Car Rental Company Hertz Launching a Monthly Vehicle Subscription Service
The Hertz Corporation, one of the world's largest car rental companies and the second biggest in the U.S., is launching a new vehicle-subscription service.
The service is called "Hertz My Car" and will be initially available to drivers in Atlanta, Georgia and Austin Texas as an all-inclusive monthly subscription. The subscription service will give customer access to an entire fleet of Hertz vehicles, including sedans, SUVs and crossovers.
Hertz will offer two tiers of the program. Tier One, which costs $999 per month and includes access to full-size sedans, small SUVs and trucks.
For those drivers willing to spend a little more, Tier Two offers luxury sedans, regular SUVs and large trucks for $1,399 a month. Customers can exchange their vehicle twice a month to another make or model within the tier so they always have the vehicle that best fits their needs. For example, a customer might opt for a more roomy SUV for a weekend getaway.
The all-inclusive monthly subscription covers vehicle maintenance, roadside assistance, vehicle damage and limited liability protection. Unlike leasing a car, there is no long-term commitments and a customer can cancel at any time. However, there is a first time enrollment fee of $250.
"Hertz My Car enables customers to choose vehicles that best match their needs and offers freedom and flexibility from vehicle ownership and maintenance costs, which is especially appealing to those seeking alternatives to owning or leasing a car," said Jayesh Patel, Hertz Senior Vice President of Brand.
He added, "Atlanta and Austin are prime testing grounds with diverse and progressive communities and we look forward to combining the insights we gain there with our fleet management and service expertise to expand Hertz My Car leveraging our extensive network of more than 3,500 Hertz locations nationwide."
Personal car ownership is expected to decline, especially in cities where ride-hailing companies Uber and Lyft operate and a ride can be summoned within minutes using a smartphone app.
According to a recent survey by Cox Automotive, nearly 40% of those surveyed said that while access to transportation is necessary, owning a vehicle is not. For city dwellers, 57% said private vehicle ownership is not necessary to get from point A to point B.
Even major automakers are rolling out their own vehicle subscription plans to prepare for dwindling personal car ownership and the rise of mobility on-demand.
Last year, Swedish automaker Volvo launched its "Care by Volvo" monthly subscription service.
The subscription plan from Volvo allows drivers to pay a flat fee starting at $600 per month to drive a Volvo XC40 crossover vehicle. The subscription car service includes everything except gas. Volvo's plan also includes tire protection, 24 hour concierge service and roadside assistance for the duration of the subscription.
Although it it doesn't build cars, with its new subscription service Hertz might have found a way to turn daily car renters into long-term monthly customers and more efficiently utilize its fleet.
"We feel well positioned to lead in vehicle subscription services. We've seen growth in our longer-term rentals in recent years which we believe is one of several positive indicators the time is right for this service." said Patel.
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