by Mia Taylor
Last updated: 10:41 AM ET, Tue August 15, 2017
It seems the technology titans behind the development of self-driving vehicles have decided to play nice with traditional car rental agencies such as Avis Budget Group and Hertz.
In a move that signals what may be the beginning of a lucrative partnership, Avis Budget Group Inc. has agreed to manage 600 self-driving Chrysler minivans for Alphabet Inc.'s Waymo autonomous technology division, The Detroit News reported.
The rental car company will provide storage and maintenance services for the Phoenix-based fleet of cars.
Yet another similar deal between Hertz Global Holdings Inc. and Apple Inc., was also recently reported by various media outlets. The terms of that deal involve Hertz leasing six Lexus sport-utility vehicles to Apple Inc., which will convert them to self-driving cars in order to test its technology.
The two deals represent positive news for a car rental industry that could very well be left in the dust by the creation and mass production of self-driving cars.
"Some people thought that they would be victims, but they're the only companies that can handle fleets on a large scale," Michael Millman, founder of Millman Research in Short Hills, New Jersey, told the Detroit News. "Autonomous cars and ride-sharing are not the end of the rental business but could end up being a benefit. It could be a source of profit for them."
The profit Millman speaks of wouldn't be a moment too soon for many of the well known rental companies. Their shares have floundered on the Stand & Poor's 500 Stock Index for the past five years, losing customers to Uber and Lyft amid declining profits. Hertz reported a $491 million loss last year, according to The Detroit News article.
[READMORE]READ MORE: Hertz Teams with Aeromexico for New Partnership[/READMORE]
Managing fleets of self-driving vehicles, however, may be the key to a brighter, more solid future for car rental companies, and for good reason. Few others are quite as adept at absorbing substantial depreciation or keeping the cars clean.
Under this newly emerging scenario, established carmakers will build the cars, and technology developed by companies such as Waymo and Apple would allow the vehicles to be self-driving.
Then, car rental agencies will handle the task Silicon Valley has no interest in: managing the fleets.
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