Car rental and car-sharing companies are trying to stay competitive in a crowded market where Uber is increasingly the choice of many consumers, with its new, much more lucrative “getaround” service.
The company has been expanding its fleet of cars and offering the service in select cities and regions, including the United States.
But with the rollout of its Getaround service, which charges a $50 monthly fee for a two-hour period, the company is in a much better position than it was a year ago to compete in the market, said Michael Luskin, chief executive officer of Car Rental.
The new Getaround is the only option available for customers who don’t live in a rental property, which is now the case with most of the larger car rental companies.
Uber’s drivers are not covered under its company-wide health insurance, which means they can be laid off if they work for Uber or its competitors.
“The company can take some of the pressure off,” Mr. Luskins said.
He said the Getaround option allows for a larger pool of drivers and more customers to use it.
But for some of its competitors, like Hertz, who already have a Getaround fleet of more than 1,000 cars, that’s not enough to get the service off the ground.
“We’re a bit disappointed with the pricing we’re paying for Getaround and we’re hoping we can get a better deal elsewhere,” Hertz spokesman Mark Cairns said.
Getaround has been rolling out its Get around service in Toronto, Vancouver, Montreal and other cities in Canada, but it has not rolled out in the United Kingdom yet.
The Getaround plan is also cheaper than Uber’s own Getaround Car rental, which includes a one-way trip to the rental property.
The cost for Get around Car rental is $90 a day, which gives riders access to the Get around car for two hours per day.
For Uber, Getaround’s Getaround car service costs $150 a day.
“There’s a lot of different ways to get around in Canada,” Mr Lusken said.
“Forget about the cost, we’re going to get a deal with our customers.”
While the Get round has not yet rolled out globally, the cost for the Get Around service has dropped to $70 a day in New York City.
The service is still available in other cities, including Los Angeles, San Francisco and Chicago, where drivers are covered by health insurance.
Mr. Cairn said that in the U.K., Uber has a 30-per-cent cut of any fees it collects from Getaround drivers.
“This is about more than just being able to provide affordable car rental to our customers,” he said.
Uber has also added Get around to its mobile app, which lets customers use the service to book a car to drive them to a destination.
The app also lets them book a taxi, or pay a surcharge to have a driver take them home.
“It’s like getting a hotel room,” Mr Cairs said.
The average price for Get round cars has dropped from $250 a day to $150, said Car Raccoon CEO Mike Luskens.
“Now it’s really affordable,” he added.
Car Racoons car rental business is growing at a healthy clip, with new orders in the hundreds of thousands.
The number of car rental vehicles in the country jumped by 10 per cent last year to more than 7,000.
The market is expected to reach 8,000 vehicles by 2021.
With files from The Canadian Press.