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Avis to Provide Rental Cars to Lyft Drivers

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【Summary】The emergence of ride-hailing services such as Uber and Lyft are expected to lead to a decline in personal car ownership, as rides can be summoned with a smartphone as needed. As more people opt for transportation on-demand, car rental company Avis is looking to put its own fleet to work—by renting vehicles to Lyft drivers that would normally be sitting idle in a parking lot.

Eric Walz    Aug 06, 2018 12:20 PM PT
Avis to Provide Rental Cars to Lyft Drivers
author: Eric Walz   

The emergence of ride-hailing services such as Uber and Lyft are expected to lead to a decline in personal car ownership, as rides can be summoned with a smartphone as needed. As more people opt for transportation on-demand, car rental company Avis is looking to put its own fleet to work—by renting vehicles that would normally be sitting idle in a parking lot to Lyft drivers to use for the ride-hailing platform.

A 2016 report by Fortune showed that cars are parked and idle around 95 percent of the time, and the true cost of ownership is money lost. By not owning a car, people save on insurance, registration, maintenance, parking, as well as the price of buying or leasing the vehicle itself.

As part of the partnership, Avis will add thousands of vehicles to Lyft's Express Drive program in North America, making it easier for people to drive for Lyft without owning a car. Lyft drivers will be able to reserve an Avis rental car right from the Lyft app. The service is rolling out in the next few months, and Avis will put some of its idle cars to work.

"With a global fleet of approximately 600,000 vehicles, we are well positioned to take advantage of the continued growth in the ride hailing space by providing on-demand access to a clean, safe and well-maintained vehicle for those who want to become ride hailing drivers," said Joe Ferraro, president of the Americas at Avis.

Lyft, the number two ride-hailing company behind Uber, has been steadily rising in value, as the company finds new ways to expand and improve its business for both riders and drivers. Lyft's valuation has grown substantially since 2016, from $5 billion to over $15 billion as it gains market share from Uber.

In 2012, Avis purchased car-sharing startup Zipcar, which offers hourly rentals. Zipcar has a program in Boston that lets Uber drivers rent cars for $12 per hour to pick up passengers.

Avis also partnered with Waymo to maintain its fleet of driverless Chrysler Pacifica minivans that will be used in a commercial ride-hailing service the Alphabet subsidiary plans to launch later this year in Arizona.

"We have been working hard on modernizing our business," Avis CEO Larry De Shon said in an interview with CNNMoney last month.

"Our partnership with Avis Budget Group allows us to provide new and existing drivers who are seeking a reliable source of income with more quality options when choosing a vehicle," said Jon McNeill, Lyft's chief operating officer, in a statement.

Avis and Lyft said thousands of vehicles will be available for the program during the next few months in several cities across North America. These vehicles are safe, and well-maintained by Avis.

The partnership is a win for both companies. The thousands of vehicles are being put to good use, instead of sitting in a parking lot or garage gathering dust, they can be monetized by both Lyft and Avis, while helping people get to where they want to go.

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