Latest News by Industry
• Hertz will provide half of its newly ordered Tesla EVs exclusively to Uber drivers for rent
• The ambition to provide 150,000 Tesla cars to Uber means Hertz may strike another deal with Tesla to buy more vehicles
Rental car company Hertz Global Holdings Inc said it could expand plans to supply Tesla Inc cars to ride-hailing service provider Uber Technologies Inc to 150,000.
On Wednesday, Hertz partnered with Uber to provide an initial fleet of 50,000 Tesla Model 3.
“Hertz will kick off the program by providing up to 50,000 vehicles by 2023 exclusively to Uber drivers. If successful, the program could expand to 150,000 Teslas during the next three years,” Hertz said in a press release.
EV partnership
Under the partnership, Hertz said Uber drivers can rent a Tesla through Hertz from November 1 in Los Angeles, San Francisco, San Diego, and Washington DC.
Both the companies are planning a nationwide expansion plan for the program later this year.
Uber and Hertz have partnered since 2016 to provide drivers with vehicle rental options, and for the EV rental, the ride-hailing service provider said drivers with at least a 4.7-star rating and at least 150 completed trips can rent EVs from Hertz.
For Uber drivers, Tesla rentals will start at $334 a week, including insurance and maintenance, and would drop to $299 per week or lower as the program expands in the coming year.
The deal represents Uber’s most significant step in expanding the use of EVs on its platform, which vowed to operate only EVs in the U.S., Canada, and Europe by 2030 and worldwide by 2040.
Hertz’s turnaround
The partnership deal followed Hertz’s announcement of buying 100,000 Tesla vehicles by the end of 2022, earlier this week, which will comprise more than 20% of its global car rental fleet.
Hertz, which has emerged out of bankruptcy barely four months ago in June, has around half-million cars and trucks worldwide.
The company filed for bankruptcy protection during the height of the pandemic due to low demand for travel and rental vehicles.
The deals suggest Hertz’s new owners, Knighthead Capital Management and Certares Management, who bailed the company out from bankruptcy, are planning to shake the industry up.
Positioning for future
The initial offering of 50,000 Tesla EVs to Uber means Hertz will reserve half of its newly ordered Model 3s will be reserved exclusively as a rental option for Uber drivers.
Moreover, if Hertz plans to provide 150,000 Tesla vehicles to Uber, which is three times more than the current offering, Hertz may strike another deal with Tesla to buy more cars.
However, the car rental company said, “These ambitions could be affected by factors outside of its control, such as semiconductor chip shortages or other constraints.”
Hertz, on a separate announcement on Wednesday, said it partnered with online used-car dealer Carvana Co to sell its used rental fleet vehicles directly to consumers through Carvana’s sales channels and would reduce its reliance on mass auctions to offload used cars.
Picture Credit: Hertz