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Avis Shares Jump on Alphabet Self-Driving Car Partnership

June 26, 2017, 4:38 PM UTC

Waymo, the self-driving car unit of Google-owner Alphabet, has reached an agreement with Avis Budget Group under which the rental car company will manage Waymo’s fleet of autonomous vehicles.

Avis will provide storage and maintenance services for the Waymo fleet of self-driving vehicles in Phoenix, the companies said when they announced the partnership on Monday. In April, Waymo kicked off its early rider program in Phoenix by inviting local applicants to trial test its self-driving Fiat Chrysler Pacifica Hybrid minivans. Bloomberg, which first reported on the Alphabet-Avis partnership on Monday morning, noted that the multi-year deal calls for Waymo to own the vehicles while paying Avis an undisclosed amount for its services.

The news sent Avis shares soaring by nearly 11% during afternoon trading. Even Avis rival Hertz saw its own shares jump more than 7%, which could be a sign that the market is anticipating additional partnerships between rental car firms and tech companies working on autonomous driving technology. Meanwhile, shares of Tesla—which is developing its own self-driving vehicle tech—dipped slightly on Monday.

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Waymo’s race to put self-driving cars on the road puts Alphabet at odds with Silicon Valley rivals like Tesla and Uber Technologies, as well as traditional auto industry giants General Motors and Ford. (Waymo has even battled with Uber in court as part of a federal case involving trade secrets and self-driving technology.) Meanwhile, the deal with Avis also comes one month after Waymo signed an agreement with Uber ride-sharing rival Lyft to collaborate on the development of autonomous vehicle technology.

Much like the agreement with Lyft, Bloomberg notes that Waymo’s deal with Avis gives the Alphabet subsidiary access to a network of vehicles and customers that could eventually play a role in helping Waymo launch a broader transportation service using self-driving vehicles.