Investor Bill Ackman makes a bullish case for Hertz, citing the car rental company’s advantageous position in the current tariff environment and potential partnership with Uber.
Bill Ackman‘s Bullish Bet on Hertz: A Tariff Winner?
The Fleet Value Advantage
President Trump‘s auto tariffs may have sparked fears of price hikes among consumers, but some car-buying businesses could actually benefit. Investor Bill Ackman, founder of Pershing Square Capital Management, made a bullish case for Hertz yesterday (April 17), after revealing a nearly 20 percent stake in the car rental company.
William A. Ackman is an American investor and hedge fund manager, best known for his leadership of Pershing Square Capital Management.
Born in 1966 in New York City, Ackman graduated from Harvard University.
He began his career on Wall Street at Kidder, Peabody & Co.
Before founding Pershing Square in 2004, Ackman worked at Goldman Sachs and Graham Holdings Company.
He is known for activist investing strategies, targeting companies such as McDonald's, Herbalife, and Valeant Pharmaceuticals.
Hertz is uniquely well-positioned in the current tariff environment. As 25 percent levies on imported cars drive up used car prices, the value of Hertz’s fleet—around 500,000 vehicles worth roughly $1.2 billion—will rise in tandem, Ackman argued. A 10 percent increase in used car values would boost the company’s fleet value by $1.2 billion, nearly half of Hertz’s current market cap.
Emerging from Bankruptcy and a New Direction
Hertz has had its fair share of troubles in the past few years. After declaring bankruptcy in 2020 during the Covid-19 pandemic, the company pivoted hard to electric vehicles—placing a costly bet on Tesla that fell flat due to soft demand. In February, Hertz reported a $2.9 billion loss for 2024 and said it had sold off 30,000 EVs from its fleet.
A New CEO and a Brighter Outlook
That task falls in the hands of Hertz’s new CEO Gil West, who stepped into the role in early 2024. West is focused on ‘rotating Hertz’s fleet, increasing unit revenues, and reducing operating costs’ to ‘significantly improve profit margins over the next several years,’ Ackman said.
A Strategic Partnership?
Ackman also highlighted Hertz’s advantageous position in an oligopoly. He noted that Hertz and its two rivals, Enterprise and Avis, currently control around 95 percent of the car rental market. Praising Enterprise as the best-run of the trio, Ackman pointed to its estimated 20 percent profit margin as evidence ‘that the car rental business can be very profitable.’
In a note to employees today (April 18), West praised Ackman‘s support and described it as an ‘testimonial to our progress,’ according to Bloomberg. Ackman also floated the possibility of a partnership between Hertz and Uber, another company Pershing Square has taken a sizable stake in.
A Potential Partnership with Uber?
‘What if [Uber] partnered with Hertz on an [highlight]autonomous vehicle[/highlight] fleet roll out over time?’ he suggested, hinting at a potential conversation with Dara Khosrowshahi. With its large fleet, global footprint and expertise in vehicle maintenance, Hertz would ‘make it an ideal partner’ for Uber, Ackman said.
Founded in 2009 by Travis Kalanick and Garrett Camp, Uber revolutionized the taxi industry with its smartphone-based ride-hailing service.
Initially available in San Francisco, the platform quickly expanded globally, offering users a convenient alternative to traditional taxis.
By 2014, Uber had raised over $2 billion in funding, reaching a valuation of $17 billion.
Today, Uber operates in over 10,000 cities worldwide, with a presence in more than 70 countries.
Uber seems open to the idea. ‘Hertz has been a great partner of ours,’ Khosrowshahi responded on X. ‘Excited to brainstorm on how we can expand our relationship!‘
