Love Hertz: Why the Auto industry is courting Car Rental Companies
Rental companies in some ways resemble CD players: they still exist, but their business is in steep decline and they seem to be more of a throwback into the 20th century. Once we are able to simply hail a driverless ride with our smartphones, renting a vehicle will be pretty much obsolete.
Or, wait. Not that fast. Not only did stock prices for rental car companies Avis and Hertz skyrocket last week – after both companies struck deals with huge self-driving car players – but experts now even consider these companies a crucial door opener for the mass deployment of driverless cars. I guess we can call it a comeback.
This is what happened: Waymo just announced a partnership with US rental car giant Avis who will manage Waymo’s autonomous fleet in Phoenix, Arizona. With Waymo having recently partnered with ride hailing service Lyft, this deal may strike you as a little odd at first. So what does Waymo stand to gain from it? Well for starters, an exceptional infrastructure. As reported by Recode, Avis is currently running 11,000 locations worldwide – which means not only international market coverage but also extensive know-how in efficiently cleaning and maintaining a massive vehicle fleet. This expertise will become especially important once cars run driverlessly – because, you know, there won’t be a driver anymore to take care of this. Avis’s locations could also serve as a spot where autonomous vehicles are parked when not on the road.
On a slightly smaller scale, Apple is cooperating with Avis’s competitor, Hertz. The iPhone maker will lease several Lexus SUVs from the rental company to test their self-driving efforts in California. Judging from Hertz’s increase at the stock market, shareholders may well expect more to come. And let’s not forget German rental firm Sixt, which has already been cooperating with BMW on the car sharing service DriveNow for several years. Thinking about it, maybe rental companies rather resemble record players. They might be old, but they are currently celebrating a revival.