Hertz Offering Special Rental Rates to Uber Drivers

Hertz Global Holdings Inc. HTZ 2.23 % is expanding a car rental program to drivers working for Uber Technologies Inc. and Lyft Inc., a move designed to bolster its presence among ride-sharing companies and leverage its network of rental lots scattered across the country.

The agreements provide set rates for drivers, who will be able to rent from specified off-airport Hertz locations that have on-site support. ENLARGE
The agreements provide set rates for drivers, who will be able to rent from specified off-airport Hertz locations that have on-site support. Photo: David Paul Morris/Bloomberg News

Under a new program disclosed on Thursday, Hertz will supply Uber drivers in Los Angeles with low, set rates when they rent from specific off-airport locations and expand to other cities over time. Drivers can use the vehicles for both business and personal driving, it said.

The effort builds on a pilot project Hertz has been testing with Lyft in Las Vegas and Denver since November 2015. Hertz also said Thursday that relationship is expanding to include Lyft drivers in Los Angeles and San Francisco.

A spokesman for Estero, Fla.-based Hertz said Lyft and Uber will set the car-rental rates, giving them the flexibility to run different promotions.

Last year, Lyft drivers in Las Vegas could access a standard sport-utility vehicle for $ 25 a day, $ 150 a week or $ 540 a month. A premium SUV rents for $ 65 a day, $ 390 a week and $ 1,400 a month. Lyft had said these rates are discounted 35% to 40% below normal.

The move is another step in Hertz Chief Executive John Tague’s turnaround strategy. Since taking the helm of the struggling rental car giant in November 2014, Mr. Tague has been working to slash internal costs while looking for new ways to boost revenue and generate buzz about the company.

Critics contend Hertz has been out of step with customer expectations when they enter the rental lots and has yet to fully engage the rise of ride-sharing which continues to chip away at the transportation industry. Competitors, including auto makers, are all racing to get into the ride-sharing game.

The Uber and Lyft deals give Hertz the ability to connect with a potential source of new customers who want to drive for Uber and Lyft but may not own a car. Hertz also has another option when it comes to handling the company’s portfolio of older vehicles. Traditionally the company attempts to sell those vehicles or filters them back through industry auctions.

In early 2015, Mr. Tague tweaked prices and raised car-rental fees by $ 5 a day and $ 20 a week. He also introduced some new brand-building gimmicks such as offering Super Bowl fans the option of renting a gold-plated Lincoln Navigator for $ 170 a day. The company also revived its “Rent-A-Racer” program and recently offered 2016 Shelby GT-Hs for rent.

For its efforts, the company narrowed its first-quarter loss to $ 51 million compared with $ 70 million for the first three months of 2015. Revenue, however, slipped 6% to $ 2.3 billion.

Write to Jeff Bennett at [email protected]

WSJ.com: US Business

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