Car rental firm Avis Budget Group Inc. (NASDAQ: CAR) and ride-sharing service Lyft announced Monday morning that the two companies have signed a multiyear deal that allows Lyft drivers to reserve an Avis rental vehicle to use both as a personal vehicle and as a vehicle to provide rides to Lyft passengers.
Thousands of Avis vehicles will become available to Lyft drivers in the next few months, according to the announcement, when they will join vehicles from Hertz Global Holdings Inc. (NYSE: HTZ) and Flexdrive as suppliers for Lyft’s Express Drive program.
Lyft’s Express Drive program allows people without a car the opportunity to rent a car at a special rate at any time, including standard maintenance and insurance, and drive the car for Lyft and for personal use with no cap on miles driven.
According to Lyft’s Express Drive web page, a weekly rental costs $209 but could cost nothing “in select markets with rental rewards.” In order to get further details, a person must first apply to be a Lyft driver, and we don’t need another career, so you’re on your own from here.
Avis and Hertz need to do something to make themselves attractive again to investors. For the year to date, Avis shares are trading down nearly 20% and Hertz shares are down nearly 32%. Both companies need to do everything they can to boost revenue and if that means cut-rate rental charges, well, they’ll just deal with profitability later.
Last month Moody’s lifted Avis’s outlook from negative to positive and reaffirmed its credit rating (Baa3) partly due to the company’s “growing mobility services, including expansion of its Zipcar operations and its fleet management services with Waymo.” The deal with Lyft reflects more reinforcement of Lyft’s push.
Avis is set to report quarterly results on Tuesday. Analysts are looking for earnings per share of $0.57 and revenue of $2.35 billion. For the full year, earnings are forecast at $3.54 per share on revenue of $9.27 billion.
Hertz, which reports after markets close today, is expected to report a quarterly loss of $0.25 per share and revenue of $2.31 billion. For the full year, analysts anticipate a loss of $1.15 per share and revenue of $9.11 billion.