental Mustangs. One of them has 900 horsepower. This might not be a good idea.

2006 Ford Shelby GT-H
Image: Ford

Hertz and Shelby started working together back in 1966 when 1,000 Mustang GT350s were sent to the rental company’s fleet. Finished in black with gold stripes, the cars were later sold to the public as Shelby GT-H models. The Shelby GT-H returned with the fifth-generation Mustang in 2006. Just 500 coupes and 500 convertibles were made between 2006 and 2007. All had the 319-horsepower 4.6-liter V8.

Shelby GT-H Convertible
Image: Hertz

Now, Hertz renters will get to choose between two flavors of Shelby Mustang. The “basic” version will be the GT-H, shown above, which has special paint and wheels but is otherwise no different from a run-of-the-mill Fun Collection Mustang—pretty much a stock GT with a performance exhaust system.

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Image: Hertz

You don’t want that one, though. The one you want is the bonkers GT500-H. Hertz started with the 760-hp Shelby GT500 and replaced the factory Roots-type supercharger with a 3.8-liter Whipple unit. A bigger throttle body, cold-air intake, and dual-pass intercoolers bring power output to 900 hp, a 140-hp increase over a standard GT500. Aluminum wheels with performance tires, tinted windows, special badging, and a carbon fiber hood make up the exterior changes. Nineteen of the GT500-Hs will have shadow black paint and six will be painted white. Hertz CEO Stephen Scherr says that “Hertz and Shelby American have created driving magic again.”

Except that magic might be tainted. Putting a 900-horsepower special edition muscle car in the hands of renters doesn’t seem like the soundest idea. At a time when Hertz is under intense scrutiny for allegedly having hundreds of customers arrested on bogus stolen-car charges, adding a high-power, extremely limited-edition muscle car to the mix is certainly an odd choice. The Shelby/Hertz partnership is expected to last three years, and the GT500-H will only be available at select airport locations.

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Business

Cramer’s lightning round: Hertz is worth buying

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Cedar Fair LP: “I like that one very much, you stay there [and don’t sell] … I think the stock goes much higher.”

Ciena Corp: “I don’t really care for CIEN, because I’ve got Cisco all the way down here at $55 [a share], and they just reported an unbelievable quarter. Why do we have go down to Ciena?”

Roblox: “It’s too low to sell … you’ve got to start making things and do stuff and make them money doing it, and return to shareholders. Now, the company does not do the latter two, and that’s why it will not go up very much.”

Hertz Global Holdings Inc.: “Smart money is dumb. They should be buying this thing. [Stephen] Scherr is the CEO. He used to be the Goldman CFO. He is dynamite and he’s going to come on the show. Now, he doesn’t know that, but he will.”

MP Materials Corp: “I think MP’s real. … They promised, they delivered, and it goes higher and I like them.”

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Business

Tesla Stock Is Dropping. Here’s What’s Really Behind the Slide.

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Tesla shares are dropping. Recalls and uncertainty could be responsible. A third reason, however, is most likely.


Joe Raedle/Getty Images

Text size


Tesla

stock can’t go up forever, and finally turned lower on Tuesday. Reports of recalls and uncertainty about the company’s deal with Hertz are two potential reasons, but a third factor may be the real key.

Tesla (ticker: TSLA) stock was down 1.6% in morning trading, following a slump of as much as 5% before the open. The


S&P 500
and


Dow Jones Industrial Average
were up 0.3% and 0.2%, respectively.

Tesla stock has been on a tear. It has risen eight of the past nine trading sessions, and has gained 70% over the past three months. Its shares have been buoyed by signs that the company really has won the EV race, signing a deal with Hertz (HTZ) for 100,000 electric vehicles. Companies such as


Ford

Motor (F) and


General Motors

(GM) have announced enormous spending plans to try to close the gap.

No surprise, then, that the stock would react badly to potentially negative headlines. First, Musk himself tweeted that Tesla had yet to sign a contract with


Hertz

(HTZZ). Then came the announcement that the company would be recalling 11,700 vehicles.

The Musk tweet, however, was intended as a positive. The Hertz deal is Tesla’s first large fleet sale. Fleet sales tend to be lower-margin. Fleet buyers look for volume discounts and don’t often buy all the high-end options individual consumers do.

Musk has assured investors, on


Twitter

(TWTR), a couple of times that Tesla is selling all the cars it can make and isn’t giving any discounts these days.

