Waymo Hiring Avis To Maintain Self-Driving Chrysler Pacificas In Phoenix

Self-driving car service Waymo will be outsourcing management of its Phoenix, Ariz. fleet to Avis.

Waymo, a unit of Alphabet, the parent also of Google, will delegate the servicing and storing of its 600 Chrysler Pacifica PHEV minivans to Avis, while Waymo retains their ownership.

The agreement with Avis Budget Group Inc., one of the world’s largest car rental companies, is for now only in Phoenix, but could broaden. The relationship is contracted for several years, but won’t be exclusive. Both companies said the Phoenix service arrangement will begin later this year.

Waymo moved much of its self-driving vehicle testing over to Phoenix in April, nearly a decade since Google started the research. The company will have to clear several technical and regulatory hurdles before the technology it becomes commonplace across the country.

The self-driving car business is keeping the doors open on strategic alliances. Company executives have been in talks with Honda and ride-hailing firm Lyft on partnerships.

In related news, on late Monday, Automotive News and Bloomberg reported that Apple Inc. is leasing a few cars to test as autonomous vehicles from Hertz Global Holdings Inc. Apple is leasing three Lexus RX 450h hybrid crossovers through Hertz’s Donlen fleet-management subsidiary for automated vehicle testing, according to documents filed with the California Department of Motor Vehicles.

Avis and Hertz have in recent years been looking for other markets to service as the global car rental industry becomes dominated by a small number of companies and price competition, cutting into revenue and profits. Avis Budget Group saw its first quarter revenue fall 2.2 percent to $1.84 billion.

In January 2013, the car rental company acquired carsharing market leader Zipcar for about $500 million. Zipcar has over one-million members using its services, mostly in large metro areas.

Car rental giants like Avis and Hertz are anxiously waiting to see how autonomous vehicles could further cut into their business. Forging alliances such as the Avis-Waymo deal could provide future business that could otherwise evaporate.

“It’s coming our way. So it’s important for us to get involved now,” Avis Chief Executive Officer Larry De Shon said about autonomous driving. “This just demonstrates that we can extend our business into fleet-management-as-a-service.”

The Avis chief said his company will be retrofitting some of its facilities in Phoenix to service Waymo minivans. Avis can provide routine maintenance and repair but won’t be able to handle autonomous hardware like Lidar sensors.

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Waymo is also exploring potential markets to enter and services that could be profitable.

Waymo’s CEO, John Krafcik, said that its fleet will be going about six-times more mile per year than average vehicles out on roads. They’ll need more maintenance and care.

Krafcik said Waymo is exploring several business models, including ride-hailing, logistics, and personal car sales. The Avis agreement could support all of the new commercial sectors that Waymo may enter.

The Alphabet company is carefully watching what ride-hailing firms like Uber and Lyft will be doing in self-driving cars. Competition will also be coming from automakers and major auto suppliers. The Avis partnership is coming at a good time.

“Partnerships can come together very, very quickly when both parties have something to gain,” Krafcik said.

Bloomberg

 


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