Hertz Goes Big With Car Sharing

On Dec. 16 the Hertz Corporation officially launched Connect by Hertz, a car-sharing program, in New York City, London and Paris. While the initial start-up is modest—New York has 40 vehicles while London and Paris have approximately 15—Hertz plans aggressive global growth in 2009, Mark Frissora, chairman and CEO of Hertz Global Holdings Inc., told Auto Rental News.

Connect by Hertz
Connect by Hertz follows the standard car-sharing model: Customers enroll in the program and pay a monthly or annual fee. Members book vehicles online or via phone for an hour, a day or up to a week, with 24-hour access to vehicles. The cars are placed in designated parking spaces and are accessed electronically via an RFID reader and a smart card.

Rates start as low as $8.50 an hour—lower than Zipcar’s in most places. All rates include 180 miles per day. Insurance, gasoline, maintenance and cleaning are included in the membership usage charges.

The New York fleet consists of the Toyota Prius, Ford Escape, Mazda 3, MINI Cooper and Toyota Camry.

But Will It Make Money?
Zipcar, Connect by Hertz’s main competition, has yet to make a profit. The company gobbled up its biggest rival, Flexcar, in 2007 and consolidated locations. Hertz’s initial goal is to enter the top 20–25 U.S. markets and major markets in Europe. How will it compete and profit where others have yet to?

“We’re trying to out-maneuver the competition by having more availability, lower prices and more technology,” Frissora said.

Unlike other car-share companies, every vehicle in the Connect by Hertz fleet is equipped with an iPod adapter, Bluetooth capability and NeverLost, Hertz’s in-car navigation system.

Drivers are able to interact with call center representatives through an in-car communication system, which is similar to OnStar. Members can get help and book or extend reservations from inside the car. The system is designed as a customer service but will also generate ancillary revenue opportunities, Frissora said.

“While it is a virtual experience, we’re connected to [the customer] probably better than normal car rental because of that capability to be instantly connected to us,” said Frissora.

CONTINUED:  Hertz Goes Big With Car Sharing
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