The engagement around rideshare involves a whole sort of exercise of engagement with Uber around programs and pricing schemes and technology engagement. All of that is not rippable quickly in the context of what’s there, and it’s a less competitive market relative to sort of the dynamic price movements you see in rack. I’d also point out that the technology engagement that we have with Tesla was cited in the Tesla earning call in the context of us creating unique apps for our customers that enable them to use the car with greater ease than not. All of these are aspects that I think will ultimately prove to be to our great benefit in terms of the value. And we have a plan to sort of address the near term costs that have produced that delta in margin.
Ryan Brinkman: Very helpful. Thank you.
Stephen Scherr: Sure.
Operator: One moment for our next question. Our next question comes from Chris Stathoulopoulos with SIG. Your line is open.
Chris Stathoulopoulos: Thank you, Stephen. I appreciate all the detail here around the EVs. If we could talk a little bit about the Dollar and Thrifty efforts here, could you provide a little bit more detail on this initiative? Some of the tactics and timeline I’m guessing a lot of this will be addressed at your Investor Day, but any more detail here, tactics and timeline would be helpful. Thank you.
Stephen Scherr: Sure. Yes, absolutely. So, just for context, Dollar and Thrifty were brands that were bought by Hertz about it, I think more than a decade ago. And I think that they were not particularly well attended relative to sort of where our competition moved with value brand. And the TAM here is significant. And I think that part of the challenge that we have, and it proved out in the third quarter, is that the journey for a customer around our Value brand is not yet to the specification that it ought to be. And as a consequence, we’re compelled to price lower than where other value brands price. So somebody, for example, that cares to use an OTA as opposed to coming to us directly, will see a score around the Dollar or Thrifty brand that is appreciably lower than the competition and they then make a judgment about how much lower will they need to procure a car to justify that experience.
We don’t want that to happen anymore. So we’re improving the journey in order to regain pricing leverage and ultimate pricing parity. So what are we doing? First of all, the shop and book is better. We have engaged with third parties in the build of a different shop and book proposition that will yield outcomes, where we will communicate, much like the airlines do with somebody that’s going to rent a car from Dollar in advance, where we’ll offer value added service products, upgrades and the like, again, much like the airlines do. Then you will arrive at the airport with an assigned space where your car will be. There will be people with tablets who are going to sort of show you to an upgraded car should you want it, offer you other services to the extent you want it.
You’ll be given a QR code. You then move to the exit gate and off you go. And we will have captured on the shop and book, driver’s license and various other things. That is a much better process than one that involves long wait times online. Now, this is not a hypothetical. This is already happening at four airports. So this is a project that is begun already. We’re going to look to expand it to ten, then 20, then to the top 30 airports and expand this as and when we test it, validate it, hone any issues that need to be honed and get this out. And again, this is not a share grab, much as I’d like to take share. This is a question of can we take price even against the static book of business, which will be meaningfully accretive to us in the context of lower cost, lower depreciated cars, better margin, and better pricing.
Chris Stathoulopoulos: Okay, thank you. And then on the demand side, I know that you said fourth quarter. It sounds like at least seasonally in line, but we’ve had some results from several of the airlines today, some worse than others. It would suggest that leisure demand here in the U.S. is softening. So could you perhaps provide a little bit more detail as it relates to put these in however buckets you see it as it relates to leisure business and then inbound international? Thank you.
Stephen Scherr: Yes, I mean I think that as I read the airlines and I listen to the commentary, there’s a bit of a dichotomy that’s breaking between kind of upper end travel, which I would include certain corporate travel, and more leisure or value travel. And obviously the airlines skew differently as to which component of that they emphasize. I would say in our Hertz brand, which plays to a more premium product both by way of service, offering loyalty and the like, we continue to see strength in leisure both in North America and in Europe. Now, it’s obviously hard to have conviction as to what’s to happen to the consumer and what’s to happen to the economy as we get deeper into the fourth quarter or into next year. And obviously, we have a slightly more limited forward booking view than do airlines or hotels.
But in the context of what we see and in the skew that we see around certain of the airlines, I feel quite good about the Hertz brand, our ability to continue to see demand, and we’re going to do all that we can do to sort of capture as much pricing as we can around that brand. Obviously, the dollar value brand is being built, as I’ve now described several times in response to questions. Could that get softer? It could, but I think the countervailing view on it is that as we improve, we’ll gain some pricing pressure. And we’re not looking to that in the earliest sort of phase of that model to see a meaningful pickup in days. We’re just looking for pricing leverage around it. So that’s how I would sort of parse through this.
Chris Stathoulopoulos: Okay, thank you.
Operator: This concludes today’s question-and-answer session. I would now like to hand the call over to Stephen Scherr, Chief Executive Officer. Please, go ahead.
Stephen Scherr: So thank you all for your participation today. Before we close the call, I want to thank the 25,000 employees of Hertz for their continued service and their attention to our customers. We look forward to sharing further updates with you on our next call. Back to you. Operator.
Operator: This concludes the Hertz Global Holdings third quarter 2023 earnings conference call. Thank you for your participation.
