When Uber started letting you order food and eat it at the restaurant it seemed like something out of The Onion. But they saw themselves as a platform for food, and an opportunity (they thought) to monetize eyeballs.
Now they’re introducing a new service that should make Uber’s drivers furious: they’re promoting the opportunity to rent cars from car rental agencies on their platform as an alternative to requesting an on-demand ride. They will soon even start delivering rental cars, too.
This new Uber Rent feature launched nationally on Wednesday. Next month the D.C. market will see “a valet service to drive them to customers.”
Lyft already partners with Sixt to offer in-app rentals in over a dozen markets. Uber partners with Avis and Hertz, who will set the price for rentals (something drivers in most markets cannot do), with Uber taking a commission.
Uber thinks it can offer a better booking experience, and is currently offering a 10% rebate in the form of Uber credits (Uber cash) on bookings. Whether that rebate is attractive or not depends on how competitive in-app pricing is, including in comparison to thoughtfully shopping discounts such as with Autoslash.
What really is potentially value add is rental car delivery, which is expected to roll out nationwide by the end of the year, priced “similar to the cost of an on-demand ride.”
Rental deliveries can be contactless given social distancing concerns. Uber said it will develop authentication methods like using a PIN code to make sure only the customer can access their vehicle. (DC, where Uber will launch Uber Valet, has seen an increase in auto thefts this year.)
Valet drivers will be drawn from anyone on Uber’s platform who is over 25, opted into its “Work Hub” program, and joined the Avis Preferred membership program. Tips can be left for Valet drivers.
This is a new distribution platform for rental companies, in addition to their own websites and online travel booking sites like Expedia. However driving more demand for rental cars presents a challenge because in many markets the binding constraint is supply of vehicles – with companies having sold off portions of their fleets during the pandemic, and high prices to acquire more.