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These teenagers violated the law, they are told. Why? For giving the local car rental firms too much competition.
They decided last year that they would go into business rather than go to college. They had a business plan. They would rent cars owned by Bay Area people. Who would borrow these cars? People who had flown into San Francisco.
This is part of a growing national movement: the rental movement. CBS News’ Sunday Morning ran a story on this as its lead story on Sunday.
Here is a video on how the new car rental firm works.
It makes sense.
It makes too much sense.
The rent-a-car companies see what is coming. These teenagers can provide cheap slightly used cars, because they spend no money on buying a fleet of new cars. This is low overhead!
This will be imitated. Hertz, Avis, and the gang are relying on what looks like a high-overhead business model.
The city of San Francisco has decided to nip this in the bud. It has taken these teenagers to court for unfair business practices.
Crony capitalism? You’ve got it!
June 28, 2013
Copyright © 2013 Gary North