The rental car industry had its beginnings closely tied to Ford's introduction of the economical Model T in 1908. In 1916, a Nebraskan named Joe Saunders was supposedly the first person to start a rent-a-car business when he lent out his Model T to travelling salesmen. (Mr. Saunders' first customer is said to have been a salesman needing transportation for a date with a local girl.)
In September of 1918 in Chicago, Walter L. Jacobs, then only 22 years old, opened a car rental business. He began with about a dozen Model T Fords, repairing the cars himself, and by 1923 his car rental business was generating $1 million in annual revenues.
In these earliest years, rental car companies became associated with criminal activity, especially during Prohibition. Many believed that cars were often used by bootleggers, bank robbers and prostitutes. After the 18th Amendment was repealed in 1933, the industry was able to regain a respectable reputation, and the business grew.
In reaction to the growth of private ownership of automobiles, a number of railroads created Railway Extensions, Inc . In addition to car rental franchises, the group endeavored to encourage car rentals use by allocating space for rental booths at railroad stations, as well as subsidizing telegraph service for passengers to reserve cars at one station and pick them up at their destination.
After the Second World War, the car rental industry grew rapidly. This growth was linked closely with the boom in the airline industry.
The industry has been extremely competitive since the 1960s, when price wars and the success of small name renting companies forced prices down. It is an industry still closely linked with airline transportation.
Duke Universities Library Digital Collections
www.library.duke.edu/digitalcollections/adaccess/carandbus.html
