The Spirit of the Independent Remains
If you’ve been around the rental industry for a few years or more, you probably know of a legendary figure named Dan Kaplan and very possibly you knew him. If you did, you might have a story or two to tell about him. When I first met him, I found him a little intimidating. I was new to the rental industry and he was already a legend as the CEO of what for years was the largest equipment rental company, Hertz Equipment Rental Corp. He seemed to know everybody and everything and I was new to the industry and felt like I wasn’t really smart enough to ask him an intelligent question.
Well, eventually I got to know him and we grew to be friends and I was saddened when he passed away a few years ago. But that’s another story. In the mid-90s he left Hertz and became the industry’s leading consultant, traveling the world giving his advice to rental companies, including regular consulting to United Rentals in its early years.
Kaplan gave a historic speech at an ARA show in Atlanta. I believe it was 1995 or 1996. In this speech he predicted the age of consolidation. He predicted that within a couple of years of that time that consolidators with history in private equity would come along and begin buying up independent rental companies. United Rentals came along a year or two later and soon there was NES, NationsRent, Neff Rental, Rental Service Corp., Prime, H&E Equipment Services; Sunbelt Rentals and Hertz grew larger, and there were others, spending what one rental guy used to say to me, “They got more money than they got sense!”
But it was an inevitable trend in a growing industry. Eventually, the biggest of the biggest prevailed and the consolidators consolidated among themselves and the biggest bought the next biggest and so on. Still standing, of course, are United Rentals and Sunbelt and Herc.
Dan Kaplan was absolutely right about several things. One was the need for analytics. Way back in the 1990s, long before AI and telematics and predictive maintenance and some of the very sophisticated methods of measuring performance, he compared the similarities of measuring rental performance to baseball statistics. Just as in baseball you could analyze your team or particular players by looking at batting averages, on-base percentage, earned run average, runs batted in and so on (this was before OPS and WAR and other more up-to-date measurements), there were important measurements in the rental industry.
How about percentage of on-time delivery? If you get an order in advance for a specific time, why was the delivery late? If a piece of equipment breaks down on a jobsite, what’s the average time to either repair or replace that machine? These were the basics of the industry, but if your system was flawed it needed to be studied and fixed.
Of course there are different factors with different locations, but the important thing is not necessarily to measure your performance versus other companies, but against yourself. Whatever important function you are measuring, whether its speed of repair or on-time delivery or reducing the frequency of breakdowns, the important thing is are you getting better? Kaplan taught the essence of tracking these and other measurements.
Kaplan strongly believed that these large, better-financed companies would lead to more sophisticated and efficient performance with better software and more efficient systems. Rental companies would become more professional, run by better educated and more prepared leaders.
The one area that Kaplan overestimated was the disappearance of the small independent. Kaplan felt that the small independent would not be able to compete against better-financed and larger companies, that they would eventually disappear. But as this year’s RER 100 shows, they keep coming back. New companies with new initiatives and innovations keep revitalizing the rental entrepreneurial spirit. New intelligence and not only the artificial kind.
Take a look through this year’s RER 100 listing and you’ll see the continuing arrival of new rental companies re-creating the industry with original ideas and approaches. The RER 100 can be read on RER’s digital edition: https://mydigitalpublication.com/publication/?i=866146
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.