By Jack Nicas 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the US print edition of The Wall Street Journal (June 27, 2017).

Google parent Alphabet Inc. is hiring rental-car company Avis Budget Group Inc. to store and service its self-driving cars in a deal that shows Alphabet's vision for a network of driverless taxis is getting closer to reality.

Alphabet's driverless-car unit Waymo is ramping up a program it launched in April in Phoenix to eventually give hundreds of selected residents there free rides in its self-driving cars.

Under the program, Waymo needs a depot to service and dispatch its vehicles. The company said it chose Avis for its experience in quickly fixing and cleaning rental cars and for its presence across the U.S. and abroad, which can help Waymo expand its program to other cities.

Avis, which also owns the rental-car service Zipcar, said that under the multiyear agreement, it is modifying some rental-car locations to park Waymo's vehicles and service them, including oil changes, tire rotations and cleaning.

The companies didn't disclose financial terms of the deal or specify its length. The deal isn't exclusive, so Waymo can still establish partnerships with other fleet-management firms.

Avis shares rose 14% Monday, as the deal gives the company a lead on other auto companies hoping to enter the business of managing driverless-car fleets, a service that could include everything from arranging for financing and insurance to providing maintenance for fleet operators.

Shares of rental-car rival Hertz Global Holdings Inc. rose following the news of the Avis-Waymo deal, and got a boost from a report that one of its subsidiaries leased cars to Apple Inc. for autonomous-vehicle testing.

The Hertz arrangement differs from Avis's in that it is a lessor-lessee deal, with Apple leasing at least three Lexus SUVs for testing from Hertz subsidiary Donlen Corp., a fleet-management firm. Apple disclosed the leasing arrangement in April when it filed for autonomous-driving permits and registered the vehicles with the state of California. Shares of Hertz were up 13.5% in 4 p.m. New York trading.

Ford Motor Co. said last fall that it is looking to manage driverless-car fleets. Fiat Chrysler has recently suspended production of its Pacific minivans ahead of a planned recall because of technical glitches. It is unclear how that suspension will affect delivery of the additional 500 vans ordered by Waymo.

Waymo has 100 Chrysler Pacifica self-driving minivans and has ordered another 500 of the vans from Fiat Chrysler Automobiles NV, which Waymo equips with computers and sensors to make them self-driving. Waymo's cars, which also include Lexus SUVs, have driven more than 3 million miles in testing across California, Washington, Texas and Arizona.

--Christina Rogers and Tripp Mickle contributed to this article.

Write to Jack Nicas at jack.nicas@wsj.com

 

(END) Dow Jones Newswires

June 27, 2017 02:47 ET (06:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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