Hertz to Rent Teslas to Uber Drivers

• Hertz will offer Tesla cars to Uber drivers on a weekly basis for $334 a week, including insurance, but expects rates to drop to $299 a week in the near future.

• The rental giant has placed an order for 100,000 Tesla cars, prompting Tesla stock to surge, with the first cars due in November 2021.

• Tesla is getting ready to begin production at two new plants in Germany and Texas to keep up with demand in several key regions.

Following a record order for Tesla vehicles from the rental giant Hertz, Uber has revealed a plan with Hertz to make 50,000 Teslas available to Uber drivers. The companies have partnered on vehicle availability before, but the new plans concern a vehicle order Tesla is expected to deliver through the end of 2022, supplying the rental company with Model 3 sedans.

The first Model 3 sedans are expected to become available to renters on November 1 of this year, and that's when Uber says drivers will be able to rent Model 3s through Hertz locations in Washington, DC, San Diego, San Francisco, and Los Angeles, ahead of a wider rollout in the US in the weeks that will follow.

"Today, it goes electric: Hertz will make up to 50,000 fully electric Teslas available for drivers to rent by 2023, exclusively for drivers using the Uber network in the US. This is the largest expansion of electric vehicles (EVs) on a mobility platform in North America and one of the largest globally, marking another step towards Uber's zero-emissions goal."

The costs to Uber drivers to rent Tesla through Hertz, however, are a little sobering. Uber says it will cost its non-employee independent contractors $334 a week to rent a Model 3, but this cost is expected to later fall to $299 a week once the program picks up speed. This will include maintenance and insurance, but not charging. Early on, Hertz will open up this program to drivers with at least a 4.7-star rating, and those who've completed 150 trips so far.

That works out to $1336 for four weeks, at least before the $299 weekly pricing will kick in, which will get that down to $1196 for a period of just under a month, on paper.

It's not clear just to whom this deal will make financial sense, assuming minimizing running costs is a goal, as Uber drivers will be paying over $1300 a month for a car and insurance under this program in order to make money for themselves. Needless to say, we suspect there is a vast universe of vehicles that could be cheaper to own or lease for Uber drivers that offer lower lease or ownership costs, and some of them could be used EVs. It might certainly help if drivers will be operating close by to a Tesla Supercharger station, as juicing up a Model 3 each night at a Level 2 charger suggests some other, significant expenditures to drivers, such as having a garage or nightly access to a Level 2 EV charger to begin with.

Perhaps cognizant of the heady monthly costs, Uber could be hinting that the goals of this deal may not be entirely aimed at permitting Uber drivers to make more money using a brand-new rented EV versus another leased or owned car.

"While this partnership is a step forward to advance electrification on the Uber platform, it’s important to note that owning an electric vehicle is still too often more expensive than a traditional gas-powered vehicle," the company notes. "This is a critical challenge that we all must continue tackling together with government leaders through smart policy to bring the cost of EV ownership in line with or below gas-powered cars."

If you drive for Uber, let us know what vehicle you use and what its monthly running costs are.