On Monday, shares of Avis Budget Group Inc. (NASDAQ: CAR) soared more than 18% (as high as $29.32) after the company unveiled plans to collaborate with Alphabet Inc. (NASDAQ: GOOGL) on self-driving automobiles.
Waymo, Alphabet’s self-driving automobile company, will depend on the car rental service to store and maintain self-driving Chrysler vans. According to CNBC, the agreement will allow Waymo to use Avis locations for parking, cleaning and maintenance for the 600 deployed.
Since Alphabet has been a major supporter and investor for the unproven technology, this is a huge victory for Avis which have been struggling with declining sales earlier this year. Avis CEO, Larry De Shon, stated “It’s coming our way, so it’s important for us to get involved now. This just demonstrates that we can extend our business into fleet-management-as-a-service.”
Real work pilot programs have recently been deployed after years of testing. The self-driving vehicles will operate in Pheonix, Arizona and offer free rides in the Chrysler Pacifica Plug-In Hybrid minivans. Although automated vehicles will cut costs of operating, the Google owned company believes that these vehicles will have more “wear and tear” and six times more miles annually compared to traditional cars.
This partnership will ultimately expedite Alphabet’s projects that will commercialize its self-driving car technology. John Krafcik, CEO of Waymo, commented “With members of the public using our growing fleet of self-driving cars, our vehicles need standard maintenance and cleaning so they’re ready for our riders at any time of day or night. Avis Budget Group is an ideal partner to provide fleet spport and maintenance. With thousands of locations around the world, Avis Budget Group can help us bring our technology to more people, in more places.”
Even with these recent events, Waymo must pass various technical and regulatory tests in order to deploy these self-driving cars to the public.