Hertz Copies Car Sharing to Compete

Hertz Copies Car Sharing to Compete

Hertz announced today that it will soon introduce its own spin on car sharing services like Zipcar and Car2Go.

It’s called Hertz 24/7 and the system lets you skip sitting in a stuffy office while a glorified cashier tries to explain why you’ve been “upgraded” from a Hyundai Elantra to a Nissan Altima. Huzzah…

Rental conglomerate Avid Budget Group bought Zipcar for $500 million last March, which probably lead to several soiled pairs of khakis at the Hertz head office. It’s only a few months down the road and they’re (wisely) unfurling a new business model.

Just like Zipcar, there will be a collection of Hertz 24/7 vehicles popping up in a parking garage near you. Just like Zipcar, you’ll be able to browse, reserve and pay for them through a smartphone. And just like Zipcar, there will be a key fob to unlock the car and a real key tethered somewhere within.

Hardly a game changer, but it does put a small twist on the car sharing cocktail.

Cars with a big green “Z” come with limitations of sorts. Fundamentally, they’re meant to be short-term loaners for IKEA trips, but not much more. Prepaid plans offer discounts from the hourly rate, but you’re still paying for a limited time window.

For example, the most generous bulk price costs $250 and offers 33 hours of driving per month. For someone in a traffic-heavy city with a big family, that could boil down to a weekly Costco trip and running the kids to soccer practice.

This is where Hertz 24/7 might be able to swoop in and steal some business. The new service includes hourly, daily and monthly rental programs. There are already 35,000 vehicles included in the program spread across 1,800 locations. Hertz says that number will expand to over 2,000 locations by the end of the year and that there will be 500,000 vehicles in service globally by 2016.

That’s quite a fleet, but does it really compete with Zipcars’ no-hassle user experience? In some ways yes and others no. According to the Hertz retail site, gas and insurance are both included. It’s also very expensive.

Zipcars cost anywhere from around $8 per hour to more than double that, but an hour in a Toyota Corolla will cost you $16.56. Given that, it’s hard to imagine car sharing services tailored to inner-city tightwads losing business when Hertz 24/7 amounts to little more than a grocery store’s self checkout.