Uber and Enterprise To Rent Cars to Drivers
So, here is an interesting idea. Uber needs drivers to drive around the customers who book a ride on the Uber app. Traditionally, that means having your own car, and not just any car. The car has to meet Uber’s standards. While these standards have been loosened recently, they do still require a relatively newer car in nice condition.
However, Uber apparently can’t get enough drivers who meet that standard. Or, more accurately, it can’t get enough drivers who find the rates it pays attractive enough to drive more than in the hottest spots during the highest paying times.
For example, someone could drive Friday and Saturday nights to make some extra money. However, other than that, it really is might not be worth any more time to make the lesser amounts that would be available other times. This isn’t good for Uber because having an always available reputation is necessary for its success.
To bridge this gap, the company is pairing up with Enterprise Rent-a-Car to allow Uber drivers to rent a car directly through Uber for a fixed rate. This Uber rental car pilot program is currently underway in Denver, CO. This deal benefits Enterprise, who gets to rent out more cars with the financial backstop of Uber. For Uber’s part, this offers people who would drive for the company, but don’t have a car, a way of qualifying for the service. It also ups the number of drivers who work more hours.
Statistically speaking, if you can’t afford the kind of car that would traditionally qualify for Uber, the income that Uber does provide will be more attractive, therefore making you more likely to drive more hours. Plus, the rental is weekly for over $200, so you won’t do it if you aren’t going to drive a lot.
Finally, some drivers worry about wear and tear on their own cars while driving for Uber, and whether or not they are really making as much money as they think they are when accounting for the affects on their car. By taking advantage of the rental deal, drivers can put an exact amount in as their expense for driving since all the wear and tear would occur to the rental car instead of their own.
What is missing, is the ability to rent a hybrid, or electric car. Much of the expense of driving for Uber comes from paying for gas. While, lower gas prices are certainly a benefit, the ability to rent a plug-in electric car and then drive for essentially free, would be a big selling point.
All in all, this is an interesting offer from Uber, although my back of the envelope calculations suggest that it might be a little too pricey for many drivers. That, coupled with the fact that the program requires a $500 up front deposit means it won’t be of much use to those who might benefit the most from it.
However, if there is one thing Uber is good at, it is using the data it collects to make adjustments to its product and services. So, this pilot is likely just the beginning. If it works out well for Enterprise and Uber, maybe there will be more realistic pricing available in the future.