Hertz’s deal to purchase 100,000 Tesla EVs came with an Uber surprise.
Under a partnership announced on Wednesday 27 October, Hertz will rent 50,000 Teslas to Uber drivers by 2023. The rental programme will begin Monday 1 November in Los Angeles, San Francisco, San Diego and Washington, D.C., and expand across the US in subsequent weeks, Hertz and Uber announced in a in a joint news release.
If initial efforts are successful, the programme could expand to 150,000 Teslas over the next three years.
The Hertz-Uber partnership is the largest expansion of EVs on a mobility platform in North America and one of the biggest globally, the companies said. Estero, Florida-based Hertz is a traditional rental-car company, while San Francisco, California-based Uber is a ride sharing firm that competes against conventional taxi services.
"Today's partnership with Uber is another major step forward in Hertz becoming an essential component of the modern mobility ecosystem and executing on our commitment to being an environmentally forward company," said Hertz interim CEO Mark Fields in the news release "We are creating the new Hertz and charting a dynamic, new course for the future of travel, mobility and the auto industry."
On Monday, Hertz announced that it will purchase 100,000 Teslas by 2022 and cars from Tesla. Hertz will also add EV charging infrastructure to its global operations.
"Climate change is an urgent global challenge we must all tackle together, and now is the time to drive a green recovery from the pandemic," said Uber CEO Dara Khosrowshahi.
"This combines the power of Tesla, Hertz and Uber to help accelerate the transition to zero-emissions mobility. We look forward to seeing more EVs on the road right away."
Uber drivers pay $334 per week
Uber drivers will be able to rent Teslas for $334 per week, with the cost including insurance and maintenance, per week, Uber said in a separate news release. The ride-sharing drivers will have to meet certain eligibility requirements.
Uber will also provide incentives to drivers who rent Teslas under the programme, including $1 per trip up to a maximum of 4,000 per year. The company’s driver payment levels have come under criticism in the US, Canada and Britain.
A recent New York University Stern Center for Business and Human Rights report singled out Uber while calling for fund managers to consider their investing impact on low-wage workers. The report called Uber the “most famous example” of “domestic outsourcing.”
Deal laying EV adoption ‘groundwork’
Wedbush analyst Daniel Ives said the Hertz-Uber deal “starts to lay the groundwork” for a long-awaited self-driven taxi network and “massively expands” Tesla’s total addressable overall market. Ives made the comments in a report he provided to Capital.com.
He called Hertz’s purchase of the 100,000 Teslas “a tipping point” for EV adoption and other EV bulk purchases. Tesla, General Motors and Ford stand to benefit in the near term.
Hertz and Carvana also team up
Meanwhile, in a related move, Hertz and online used-car retailer Carvana are partnering under a separate deal announced Wednesday in a news release.
Hertz will utilise Carvana’s online-transaction technology and logistics network to sell vehicles that it no longer wishes to use in its rental fleet. The rental-car industry sells millions of cars through the used-vehicle market.
"Our new partnership with Carvana will help Hertz provide a tech-enabled and scalable channel through the lifecycle of our fleet," said Fields.
"This is another step toward the new Hertz – combining our brand strength and global fleet expertise with new technology and innovations to chart a dynamic, new course for the future of travel, mobility and the auto industry."
The Hertz-Carvana deal resulted after the companies participated in a pilot project in September.
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