Hertz's next act: From rental cars to robotaxi depots

Hertz, one of America's best-known car rental companies, is trying to position itself as the backbone of the robotaxi business.

Why it matters: As robotaxis scale, fleet operators — companies that can efficiently own, charge, clean and maintain self-driving vehicles — could become the industry's kingmakers.

Catch up quick: Hertz recently created a new business unit, Oro Mobility, to manage and service a range of fleets including ride-sharing and autonomous vehicles.

• Its first big AV deal is to manage Uber's planned Lucid-Nuro robotaxi fleet launching later this year in San Francisco, with additional markets to follow.
• Hertz, which has long rented cars to ride-share drivers, is also deploying 1,000 of its own employees to drive Hertz cars for Uber.

The big picture: It's all part of a strategy shift led by new CEO Gil West, who is pairing a back-to-basics turnaround of the car rental business with a long-term bet that Hertz's fleet-management expertise can power the next generation of mobility services.

• "We're not a tech company, nor should we be, but we've got 100 years of experience owning and managing large fleets," West tells Axios.

State of play: Hertz is still trying to rebound from a disastrous bet on electric vehicles made just months after it emerged from bankruptcy in 2021.

• The EV blunder cost Hertz close to $2 billion after poor customer experiences, surging repair costs and plunging resale values forced a massive sell-off of 30,000 EVs, most of them Teslas.
• Yet the painful chapter also helped prepare Hertz for its next challenge — charging and maintaining electric robotaxis for AV partners.

Hertz's advantage is that it already owns much of the physical infrastructure robotaxi operators need.

• It has more than 11,000 locations — including at 2,900 airports — in 160 countries, and already has 2,700 EV chargers installed.
• Its rental fleet of more than half a million cars is worth over $12 billion.
• "It would take somebody decades and billions of dollars to replicate what we have," West said.

The intrigue: West, who previously was chief operating officer at General Motors' Cruise robotaxi unit, acknowledges that managing a fleet of robotaxis is different from running a rental car business.

• Having Hertz employees drive for Uber is an important stepping stone for developing the playbook, he said.
• The program lets Hertz refine every aspect of fleet operations — dispatching, telematics, safety monitoring, cleaning cycles and charging schedules — before replacing drivers with software.
• "We are really honing the muscle tone for autonomous ... it's an easy natural transition to go from this human-driven fleet to autonomous."

Yes, but: Hertz certainly isn't alone in recognizing the potential growth opportunity in robotaxi operations.

• Lyft's Flexdrive fleet management unit is building an 80,000-square-foot Waymo hub in Nashville, while Avis Budget Group runs Waymo's Dallas depot.
• Other key players include Avomo, which runs Waymo operations in Austin, Atlanta and Madrid, and Nigerian fintech Moove, which runs Phoenix and Miami for Waymo.

The bottom line: The robotaxi revolution's next layer isn't about technology; it's about scaling operations.