TLDR
- Hertz (HTZ) stock rallied approximately 18% following the announcement of dual fleet agreements with Uber
- The newly established Oro Mobility, a Hertz subsidiary, will oversee charging infrastructure, vehicle maintenance, repairs, and facility operations for Uber’s autonomous Lucid fleet
- The autonomous ride-hailing service will utilize Lucid Gravity SUVs equipped with Nuro’s autonomous driving technology, set to debut in San Francisco Bay Area before 2027
- Both companies plan to evaluate expansion possibilities throughout 2027
- This agreement expands upon the existing ride-share vehicle rental collaboration between Hertz and Uber
Shares of Hertz experienced a significant spike on Thursday after the rental car giant revealed a strategic partnership with Uber to support operational aspects of the ride-sharing company’s autonomous vehicle fleet.
Hertz shares climbed 18.4% during midday trading sessions to reach $6.63. Meanwhile, Uber shares declined 0.6% to $74.02.
Hertz Global Holdings, Inc., HTZ
The collaboration revolves around Oro Mobility, a recently established Hertz subsidiary. This new entity will manage operational responsibilities for Uber’s self-driving vehicle fleet, encompassing charging services, routine maintenance, vehicle repairs, cleaning protocols, and depot personnel management.
Uber’s robotaxi initiative employs Lucid Gravity SUVs integrated with autonomous driving systems developed by Nuro. Lucid shares also benefited from the announcement, rising approximately 5.5%.
The autonomous ride service is scheduled to commence operations in the San Francisco Bay Area prior to the conclusion of 2026. Both Hertz and Uber indicated plans to investigate expansion possibilities throughout 2027.
Hertz CEO Gil West explained that Oro was created to bridge demand with scalable fleet operations capabilities. “With this initiative, we’re expanding our expertise across various mobility applications,” West stated in the company’s announcement.
Uber COO Andrew Macdonald noted the collaboration will facilitate integrating autonomous technology into the Uber platform and accelerate the transition toward a combined network featuring both human drivers and autonomous vehicles.
Hertz’s Strategic Pivot
This marks another chapter in Hertz’s efforts to capitalize on emerging mobility trends. In 2021, the rental giant captured widespread attention by announcing a massive 100,000-vehicle electric vehicle purchase from Tesla, which temporarily propelled Tesla’s valuation beyond the $1 trillion threshold.
Hertz subsequently revealed intentions to acquire up to 175,000 electric vehicles from General Motors and an additional 65,000 from Polestar. However, none of these ambitious procurement plans reached full completion.
By the beginning of 2024, Hertz began liquidating its electric vehicle inventory at a financial loss. Unexpectedly high maintenance expenses, many linked to Uber drivers utilizing the vehicles, combined with Tesla’s substantial price reductions, forced the company to abandon its EV strategy.
Oro Mobility signals a strategic shift. Instead of purchasing and leasing electric vehicles, Hertz is repositioning itself as a specialized operations and fleet management service provider, aligning more closely with its traditional business strengths.
Market Competition Already Established
Hertz faces established competition in this emerging sector. Competitor Avis currently provides fleet management services for Waymo, the autonomous vehicle division of Alphabet.
As numerous robotaxi operators seek to outsource logistical operations, opportunities are expanding for third-party service providers like Oro.
Uber maintains partnerships with dozens of autonomous vehicle developers worldwide. The company has committed to ordering a minimum of 35,000 robotaxi-ready vehicles from Lucid Motors. This includes an initial order for 10,000 Gravity SUVs, with an additional 25,000 vehicles based on Lucid’s forthcoming mid-size platform already confirmed.
Uber currently owns more than 11% of Lucid Motors following strategic investments accompanying these vehicle procurement agreements.
Prior to Thursday’s announcement, Hertz had already gained 22% in April and showed a 9% year-to-date increase.
