The next rental car you get from Hertz might be a Tesla. Hertz just purchased 100,000 electric vehicles (EVs) from Elon Musk’s firm and 50,000 of those are earmarked to be leased to Uber drivers under a separate deal with the ride-hailing firm.
Hertz also inked a deal with online car platform Carvana to sell off the rental cars it no longer wants.
News of the deal brought Tesla’s stock to more than $1,045 a share midday, a new record high just one trading day after Tesla shares broke $900. The stock closed up 12.66 percent at about $1,024 a share, CNBC reported.
Hertz, which recently emerged from bankruptcy and is now under the control of hedge fund and private-equity owners, is moving toward mobile technology and digitization.
Under the agreement, Uber drivers who previously had to provide and maintain their own EVs will be able to rent a Tesla from Hertz instead. The cars will become available for Uber drivers on Nov. 1.
“Now is the time to drive a green recovery from the pandemic,” said Dara Khosrowshahi, CEO of San Francisco-based Uber, in a joint statement with Hertz.
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“Uber’s partnership with Hertz is probably aimed at fending off disruption from a direct rollout of robo-taxis, built on a network of electric and autonomous vehicles. Renting rather than buying vehicles suggests Uber will keep operating an asset-light model. However, high variable costs could be a persistent drag on the contribution margin in the near term,” Mandeep Singh, Bloomberg Intelligence senior technology industry analyst, reported Yahoo.
Under the Uber agreement, drivers will pay a preferred weekly rate for unlimited miles in the Hertz EVs, plus recharging and incidental damage expenses. Uber is offering drivers a zero-emissions incentive of $1 a ride for using EVs and 50 cents for every rider who chooses to go green, Fortune reported.