Hertz Reaches Agreement with Uber, Lyft to Supply Rental Cars

A Lyft driver. Photo courtesy of Lyft.
A Lyft driver. Photo courtesy of Lyft.

Hertz Global Holdings Inc. has reached an agreement with Uber Technologies Inc. and Lyft to supply their U.S. drivers with cars under specified rental agreements.

The agreement provides set rental rates for ride-share drivers, who can rent from specified off-airport Hertz locations that give on-site support. The cars can be used for personal driving as well as for Uber and Lyft business.

Initially, Hertz is supplying Uber partners in the Los Angeles area with other markets expected to follow as part of the national agreement, says the company.

A customer requests a ride through Uber's mobile app. Photo courtesy of Uber.
A customer requests a ride through Uber's mobile app. Photo courtesy of Uber.

For Lyft, this agreement builds upon two pilot markets (Las Vegas and Denver) where Hertz and Lyft have partnered together since November 2015. All rentals in the pilot programs will now be under this new agreement.

In addition to Las Vegas and Denver, Hertz will begin renting cars to Lyft drivers in Los Angeles and San Francisco with more markets expected to follow as part of the national agreement, according to the company.

“We’ve been looking for a while at this space and have been talking to ride-sharing companies to figure out where the opportunity was for us to participate in the market segment,” said William Masterson, Hertz’s vice president of communications.

Hertz developed a model to approach how it supplies cars that would be rotated out of its fleet, says Masterson. “This is another opportunity to gain revenue from those vehicles, and they’re perfectly good vehicles for ride-share drivers.”

Hertz offers mid-size cars that are a little more than two years old — or in excess of 30,000 miles — to Uber and Lyft drivers, according to Masterson. The terms include a minimum one-week rental that can be renewed each week. Per the agreement, every 28 days drivers must bring the vehicle back to the physical Hertz location for an inspection and to renew the rental.

“The idea is that together with the right cars and the right locations to service them we can keep our costs down per transaction,” said Masterson.

The weekly rental rate to drivers in the program is $180 per week, typically for a midsize car. There is no mileage cap, and the rate includes a customized insurance package and roadside assistance.

The new ride-share program gives Hertz another option upon rental de-fleeting, said Masterson. Hertz will track their cost trends and adjust accordingly. ”We’ll decide whether to put them into the pool for ride share, or if we can get more value in retail or dealer sales or auction channels.”

"Utilizing cars that are rotating out of our consumer rental fleet creates a model that works for Hertz and for Uber and Lyft drivers by providing them with well-maintained, good condition cars,” said John Tague, president and CEO of Hertz Global Holdings. “We consider this agreement to be largely complementary to our car rental business, and it enables us to leverage our fleet and distribution infrastructure to participate in the dramatic growth in the ride sharing, or e–hailing, segment."

Comments

  1. Solomon Cramer [ July 4, 2016 @ 06:03AM ]

    I'm still trying to understand the profit potential in this for rental companies. You are renting vehicles to people whose purpose is to rack up heavy miles transporting people around, destroying the residuals and even potentially cannibalizing your own business. Uber/Lyft exist because people don't calculate soft costs of operation and depreciation...now we will help operators avoid them entirely?

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

Autonomous Vehicles and the Changing Role of the Fleet Manager

With fewer drivers and substantially longer fleet lifecycles, fleet managers will pivot to new job functions.

2017: Fleet Mix Will Be Paramount

Car rental companies are migrating to vehicle segments with better residual values, though not without bumps in the road.

Auto Rental Summit: Five Trend Lines

Taking in the seminars, discussions, and networking at the 2016 Auto Rental Summit, trend lines emerged around shifts in model mix, data protection issues, increasing labor costs, workforce engagement, and new platforms to rent cars.

Job Finder: Access Top Talent. Fill Key Positions.