Avis Budget Group and I.D. Systems signed an exclusive agreement Aug. 22 for a free wireless vehicle management system for corporate clients that will enable “virtual rental transactions,” according to press releases. The wireless system will be used in a new program, “Avis On Location,” which will be deployed into Avis Budget’s rental fleet starting with 25,000 vehicles in the United States and Canada. This first phase is valued at about $14 million over a span of five years.

The system is based on radio-frequency identification (RFID) and allows a corporate client to use their smartphone to rent and check-in Avis Budget vehicles at a corporate campus or virtually any location. The service allows competition with car sharing companies like Zipcar through hour-by-hour charging without staffing employees; it also services daily and one-way rentals of corporate clients. “The service can be deployed quickly wherever demand dictates with as few or as many vehicles as needed,” said Jeff Jagid, CEO and chairman of I.D. Systems in an Aug. 23 conference call (transcription can be found at www.seekingalpha.com). Unlike Zipcar, though, no subscription is needed to access the service — just a smartphone.

The technology allows two-way data communications between existing Avis Budget car rental operating systems and the vehicle, allowing the rental company flexibility in vehicle allocation during shifting markets. The technology allows significant automation of vehicle data collection, such as fuel level and odometer information, and billing. An electronic receipt is automatically sent once the transaction is completed.

The agreement comes after a pilot program, where the technology has been used in airport locations and corporate campuses, and 10 years of collaboration between I.D. Systems and Avis Budget, according to a press release. “We believe the expanded deployment of virtually enabled vehicles will enable us to drive incremental business with our established base of corporate customers and to place additional cars in local-market settings, driving revenue growth,” said Ron Nelson, CEO and chairman of Avis Budget Group in a joint press release.

I.D. Systems and Avis have partnered since 1998. The agreement also includes a $4.6 million investment from Avis Budget to obtain about 9 percent of I.D. Systems equity stake and warrants. At any time in the next five years, Avis Budget can decide to expand the system distribution globally at any point during the five-year agreement.