Hertz Enters the Increasingly Crowded Vehicle Subscription Market

With autonomous driving, car-sharing and vehicle subscriptions, the automotive headline of the year might be something like, “Alternatives to Vehicle Ownership.” Younger Americans, cash-strapped, environmentally aware and civic-minded, are looking for ways to reduce their use of vehicles, which is why they’ve embraced services like Uber and Lyft and Zipcar. Wealthier Americans, meanwhile, are looking for more flexibility in their driving experience. Enter vehicle subscriptions.

Several automakers have entered the nascent vehicle subscription market with varying degrees of success. Cadillac introduced its Book by Cadillac program in late 2017 only to suspend the program a year later. It’s believed that the program’s high price tiers weren’t doing it any favors. Volvo’s more realistically priced Care program begins at $600 and has (unsurprisingly) seen the most success of all subscription programs.

But OEMs aren’t the only ones interested in planting a footprint in the subscription market. Increasingly, car rental companies are testing the waters. Rental company Hertz recently announced the launch of its My Car subscription service, which will provide customers access to select sedans, crossovers, SUVs and trucks for a monthly fee. The program will have two tiers, the first costing $999 and the second priced at $1,399 per month, depending on the vehicles. The first tier will allow subscribers pick from full-size sedans, small SUVs, and trucks. The $1,399 tier will allow access to luxury sedans, regular-sized SUVs and large trucks. Program members can change vehicles up to twice a month, and the fees cover insurance and maintenance fees.

Hertz says it will begin a pilot of the My Car subscription service in Atlanta and Austin. The cities were chosen because they have a diverse and progressive populace who might be more open to alternatives to car ownership, according to the company.

“We feel well positioned to lead in vehicle subscription services,” said Jayesh Patel, Hertz Senior Vice President of Brand. “We’ve seen growth in our longer-term rentals in recent years which we believe is one of several positive indicators the time is right for this service. We also have a strong and consistent focus on enhancing our customers’ experience including recent innovations such as our redesigned mobile app and Hertz Fast Lane powered by CLEAR that gets customers on the road faster than before.”

Hertz is not the first car rental company to test the waters with a subscription program. In April, Enterprise announced its Subscribe with Enterprise program. Customers that participate will pay a monthly fee to choose from six different vehicle classes — full-size and premium sedans, small and mid-sized SUVs, and small and medium-sized trucks — representing more than 20 makes and models. The $1,499 a month price tag will allow users to change cars up to four times per month.