Rental car companies look to stay relevant by entering the self-driving race
Rental car companies enter the self-driving space.
The self-driving car race has some new entrants: rental-car companies.
Two high-profile moves reported this week link driverless cars with Big Car Rental: Google’s Waymo entered partnership with Avis to storing and maintaining autonomous vehicles, while Apple’s self-driving Lexuses have been linked to Hertz in news that, notably, hasn’t been officially confirmed by either company.
The two pairings will serve different purposes for the companies involved, but both point to one of the practical concerns about self-driving cars: managing the vehicle fleets once they’re free from drivers. The rental-car companies introduce a new intermediary between the companies building the autonomous systems and the riders of the fleets of autonomous cars that will eventually take over the roads.
Let’s take a look at what we know about both projects and how the rental car companies fit into the larger self-driving car development landscape.
Waymo and Avis
Avis will service Waymo’s fleet as part of the new partnership.
The Waymo-Avis partnership isn’t about the development of Waymo’s self-driving platform — at least not at the start.
Avis will instead provide fleet management, servicing, and maintenance support for Waymo’s 600-strong fleet of autonomous Chrysler Pacifica minivans as part of its public pilot program in Phoenix. Waymo’s vans will depend on Avis service centers for routine car maintenance — think interior and exterior cleaning, oil changes, and tire rotations — and for parking while they’re not on the road.
Waymo will still own the vans, and Avis’ workers won’t actually be touching the autonomous tech, just the cars. The partnership is more of a traditional custodial service than an exploratory effort, keeping Waymo’s cars road-ready rather than advancing the program’s potential.
But there’s could be more on the horizon when Waymo’s self-driving system expands beyond the Pacifica fleet. The agreement gives Waymo another partner with the essential components it will need for its platform as it matures: access to the existing infrastructure that supports the car industry. Avis also brings to the table its Zipcar services for short-term car rentals.
Waymo CEO John Krafcik acknowledged the potential for a future expansion of the partnership to Bloomberg following the deal’s announcement. "One of the wonderful things about partnerships like this is that they are open," he said.
Apple and Hertz
Apple’s reported association with Hertz isn’t even close to being on the same level as Waymo’s deal with Avis — but it’s still a notable development because of the immediate market response to the news.
The initial report about a potential pairing stemmed from little more than newly-released California DMV documents that named Hertz-owned fleet management unit Donlen as the lessor of the Lexus RX450h SUVs Apple is using to test its autonomous driving platform.
No other details about any more substantial aspects to the deal or a potential Apple-Hertz partnership have been reported, although most coverage following Waymo’s deal with Avis have conflated the two as being similarly structured.
Apple reps declined to comment about any potential agreements between the two companies, and Hertz reps had no comment when asked for clarification via email.
But rumors about a link to Cupertino, no matter how tenuous, have still paid off for Hertz. The rental car company’s stock spiked following the disclosure, according to Bloomberg, rising at its highest rate since July 2015.
The road ahead
Seeing rental car-companies entering the self-driving car scene bolsters one of the most obvious trends in the space: the automakers, tech companies, and the other assorted players won’t make it to the finish line if they try to develop their systems alone. Partnerships and acquisitions are the key to creating the best autonomous system, with billions of dollars on the line.
Most of the deals are focused on developing the tech that will control the vehicles, but rental-car companies could have a significant role to play as driverless cars speed forward. Removing the need for a human driver doesn’t take people out of the cars of the future, and if private car ownership is phased out by fleets of self-driving vehicles in the urban spaces of the future, someone needs to keep them up and running.
Rental-car companies, with their massive fleets, extant infrastructure, and established reputations with customers are tailor-made to fill the role, possibly even more than ride-hailing companies like Lyft, which has also partnered with Waymo. Car rental is just another branch of the automotive industry on the verge of disruption by self-driving cars — so like everyone else, it’s pivoting before being left in the dust.