Hertz Global Holdings Inc. reached agreements with Uber Technologies Inc. and Lyft Inc., the two largest U.S. ride-hailing start-ups, to supply drivers with vehicles the rental-car company rotates out of its fleet.
The partnerships, announced in statements Thursday, might mark a reversal for Hertz, which said in January that ride-sharing services were crimping growth.
Uber and Lyft have been seen as a threat to auto-rental companies as travelers opt for an on-demand ride as opposed to driving a rented vehicle.
"Largely, Uber is a technology company, so if you think about who can provide fleet management services I think the list is rather short" and includes Hertz as well as Avis Budget Group Inc. and Enterprise Holdings Inc., said Northcoast Research analyst John Healy. Hertz is "already on the fringes of this business" and it could be a big market for the company, he said.
Midsize cars for Lyft and Uber drivers will rent for $180 a week, including all mileage and insurance costs, said Hertz spokesman Bill Masterson. A Lyft representative said the company's drivers get a compact vehicle for $165 a week in Las Vegas and Denver, where it has had a pilot program with Hertz since last year.
"We believe renting to ride-sharing drivers will be more profitable than selling these vehicles, but that's something that we're going to learn in the first year of this supply agreement," Masterson said in a phone interview.
