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.
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."