Hertz is enabling its rental car customers in 250 cities and 500 airports worldwide to book professional drivers as an add-on option. The drivers are vetted and supplied by black-car service Blacklane.
At first travelers will only be able to reserve the private drivers via the “Hertz Driver Services powered by Blacklane” link on Hertz’s websites and through the company’s call centers in Belgium, Czech Republic, France, Germany, Italy, Luxembourg, Netherlands, Spain, and the United Kingdom. The chain will bring the service to other markets soon, with options to book airport transfers, one-way rides, and trips by the hour.
Car rental companies have been struggling amid competition from ride-hailing services like Uber and Lyft and car-sharing services such as Turo and BlaBlaCar. For instance, last year Hertz saw its earnings drop far more than expected, year-over-year, due to pressures attributed partly to rising competition.
Over the past year, Hertz stock shares are down about 40 percent. But analysts chalk much of that up to downward pressure on prices for used cars due to the biggest glut of vehicles in the U.S. Hertz relies on reselling its vehicles after two years of use as a way to afford a fresh inventory.
That said, competition is a factor. In response, the rental car giants have talked about partnerships as a way to differentiate in order to compete. It’s a move to go upscale rather than head-to-head with the Ubers and Lyfts of the world.
What Hertz probably hopes to get out of the Blacklane partnership is to steal back some of the high-spending executive customers who want white-glove service and get frustrated by the inconsistent quality of some of Hertz’s franchise locations.
The Hertz partnership with Blacklane may even be a prelude to an investment by the rental car company, depending on the direction new CEO Kathryn Marinello takes. In an investor call in February, Marinello said she is looking at investments in Hertz’s “fleet, service, marketing, and technology.”
The company made its first strategic investment in years one year ago when Hertz led a $50 million investment in Luxe, an on-demand parking startup based in Los Angeles.
Berlin-based company Blacklane was founded in September 2011 and has raised more than $42 million to date.
This partnership is the startup’s first deal as a professional driver company with a global rental car chain.
It has signed up with Madrid-based travel distribution company Amadeus, which distributes its offers to travel agents to offer as add-ons, and with airlines like Germany’s flag carrier Lufthansa, which offers black car services as an upsell to its direct customers.
Blacklane’s most intriguing efforts have been with online travel agencies like Expedia, which increasingly experiment with promoting the black car services as an add-on when sending confirmation notices and other communications to its customers who have reserved flights or hotels.
Expedia is even experimenting with analyzing reservations to push more personalized upsell offers. In tests, it parses booked reservations to check the distance between a traveler’s hotel and their airport and then automatically emails an offer to book a Blacklane chauffeur service at a rate and pick-up time tailored to the precise itinerary.
Blacklane’s target customer is the business traveler, especially executives who travel internationally. More than half of its repeat customers book cars in a different city from where they booked their first ride. Its pitch to travelers is offering a consistent quality of service and promises such as a limited wait.
The company has a network of “tens of thousands” of drivers globally. If, say, a passenger requests a car from Berlin’s airport, Blacklane sends a request out via its dispatching system, and drivers can choose if they want to pick up the business.