Hertz signs rental deals with Uber and Lyft

Hertz inking a deal with Uber and Lyft
Hertz inking a deal with Uber and Lyft

Hertz is hoping new agreements with ride-hailing operators Uber and Lyft will help the rental car company squeeze more money out of older cars.

It's the latest agreement the ride-hailing companies have signed with either an automaker or rental car company as Uber and Lyft look for new ways to get drivers behind the wheel, even if they don't own a vehicle.

"We consider this agreement to be largely complementary to our rental car business," said John Tague, president and CEO of Hertz Global Holdings.

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With these deals Uber and Lyft drivers will be able to rent Hertz vehicles for longer periods such as several weeks or months. The vehicles will be 2- to 3-year-old models the company has rotated out of its daily rental fleet.

In the past, Hertz would sell those vehicles, but it now believes it could make money and develop another revenue stream by renting them to Uber and Lyft drivers.

"The ride-share business is growing and we think this is one way we can be a part of that growth," Tague told CNBC.

Last year, Hertz launched a pilot program with Lyft in Las Vegas. With this new deal, the rental car company will expand that program to Denver, Los Angeles and San Francisco. Initially, the Hertz/Uber program will be available in Los Angeles. Hertz says it plans to eventually expand both programs across the country.

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These deals follow similar long-term rental agreements Uber signed with Enterprise Rent-A-Car and the Express Drive program launched by Lyft and General Motors. Earlier this year, GM took an ownership stake in Lyft, while Toyota invested in Uber.

Ride-hailing operators are increasingly working closely with automakers and rental car companies as they look for new ways to expand their pool of drivers.

SherpaShare, which provides an app and online support to help ride-hailing drivers track their business, estimates there are 500,000 people in the U.S. who provide rides on a regular basis.

Ryder Pearce, co-founder of SherpaShare, believes the majority of Uber and Lyft drivers own their cars. As a result, he says it's hard to pinpoint exactly how many people without a car may want to rent a vehicle to work for a ride-hailing company.

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