John D. Hertz - Business Career

Business Career

Hertz had extensive and complex business interests, mainly in the transport sector.

Hertz's first job was selling newspapers, and eventually he became a reporter for the Chicago Morning News. When the paper, then called the Chicago Record merged with another paper, he lost his job. Although he couldn't drive, in 1904 he found a job selling cars at the suggestion of a friend. Because of the number of trade-ins, he came up with the idea of creating a cab company with low prices so the common man could afford to ride in them. In 1907, he had a fleet of seven used cars that he used as cabs.

He founded the Yellow Cab Company in Chicago in 1915 which offered taxicab service at a modest price. The distinctive yellow cabs became popular in his home city and were quickly franchised throughout the United States. He then founded the Chicago Motor Coach Company in 1917 to operate bus transport services in Chicago and the Yellow Cab Manufacturing Company in 1920 to manufactured taxicabs for sale. In 1923 he founded the Yellow Coach Manufacturing Company to manufacture coaches and later cars. In 1924, he acquired a rental car business, renaming it Hertz Drive-Ur-Self Corporation.

Competition between the Yellow Cab Company and Checker Taxi in Chicago was fierce and frequently violent with a number of shooting and deaths.

By 1925 the Yellow Cab Company was owned by the 'Chicago Yellow Cab Company' which in turn was owned by Hertz, Parmelee and some other investors. In the same year he established The Omnibus Corporation to control both the Chicago Motor Coach Company and the Fifth Avenue Coach Company in New York.

In 1925 Hertz held the following positions:

• President of the Yellow Cab Company
• Chairman Benzoline Motor Fuel Company
• Chairman Chicago Motor Coach Company
• Chairman Fifth Avenue Coach Company
• Chairman New York Transportation Company
• Chairman Omnibus Corporation of America
• Chairman Yellow Coach Manufacturing Company
• Chairman Yellow Sleeve-Valve Engine Works
• Chairman Yellow Truck and Coach Manufacturing Company

In 1926 he sold a majority share in Yellow Cab Manufacturing Company together with its subsidiaries, Yellow Coach Manufacturing Company and 'Hertz Drive-Ur-Self' to General Motors. Hertz became a main board director at GM at the same time.

He then sold his remaining interest in the Yellow Cab Company in 1929 following the firebombing of his stables where 11 horses were killed.

In 1933, Robert Lehman sold Hertz a minority interest in Lehman Brothers investment bank in New York City and he remained a member of the firm until his death. In 1938 Hertz was prepared to buy Eastern Air Lines from General Motors but the airline's General Manager, Eddie Rickenbacker, was able to raise the necessary financing to acquire Eastern before Hertz could exercise his option. In 1943 he sold his remaining financial interest in Yellow Coach Manufacturing Company to General Motors.

Using The Omnibus Corporation he re-purchased the car rental business from General Motors in 1953. The Omnibus Corporation then divested itself of its public transport interests, changed its name to The Hertz Corporation and floated on the New York Stock Exchange the following year.