Thursday, October 23, 2008
The Financial Crisis and Me, or Through the Looking Glass
This isn't a hard luck story. Yet. But it could easily become one.
I have a (very) small business teaching acting in San Francisco and, recently, in Los Angeles. I live in SF and just started flying down to LA once a week on a cheap Southwest flight to teach there. More of a market, lots of serious students, plus I like SoCal and warm weather and have some great friends down there.
The main expenses for the LA class are the rent of the blackbox theater where I teach, the flight, and a rental car. I couchsurf with friends for lodgings.
There were some very bizarre developments on the rental car front recently.
andrewj54's diary :: ::
My decision to starting teaching in the Southlands was in part predicated on the fact that rental cars in SoCal could be obtained cheaply through sites like hotwire.com, where companies try to find renters for cars they have sitting around the lot. They advertise that they have cars for $7.00/ day. I spoke to someone who got a rental car in Burbank for $12/day. Of course with taxes and a Loss/Damage waiver, it becomes more expensive, but not prohibitively so.
This summer, when I was coming down to LA to shake the trees and promote the class, I got prices on cars that were in that ballpark. But recently, I noticed that the prices were starting to go up. Suddenly it became hard, to find cars for less than $40/day, though with a bit more searching it was still possible to find deals like $25/day.
This week, hotwire and carrentals were offering prices like $80/day for economy cars. I did still manage to find a cheaper one, but it took some doing.
I got into Burbank on my last trip and the dude from the Hertz office I sometimes rent from picked me up. This office is not the one in the airport, but it's in Burbank nearby. Their rates are much cheaper.
I had reserved an economy car at a $25/day base rate. He showed up to pick me up in a flashy SUV that is more fitting for a studio executive than a humble acting teacher. He told me that this was the car I would be driving, at the rate I had reserved. It was the only car they had left. It usually rents for about $90/day.
He said that the Hertz office at the airport was facing something unprecedented that day: they had 90 cars on the lot and 1,000 reservations. That's right, 1,000. So they had rented all the cars from the other local Hertz offices and local small business renters to try to meet the rental car tsunami.
Why, you ask? Why this surge in demand for rental cars at the airport, in the midst of what is being called the worst financial crisis since the Great Depression?
In two words, opportunistic pilgrimage. Tourism.
Because of the sorry financial situation in the US, it is a RIDICULOUSLY cheap vacation destination. And so they are flocking: Japanese, Koreans, Europeans of every stripe, Brazilians. You can find them all at the corner of Hollywood and Highland, looking at handprints of dead Hollywood celebrities in the concrete sidewalk.
One of the things I like about my LA sojourns is actually the driving. I don't have a car in SF, and on the whole, that works just fine. I get the occasional zipcar when I need to go to Trader Joe's or zip down to Stanford to see me dissertation advisor, and otherwise, I enjoy my green lifestyle and my panoramic city. But in LA, I have wheels and I feel 17 again. I love navigating the city, weighing freeways vs. surface streets, snaking through canyons, taking in the great cauldron of humanity that is the City of Angels.
And one of the great pleasures of this is listening to the radio. They actually have a commercial radio station here dedicated to indie rock, which I love. But with the election coming up, I am always listening to NPR.
I heard a story that seemed to recapitulate my experience at the rental car office: in someplace called Johnson County (I don't know where that is, unfortunately), it was being reported, as typical of a national trend, that food pantries, places you go to get a hot meal on the dole, are drying up, because no one is donating. The cavalry is riding to the rescue, though, not the government, but local thrift stores, which are in boom times like they have never seen. They were donating to the soup kitchens. In other words, people who usually donate food are hording it, and going to the thrift store to buy clothes, because they can't afford to shop at the Gap. The gigantic ebbs and flows in the free dinner and thrift store markets seemed to echo the surge in demand for tourist-mobiles in the rental car market I had heard about this morning in kind of an eerie way.
Oh, and the dude from the rental car company (cropped dark hair, stocky, sporting a tie but no jacket in the SoCal heat, wraparound shades reading a book about anthropology of religion) told me how the rental car companies would respond to the crisis. Would they respond by adding to the fleet of available cars? No, they would keep demand high by limiting supply, so they could continue to charge through the nose.
I hope we find our way out of this. But I think we better prepare the fan for the shit, all the same.
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