Enterprise Holdings, which owns Enterprise Rent-A-Car and is the largest rental car service operator in the US by revenue, signed an agreement with self-driving technology startup Voyage to manage its fleet of autonomous cars, Transport Topics reports.
As part of the partnership, which is Enterprise’s first in the self-driving mobility space, the car rental company will be responsible for all maintenance of the vehicles. The current agreement is limited to 12 autonomous cars, but the companies left the door open to expanding their collaboration in the future. Voyage plans to introduce a commercial self-driving ride-hailing service near Orlando, Florida by the end of the year, so it’s possible that Enterprise will manage that fleet.
In addition to managing third-party fleets of autonomous cars, Enterprise could eventually integrate them into its own operations. Self-driving cars represent a major threat to the rental car business, which was worth $25 billion in North America alone in 2017. Travel is one of the top reasons consumers choose to rent a car, and the drastic drop in the per-mile cost of mobility will make autonomous mobility services significantly cheaper for travelers than a car rental.
When this ultimately occurs, Enterprise could look to manage third-party fleets the way it’s doing for Voyage, or simply purchase autonomous cars to deploy itself. By taking the latter route, it could then lower its prices enough to make car rentals a reasonable option again. However, this would likely require the company to build and operate a mobile app that consumers could access its fleet through, which could be challenging.
Either strategy will require Enterprise to aggressively build out a partner network.Enterprise has no plans to build a car or develop self-driving technologies, meaning it’ll need to work with companies that are doing so — regardless of which option it chooses. In attracting partners, the company will likely benefit from its large footprint — it counts more than 7,600 locations in a whopping 85 different countries.
This would likely appeal to carmakers and tech companies if Enterprise were to deploy an autonomous car rental service, especially if a revenue-sharing agreement were part of the deal. Or, if it chooses to act as a fleet operator, it could tout its reach as making it easy for any car to be dropped at an Enterprise store for maintenance. Nevertheless, since Enterprise’s rental car competitors are also eyeing the space, it’ll need to move quickly to secure the partners it needs to succeed.
Enterprise wants in on autonomous cars