Hertz shares initially took a hit because of the tweet, starting off with a loss of about 6% in premarket trading. But nothing happens in a vacuum.

Hertz’s peer


Avis Budget

(CAR) reported better-than-expected results Monday evening, sending the stock up about 1% in premarket trading, despite year-to-date gains of about 360%. Rental-car demand and operating metrics are improving.

In late morning trading, it looked as if meme traders were squeezing short sellers, as they did with


GameStop

stock at the start of the year. Avis stock was up 162% to $450 a share, bringing Hertz is along for the ride with a gain of about 16%.

For Tesla stock, the recall might be a bigger deal than the status of the sale to Hertz. The cars are being recalled because of a software-communication error that can activate automatic emergency braking. The fix is an over-the-air software update. Tesla has faced more regulator scrutiny over driver-assistance features in recent months.

What’s more, Tesla recently introduced a “beta” version of its latest full-self-driving software to Tesla drivers who qualified for the upgrade. Tesla believes its software makes vehicles safer. Regulators, however, still need to adjust to cars being improved by software updates and how to handle changes made to software to fix bugs.

Any news, however, could have sparked a selloff in Tesla stock. The stock is extremely overbought, which is to say that it is rising quickly relative to its own history. When things get extreme, stocks can revert to the mean. Tesla’s relative strength reading is at 94. A reading of 50 is, essentially, normal and levels of above 70 generally have traders looking for a drop.

Coming into Tuesday, Tesla stock has outperformed the S&P 500 by about 77 percentage points over the past 100 days, as Datatrek Research pointed out in a Tuesday note. That’s a lot, but not unheard of for Tesla.

“Crazy as it sounds, the stock’s recent rally is pretty normal action for this name,” the research outfit said. With outperformance like that, investors don’t really need an excuse to take profits.

Tesla stock has a long way to go before it will look ripe for a hit.

Write to Ben Levisohn at ben.levisohn@barrons.com

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Business

Tesla Stock Is Dropping. Here’s What’s Really Behind the Slide.

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Text size


Joe Raedle/Getty Images


Tesla

stock can’t go up forever and shares are finally falling in premarket trading Tuesday. Reports of recalls and Hertz-deal uncertainties are two reasons the stock might be down. A third reason, however, might be more responsible for the decline than the other two.

Tesla (ticker: TSLA) stock is down about 4.3% in premarket trading.


S&P 500
and


Dow Jones Industrial Average
futures are both little changed.

Tesla stock has been on a massive tear. It’s up eight of the past nine trading sessions and has gained 70% over the last three months. Its shares have been buoyed by signs that the company really has won the EV race as it signed a deal with Hertz (HTZ) for 100,000 electric vehicles and companies like


Ford

(F) and


General Motors

(GM) announced massive spending plans to try to close the gap.

No surprise, then, that the stock would react badly to headlines. First, Musk himself tweeted that Tesla had yet to sign a contract with


Hertz

(HTZZ). Then came the announcement that the company would be recalling 11,700 vehicles.

The Musk tweet, however, was intended as a positive. The Hertz deal is Tesla’s first large fleet sale. Fleet sales tend to be lower margin. Fleet buyers look for volume discounts and don’t often buy all the high-end options individual consumers do. Musk has assured investors, on


Twitter

(TWTR), a couple of times that Tesla is volume constrained—selling all the cars it can make—and isn’t giving any discounts these days.

The recall might be a bigger deal. The cars are being recalled because of a software communication error that can activate automatic emergency braking. The fix is an over-the-air software update. Tesla has faced higher regulator scrutiny over driver assistance features in recent months.

What’s more, Tesla recently introduced a “beta” version of its latest full self-driving software to Tesla drivers who qualified for the upgrade. Tesla believes its software makes vehicles safer. Regulators, however, still need to adjust to cars being improved by software updates and how to handle changes made to software to fix bugs.

Any news, however, could have sparked a sell of it Tesla stock. The stock is extremely overbought. Overbought is a technical term that looks at how fast a stock is rising or falling relative to its own history. When things get extreme stocks can revert to the mean. Tesla’s relative strength reading is at 94. A reading of 50 is, essentially, normal and a reading above 70 is when traders start looking for a drop.

Coming into Tuesday, shares were up about 18% over the past five days. Investors don’t really need an excuse to take profits. Tesla stock has a long way to go before it really starts to take a hit.

