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The car rental industry is in a bit of a mess.
The world’s largest car rental company, Carvana, has lost $10 billion in value since the start of the year and is being blamed for the collapse in rental demand.
The company’s stock has plummeted by nearly 20 per cent in just a few weeks and now has lost over 50 per cent of its value since its founding in 2004.
Its demise has come on the back of a series of high-profile car rental scandals.
In June, a former Carvana employee was convicted of defrauding clients and was sentenced to 12 months in jail.
Another former employee, James Stirling, who was also charged, was found guilty of fraud and jailed for seven years.
In July, a third former employee of Carvana was sentenced for fraud and has been out of the car rental business since.
In August, a Carvana spokesman said the company had received an additional $10 million from the US Securities and Exchange Commission (SEC).
The company has also been hit by allegations of fraud involving employees, including a former employee who allegedly defrauded customers out of tens of thousands of dollars by promising to provide them with a free car rental.
The SEC investigation has also prompted Carvana to make significant changes to its policies.
It will no longer use credit cards to rent cars and will instead require customers to pay with cash, credit card, debit card or bank account.
Carvana said that the changes were made to address the company’s problems and the allegations.
The scandal surrounding Carvana began when a former car rental employee was caught red-handed stealing clients’ money by claiming to be a broker for the company, which at the time was in the process of merging with the UK car rental giant, Avis.
The former employee was charged with stealing over $3 million from customers and faces a maximum penalty of 15 years in prison.
At the time of his arrest, Carla said the theft was all the result of the company “being in the car business and having a business relationship with a big company”.
“We did the best we could with our time and we will be working with the authorities to try and put things right,” she said.
Carla said she would also be moving to the UK to avoid the scrutiny of the SEC.
“I’ve been in the UK for so long and I have so much respect for the UK,” she added.
“If I could go back and change one thing in this industry, it would be to not have to worry about this type of situation.”
It’s just a waste of my time and I don’t want to go back.