Avis-Budget Group (NYSE: CAR) and Alphabet (NASDAQ: GOOG) are planning to test a ride-hailing service using self-driving Chrysler Pacifica minivans in Phoenix.
Avis has inked a deal to service a fleet of self-driving vans owned and operated by Alphabet’s (NASDAQ: GOOGL) Waymo self-driving car unicorn, Bloomberg Technology reported. Bloomberg did say whether Avis’s Zipcar short-term car rental subsidiary would be part of the deal.
The deal is potentially a big one because Waymo plans to deploy up to 600 self-driving Pacificas in Phoenix. A big winner here is Fiat Chrysler Automobiles (NYSE: FCAU) which will supply the vans and undoubtedly get a boost for its stock.
No You won’t be Able to Hail a Self-Driving Chrysler in Phoenix
No you will not be able to pick up your phone and call for a self-driving Chrysler in Phoenix yet. Instead Waymo and Avis will be looking for volunteers to test the service.
Bloomberg did not say when the service which will be available but a story indicates that testing will begin later this year. No announcement about how or when people can sign up to be guinea pigs for Waymo’s latest self-driving car experiment will begin.
The company formerly known as Google also discussed self-driving vehicle deals with Honda Motor Company (NYSE: HMC) and Uber’s archrival Lyft as well. Lyft is partially owned by Chrysler’s biggest U.S. competitor General Motors (NYSE: GMC).
Why Avis Needs Waymo’s Help
It is easy to see why Avis Budget is so interested in joining up with Waymo. Its’ income has been falling for some time; Avis reported a net income of $107 million on March 31, 2017, down from $271 million a year earlier. Avis and its archrival Hertz Global (NYSE: HTZ) need to develop new sources of revenue to replace business lost to ridesharing outfits like Uber and Lyft.
Avis’s share price increased by $28.86 on June 26, 2017, the day Bloomberg reported the Waymo deal. Avis shares were trading at $24.24 on June 23 and $28.86 on the morning of the Monday June 26, 2017. Fiat Chrysler shares were up slightly from $10.44 on June 23 to $10.88 on Monday.