Hertz bets on a driverless future
Hertz has plans for a driverless future, and they don’t involve building its own autonomous vehicles. Instead, the rental giant wants to manage robotaxi fleets, starting with an operation led by Uber, leaving the development of hardware and software to others.
Few companies in the US have as much experience managing vehicle fleets as Hertz. And it clearly believes robotaxi services are an attractive avenue for future growth, even if such services remain quite limited for now.
Read also: Uber and Lucid join forces to create thousands of robotaxis
Hertz’s key move was the creation of a new division, Oro Mobility. It will specialize in managing and servicing large fleets of autonomous vehicles. Initially, Oro will support Uber’s robotaxi program using Lucid vehicles equipped with advanced autonomous driving technology from Nuro.
What will Hertz do?
Oro will handle charging, maintenance, repair, cleaning, and depot staffing for the Uber service. Initially, the service will launch in the San Francisco area and expand to other markets next year.
This is not the first time Hertz has invested in what it considers a promising field. But last time it ended in failure. Just a few months after emerging from bankruptcy in June 2021, the company’s management announced the purchase of over 100,000 electric vehicles from Tesla and other brands.
Hertz acquired about 30,000 electric vehicles, mostly Teslas, before realizing it was not the wisest decision. High repair costs and a drop in residual value forced the company to get rid of these cars during 2023–2024, leading to billions of dollars in losses.
In addition to helping manage Uber’s autonomous service, Oro Mobility already operates its own vehicles with its own drivers in Los Angeles and San Francisco via the Uber platform. This spring, drivers in Northern New Jersey will join them.
Focusing on what the company does best — fleet management — seems like a much safer bet than the total EV adventure of five years ago. If robotaxi services fail to meet Uber’s expectations, it will be Uber, not Hertz, that bears the losses.
This cautious approach allows Hertz to take advantage of the growing autonomous transportation market without bearing all the risks associated with technology development. The partnership with Uber and Lucid gives the company access to cutting-edge developments, and its vast experience in fleet management becomes a critical asset. If driverless taxis truly become a mass phenomenon, Hertz will be in an ideal position to service these fleets nationwide, while avoiding the costly mistakes of the past.