Hertz links up with Uber to offer 50,000 Tesla rentals
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3 min read . Updated: 28 Oct 2021, 01:18 AM IST Deal comes days after Hertz announced significant investment in electric-vehicle rental fleet
Premium 3 min read . Updated: 28 Oct 2021, 01:18 AM IST Hertz Global Holdings Inc. said Wednesday it is linking up with Uber Technologies Inc. to make 50,000 Teslas available in Uber’s ride-sharing network by 2023, the latest in the rental-car firm’s efforts to build momentum postbankruptcy.
The deal comes days after Hertz, which collapsed into bankruptcy at the start of the Covid-19 pandemic last year, said it is making a significant investment in an EV rental fleet, including an initial order of 100,000 Teslas by the end of 2022 and new EV-charging infrastructure across the globe. The company exited Chapter 11 in June and has a planned stock listing coming later this year.
The Teslas it intends to add to the Uber network will come from the 100,000 vehicle order revealed earlier this week and future orders as the program grows.
The latest deals are part of a broader strategy by the postbankruptcy Hertz to modernize its operations and fleets, leveraging new tech to improve logistics and give customers more options, particularly on plug-in electric models, said Mark Fields, Hertz’s interim chief executive.
“One of the biggest benefits of a restructuring like ours is it gives us a fresh perspective," Mr. Fields said in an interview. “It allows us to take the approach of instead of saying ‘why?’—‘why not?’"
Mr. Fields, a veteran auto industry executive and former Ford Motor Co. CEO, was named to his latest post earlier this month.
The deal between Hertz and Tesla led to a big stock-market rally for the electric-car maker this week. Tesla’s stock, which more than doubled this past year, shot up to $1,024.86 a share Monday, pushing the company’s value north of $1 trillion for the first time.
The deal also aided Hertz’s shares, which have been traded over the counter since the company was delisted in the summer of 2020. Hertz’s shares rose roughly 10% to $27.17 Monday.
The rental-car firm plans to list its shares on the Nasdaq in the fourth quarter of this year, under its previous ticker symbol, HTZ. The listing will mark a comeback for Hertz, whose bookings collapsed as Covid-19 began to rapidly spread in the U.S. in the spring of 2020. At the time, the 103-year-old company was laden with debt after years of aggressive borrowing, leading it to file for bankruptcy in May that year.
Since then, the travel industry has rebounded and demand for rental cars has surged as more Americans hit the road, looking for an alternative to air travel. Investors have piled into Hertz, too, trading up the shares in the over-the-counter market.
Rental-car bookings have been so strong that rates have climbed, and many customers have had trouble finding vehicles.
Hertz, along with rivals Avis Budget Group and Enterprise Holdings Inc., are also trying to rebuild their vehicle fleets after cutting back in the early days of the health crisis. But a wider shortage of new cars and trucks—caused by supply-chain disruptions and car companies having to idle auto plants—has become a challenge, resulting in firms having to turn to the used-car market to restock rental lots.
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The company emerged from bankruptcy with more than $5.9 billion in new equity capital, a large portion of which was raised by new owners Knighthead Capital Management LLC and Certares Management LLC.
Hertz has been supplying vehicles to drivers at Uber and rival Lyft Inc. since 2016.
The relationship with Tesla isn’t exclusive, and Hertz eventually plans to buy electric vehicles from other companies like Ford and General Motors Co., according to Mr. Fields.
The new Hertz is looking to redefine its role in the transportation world, going beyond the traditional buyer-seller relationship between rental-car firms and car companies.
Mr. Fields said he sees opportunity in the company becoming more like a fleet-management provider, where Hertz can help businesses manage vehicle offerings to customers.
“Our approach going forward is going to be different," Mr. Fields said. “We want to be asking: ‘How can we help you achieve your objectives?’"
Hertz and Uber said Wednesday they are in a new exclusive partnership to make as many as 50,000 Teslas available by 2023 for drivers to rent when using the Uber network.
Starting Nov. 1, Uber drivers can rent Teslas from Hertz in Los Angeles, San Francisco, San Diego, and Washington, D.C., rather than use their personal vehicles, with a nationwide expansion planned in the coming weeks.
The companies said the deal offers consumers access to the Tesla Supercharger network and Uber’s EVgo discounts, as well as other financial benefits through Uber’s Green Future program.
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