Stephen Scherr's resume boasts an impressive track record. With a background as a qualified lawyer and extensive experience in pivotal strategic roles at Goldman Sachs spanning 28 years, he seemed like the perfect fit for the CEO position at Hertz as the company emerged from bankruptcy in 2022. Armed with his strategic prowess, Scherr made a bold move to set Hertz apart by embracing electric vehicles (EVs) as the future of transportation. He committed to procuring 100,000 Teslas, 65,000 Polestars, and additional EVs from General Motors, placing a strong emphasis on the customer experience centred around electric vehicles.
From a strategic standpoint, Scherr's vision appeared promising. Electric vehicles are rapidly gaining popularity, offering a thrilling driving experience coupled with cutting-edge technology, including in-car entertainment systems and various gadgets to enhance the journey.
However, there was a hitch. Transitioning to electric vehicles presents a learning curve for the drivers. Anyone who buys an EV typically spends considerable time in the showroom receiving instruction from salesperson before taking the car home. While EVs offer numerous benefits once you are familiar with them, unfamiliarity with features such as the absence of a traditional handbrake and complexities in operating functions (like turning on lights or changing the heating) can lead to confusion. Moreover, the challenge of finding charging stations, particularly when traveling away from home, adds another layer of inconvenience.
What initially seemed like a savvy strategy aimed at providing a differentiated customer experience turned into a nightmare for Hertz. Despite offering Teslas for hire at heavily discounted prices, customers showed a preference for more conventional vehicles. Additionally, Elon Musk's decision to slash list prices on Tesla cars further exacerbated Hertz's predicament, resulting in significant losses when attempting to sell off excess EV inventory.
Unsurprisingly, Scherr's tenure at Hertz came to an end. Departing without the substantial bonus he would have received had he managed to bolster the company's share price, his reputation suffered a blow due to the failed turnaround efforts. Nonetheless, his contract entitles him to lifetime free car hire from Hertz, offering some consolation. More importantly, Scherr gleaned a crucial lesson from the ordeal: convenience is paramount in delivering exceptional customer experience. While the benefits of electric vehicles may be apparent after thorough instruction and study, the reality is that customers often gravitate towards the familiar and convenient, especially when embarking on new journeys shortly after landing from a flight.