Shift Technologies, an online marketplace for used cars, is partnering with rental car giant Hertz Global Holdings as the startup looks to expand its offerings beyond San Francisco and Los Angeles.
Under the partnership, Shift will feature vehicles from Hertz’s fleet inventory. The deal will give Hertz, which sells a lot of its cars at auction, access to a new retail sales channel, while Shift will benefit from the rental car company’s ready supply of lightly-used cars.
This will allow Shift to “focus just on the buyer side of the marketplace,” founder and CEO George Arison told Fortune. “The intent of the partnership is to combine Hertz’s cars with our customer experience to give customers an opportunity to buy these cars directly.”
Hertz has a history of partnering with startups. In 2015, Lyft announced a deal with the company to provide its drivers with lower daily, weekly, or monthly car rental rates. Rival ride-hailing company Uber has also teamed up with Enterprise and Hertz to provide short-term car rentals.
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Shift is already working with Hertz in Los Angeles and San Francisco.
“We think this partnership offers us an awesome, unfair advantage to expand into numerous markets quickly,” said Arison.
He would not identify which cities Shift is targeting next, but said the partnership would allow the company to expand in a broad range of markets, from bigger cities like Seattle to mid-sized and smaller cities such as Tucson, Ariz., Columbus, Ohio, and Kansas City.
A number of startups have developed software platforms to make buying and selling used cars a better, more efficient experience. These startups have attracted investors, but not all have survived.
Beepi, a competitor that created a peer-to-peer digital platform for buying and selling used cars, announced earlier this month it was shutting down “non-profitable markets outside of California,” laying off 180 workers, and merging with a not-yet-launched venture called Fair. Beepi operated in Arizona, California, Florida, New York, and Washington, as well as the greater Washington D.C. area.
Beepi had competed with several other online used car startups, including Vroom, Carvana, and Shift. After Beepi’s announcement, Arison sent an email to his staff, remarking that the company’s exit presented an opportunity. Since Beepi stopped advertising in the past week, Shift’s conversions on Google ads have increased by over 25% in both San Francisco and Los Angeles, Arison said.
