Self-driving cars may need rental car companies to go mainstream

The news that Waymo is partnering with rental car behemoth Avis to manage its autonomous fleet might be surprising. Why would a tech company that’s rewriting our transportation future pick such a seemingly throwback partner? But thanks to their vast client list, purchasing power, and infrastructure, rental car agencies are uniquely positioned to deliver the autonomous revolution to everyday Americans.

Waymo’s only launched its public self-driving pilot in Phoenix for now, but with more cities on the way, it’s time for the team to think bigger. Last month, Waymo announced a partnership with Lyft, which seemed like a natural fit for Waymo to find riders for its services in any city it expands to. Now, the Alphabet division that spun off from Google is putting the other pieces of the puzzle together to build the ultimate AV empire.

Rental companies are already seeing big changes to their industry thanks to ride-hailing and carsharing—why use the old-fashioned pay-per-day rent-a-car model when you can summon or borrow a car only when you need it? Autonomy will only make those changes more dramatic. In the last few years, Hertz 24/7 and Enterprise CarShare have offered more flexible rental services, competing directly with carsharing upstarts like GM’s Maven.

Zipcar

This is one of the reasons that Avis bought Zipcar in 2013, something that makes the Avis deal even more lucrative to Waymo. Zipcar’s one million tech-savvy members are already experimenting with different models of car ownership, making them prime early adopters for whatever type of mobility service that Waymo will provide. This was specifically cited by the head of Waymo’s self-driving unit, John Krafcik, as a clear benefit for the partnership.

Now combine Zipcar’s users with Avis’s more traditional customer base, and you’ve pretty much got every potential car-operating demographic covered. As The Verge mentions, “It’s not hard to imagine Waymo using an on-demand app like Zipcar to serve up access to its self-driving minivans, or making them available to rent at an Avis counter at the airport.”

And about those Avis counters. As Tess Townsend notes at Recode, Avis has 11,000 locations worldwide, which gives Waymo a geographically diverse place to store and maintain vehicles. At all of those locations, Avis already has a highly efficient system in place to handle vehicle cleaning and simple tune-ups, with the goal of getting the cars back on the road as soon as possible. For an autonomous vehicle fleet, where cars will drive an estimated six times more miles per year than a privately owned car, not having to build those maintenance facilities from scratch will be key.

But that’s not all that rental car companies can provide to an autonomous partner. Many rental car companies also manage fleets for businesses, acting like long-term leasing agencies for industries that require a lot of vehicles for their employees. A firm like Avis has the power to get entire corporations to switch over to a fleet of shared autonomous vehicles at once (and greatly reduce their transportation costs).

John Krafcik

Rental agencies can also exert huge market influence through their vehicle purchases, meaning there’s a big opportunity to combat climate change. Enterprise’s CarShare, for example, includes a wide variety of hybrids and EVs as part of a sustainability agenda to introduce customers to more fuel-efficient vehicles. The 600 Chrysler Pacifica minivans that Waymo’s rolling out in Phoenix are hybrids, but Waymo’s new partnership with Honda will reportedly be working to place self-driving tech onboard the automaker’s brand-new electric vehicle models.

Imagine going to visit a new city, for example, and needing a car. You’d be confronted with the option to rent a vehicle you’d drive yourself or simply sign up to use Waymo’s autonomous service—providing rides only when you need them—when you get there. If this service became affordable enough for everyday use, more people could give up their own cars for good. This could be the path to populating our cities with shared, autonomous, zero-emission vehicles—the holy grail of more efficient, environmentally responsible transportation solutions.

Rental car companies aren’t known for their market innovation, but they’re perfectly poised to help deploy dramatic changes to the way we get around. With the right partners, each major company could be embarking upon driverless pilots that appeal to their loyal customers. Enterprise’s longtime brand promise—“We’ll pick you up”—could very well become a reality within the next ten years.