Write to Ben Levisohn at ben.levisohn@barrons.com

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Business

Elon Musk puts a stop to Tesla’s (TSLA) rally, says Hertz deal is not signed and not a big deal

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Elon Musk has put a stop to Tesla’s (TSLA) historic rally by saying that the Hertz deal is “not signed” and adding that he doesn’t believe it has any effect on Tesla’s economics.

Tesla’s stock (TSLA) rallied more than 55% over the last month alone.

The bulk of the increase came after Hertz’s announcement that they ordered 100,000 Tesla vehicles, then partnered with Uber to provide 50,000 of them to their drivers with an option for 100,000 more.

It sent Tesla’s stock surge significantly.

It culminated in an 8% increase yesterday alone that saw Tesla’s valuation surging to $1.2 trillion.

However, this morning, Tesla’s rally has officially stopped with the stock being down 5% in pre-market trading.

The significant decline comes after a tweet from Elon Musk in the middle of the night.

A Twitter user thanked Musk for the stock price increase, and while the CEO responded by seemingly accepting credit at first with a “you’re welcome,” he quickly poured cold water on the rally by saying that the Hertz deal shouldn’t have this kind of impact:

The CEO said that “no contract has been signed” on the Hertz deal and it shouldn’t have a strong effect on Tesla’s economics since the company is production constrained:

“If any of this is based on Hertz, I’d like to emphasize that no contract has been signed yet. Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers. Hertz deal has zero effect on our economics.”

When the rally first started, Musk had already pointed out that it wouldn’t accelerate Tesla’s overall deliveries as the company is constrained by production, not demand.

Electrek‘s take

The first part of Musk’s comment is a bit concerning since Hertz made it clear that they “placed” an order with Tesla for 100,000 Model 3 vehicles.

They have already taken deliveries of some of them.

Since Hertz didn’t receive any specific discount for their order, it’s possible that they went through the regular ordering process and simply put a $100 deposit per car to claim that they “placed” the order, which might not constitute a “signed” deal.

As for the second part, it is technically true, but as we discussed on the Electrek podcast last week, I think the Hertz deal has several benefits for Tesla and the broader EV adoption beyond simply adding 100,000 vehicles to Tesla’s backlog.

Long term, once those vehicles are in operation both in Hertz and Uber’s fleets, it will help get more people to try electric cars and accelerate the market shift toward electric vehicles.

It’s also going to encourage other large fleet managers to think bigger when it comes to electrifying their fleets.

It’s just another signal that if you are thinking about buying a new car, like Hertz, you should think about buying an electric car.

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Business

Hertz Amps Up With Groundbreaking Tesla Deal

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Rental car giant Hertz was a shell of itself before emerging from bankruptcy earlier this year, but on Monday it flashed the latest sign of a rapid turnaround by placing an order for 100,000 pricey new Teslas to add to its fleet.

Markets viewed the deal as good for both firms, but the biggest winner may be the electric carmaker’s mercurial CEO, Elon Musk, who inched closer to becoming the world’s first trillionaire.

From Hert to Spurt

The Covid pandemic hit Hertz hard last year when it halted traveland car rentals dried up. On top of that, the company had just spent big bucks on Detroit muscle, leaving it with less gas in the tank than rivals Avis and Enterprise which remained solvent.

But fortune did a U-turn in 2021: Travel rebounded and a new investment group took Hertz out of bankruptcy with a $5.9 billion investment, the company lined up another $10 billion in loans while reducing its corporate debt by 80%, and sold 200,000 vehicles just as used car prices skyrocketed.

The Tesla deal has sparked Hertz’s fortunes:

  • The more than $4 billion order will deliver snazzy, environmentally friendly Tesla Model 3 sedans over the next 14 months, making a fifth of its global car fleet exhaust-free.
  • In trading Monday, Hertz shares were up 7.3% to $26.50.

“Since there is a lot of focus on [the environment] from investors, having 20% of your fleet being electric gives Hertz a stronger ESG investment narrative potentially than others in car rental,” said Hamzah Mazari, a Jefferies analyst, in an interview with Barron’s.

Elon-gated: A week after Morgan Stanley predicted he’ll be the world’s first trillionaire, the net worth of Tesla’s CEO and the world’s richest man Elon Musk got a quarter of the way there on Monday. At $252 billion, he’s worth almost $60 billion more than runner up Jeff Bezos. Meanwhile, Tesla stock was up 6.7% to $969 and its market cap passed $1 trillion for the first time.



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