jackal

I think you've hit the nail on the head: these companies need their "premium" brands they can use to charge high rates (and make big margins) to the business crowd. It's much harder to make a profit on cars without a premium brand--the break-even point on rates is in the neighborhood of $20-25/day, and if you're always renting cars for less than that, you're not running a sustainable business. However, the fact that DTAG has performed well lately and looking at how Enterprise built up its empire on just the value Enterprise brand (before buying Vanguard dba Alamo National) means that there is definitely corporate value in the value-brand market.

It's also odd because Hertz has been expanding their Advantage brand, which should be filling the value-traveler niche. However, reviews of Advantage are not terribly positive--there are a lot of issues with overcharging, bad attitudes, and the like. I would have expected more from Advantage once it was brought under the Hertz umbrella, but the service improvements I expected have failed to materialize. (Hint to Hertz: maybe this is why Advantage is not meeting expectations?)

In any case, your strategy is also my strategy, too. If all else is equal--or the price premium is within reason (20%, maybe), I'll pick a top-tier company like National, Hertz, or Avis (in that order, and for the same reason you indicated: I like being able to choose my own car, plus National typically carries more interesting cars than Hertz). I do this for a couple of reasons: one, the brand experience is a bit more consistent with these companies. A well-run DTAG store can actually approach the experience a Gold member gets when using Hertz; some DTAGs actually have a variant of Hertz's "Gold Board" and preprint the contract and have it waiting in your car, making it pretty much just as speedy as Hertz. However, that seems to be the exception, and you won't find that kind of service at all DTAG stores. Additionally, DTAG's brand standards are less stringent than Hertz's on matters such as shuttle frequency and staffing, and they are a bit more picky than Hertz on damage (although not unreasonably so, IMO: Hertz actually lets things slide that I wouldn't let slide if I were loaning my personal car out, whereas DTAG is a bit more strict but entirely fair about it). And while I actually prefer DTAG's rewards structure as it stands for earning free days, Hertz obviously has the advantage when it comes to elite benefits--DTAG doesn't offer any vehicle upgrades or other perks for even hyper-frequent renters.

Another reason I would pick the premium brands for a small price premium is they generally have more corporate stores and thus more flexibility. If you rent a DTAG car in CLT and take a road trip to MCO (as I did a few years ago) and something happens to your Thrifty car in South Carolina or Georgia (fortunately, this didn't happen to me), you're SOL. DTAG is franchised in SC and GA, and a franchised Thrifty location might as well be a Budget or Alamo for all the good it does you. DTAG franchisees are 100% independently owned and operated, and they can't help you if something goes wrong with your corporate Thrifty car--they can't come tow your car in for service, perform maintenance on it, swap you out for another car, or do anything else except give you the phone number to Thrifty corporate (where help is two states away). Conversely, other companies have very different business models, where most or all of the stores are corporate, and even those who are licensees are much better integrated into the corporate system. If you're driving a Hertz car and it dies on you in Hinesville, GA, no worries--there's a corporate Hertz Local Edition there where you can swap to another car in just a few minutes. (This is usually the case with Hertz and Avis, true to a slightly lesser extent with National and Alamo, mostly the case with Budget, shouldn't be an issue anymore with Enterprise after their restructuring, but is often a concern with DTAG and always a concern with the bottom-tier [bottom-feeder] agencies like Payless or Fox.) Plus, DTAG's high level of franchised locations presents a higher risk for customer service issues; although most franchises do try to run a good business, they're less likely to be interested in looking at the big picture (the owner in Spokane couldn't care less that you've rented a hundred cars in the last year in Chicago, Indianapolis, Austin, or Boston--if you damage his car, he wants you to pay him back), and consequently, things that a corporate store might give a bit on in the name of customer service (like extra charges for returning late and things of that nature) may be major sticking points at a franchised location.

That said, though, I am willing to pay about 20% more at the most to rent from a premium agency (after all discounts and coupons have been applied, of course). I don't consider the benefits of Hertz et al. to be worth double or triple the price, and I often see Hertz in that category ($50+ when cars with DTAG are $20, or $150+ when cars are $40 with DTAG).

There's lots more I could write on this subject, but you get the general idea.

On a personal note, I'll be disappointed if this goes through, because the DTAG employee culture is actually pretty positive. I've heard nothing but discontent from those I know who have worked for The Hertz Corporation. I'll put it this way: most of the people I know who work for DTAG still do years later. I don't know anyone who still works at Hertz.