Lyft Adds Rental-Car, Fuel Perks in Driver Battle With Uber

Ted S. Warren/Associated Press

The race to sign up drivers to Uber Technologies Inc. and Lyft Inc. now extends to people who don’t even own cars.

Lyft is renting sports-utilities vehicles from Hertz Global Holdings Inc. to drivers on its service at discounted rates, the ride-hailing company said Thursday at its San Francisco headquarters. SUVs are currently available for daily, weekly and monthly rentals in Las Vegas; the company has not yet announced plans for wider availability of the program.

Car rentals may be a creative way to expand the ranks of Lyft drivers as the company races to catch up with Uber in dozens of U.S. markets. Lyft said there are more than 60 million Americans over the age of 25 who don’t own a car, and is betting that a portion of them would want to make extra cash driving a rental car.

Even at discounted rates, drivers the program would have to drive a significant amount of time before they pay off the rental fees. Hertz will rent Lyft drivers a standard SUV for $25 a day, $150 a week or $540 a month. A premium SUV rents for $65 a day, $390 a week and $1,400 a month. Lyft said these rates are discounted 35% to 40% below normal.

The announcement comes a few months after Uber introduced its own pilot-rental program. Since July, the ride-hailing leader has worked with Flexdrive, a unit of Cox Automotive, to offer weekly rentals in Atlanta, Dallas and Nashville. Uber has also worked with automakers to offer drivers discounts on new-car purchases and leasing.

At its event Thursday, Lyft also said it is partnering with Shell to offer drivers discounted rates on gas, and it unveiled a new tool to let drivers withdraw their earnings from a mobile app straight to their bank account.

Uber and Lyft still face lawsuits seeking to establish that drivers are treated more like employees than independent contractors. A fleet of drivers who don’t own their own cars could raise new questions about how they should be classified.