Waymo signs deal with car rental firm Avis for driver-less fleet management

Waymo, the self-driving car unit of Google's Alphabet Inc, said yesterday that it had signed a multi-year agreement with Avis Budget Group Inc for the car rental firm to manage its growing fleet of autonomous vehicles, which led to a surge in Avis Budget's stock.

Investors pushed Avis shares up by as much as 21 per cent yesterday, which came as the biggest intra-day percentage gain for the stock in over five years. The shares closed at $27.67, up about 14 per cent.

Shares of traditional rental car companies such as Avis and Hertz Global Holdings Inc had taken a beating with more travellers using ride services such as Lyft and Uber.

According to commentators, the Waymo-Avis deal pointed to a potential future for rental car companies as managers for fleets of shared and autonomous vehicles that required their services changing tires, cleaning interiors, and securing vehicles when they were not in operation.

Also yesterday, General Motors' chief financial officer Chuck Stevens told analysts during a conference call that the automaker had "done a lot of thinking" about how to manage its growing fleet of self-driving vehicles.

The rental car firm will service and store Waymo's Chrysler Pacifica minivans in Phoenix, Alphabet was testing a ride-hailing service with volunteer members of the public. The vehicles would be owned by Waymo which will pay Avis for its service, an arrangement that was set for many years but was not exclusive.

Waymo will get a potential asset that rivals like the major automakers and Uber Technologies Inc already had - a huge network of traditional cars and customers that could be transformed into an autonomous transport service over time. Avis is the owner of Zipcar, the on-demand rental service with over one million members, largely in urban centres.

The new deal was limited to Waymo's vehicles in Phoenix, where it started its first pilot service in April following a decade of research.